Best Heat Pump Tariffs in 2026: How to Cut Your Heat Pump Running Costs With Time of Use Electricity

Why Your Tariff Matters as Much as Your Heat Pump

Heat pumps are typically three to four times more efficient than a gas boiler, but electricity costs roughly four times as much per kilowatt hour as gas. That gap is what makes tariff choice the most powerful lever on your running costs.

The Ofgem April to June 2026 price cap puts standard variable electricity at 24.7p per kWh and gas at 5.7p per kWh, with electricity standing charges rising to 57.2p per day for direct debit customers. On a single rate tariff, a heat pump with a seasonal coefficient of performance of 3.4 produces useful heat at roughly 7.3p per kWh. That is only marginally cheaper than a modern condensing gas boiler at around 6.7p per kWh once boiler losses are factored in.

Move that same heat pump onto a dedicated time of use tariff with off peak electricity at 14.53p per kWh, and the picture changes completely. The cost of useful heat falls to roughly 4.3p per kWh, undercutting gas by around 35 per cent and beating oil and LPG by considerably more. Two homes with identical heat pumps can pay £400 or more apart each year purely because of the tariff sitting behind the meter.

How Heat Pump Tariffs Actually Work

Every heat pump specific tariff in the UK relies on the same basic mechanic. A smart meter records your electricity use in half hour intervals and the supplier applies different unit rates depending on the time of day. Cheaper windows are usually concentrated overnight, when wholesale prices fall, or during the middle of the day, when solar generation is high. By scheduling your heat pump to do most of its work during those windows, you push your average unit rate well below the standard cap.

Three requirements apply to almost every heat pump tariff on the market in May 2026.

1. A working SMETS2 smart meter that is sending half hourly data to your supplier.
2. A heat pump installed at the property. Suppliers usually verify this through your Microgeneration Certification Scheme certificate or by asking for photographs of the outdoor unit.
3. A direct debit payment method on the import account.

You also need to switch your electricity import supply to the supplier offering the tariff. Most suppliers complete the switch within five working days and then take a further two weeks or so to enrol your smart meter onto the time of use tariff before the cheaper rates begin to apply.

Cosy Octopus: The Three Rate Tariff Designed Around the British Heating Day

Cosy Octopus is the most widely recommended heat pump tariff in the UK for 2026 and the largest single fleet of heat pumps on a smart tariff. It runs on three unit rates rather than two, with eight hours of deeply discounted electricity split across three daily windows.

Between 1 April and 30 June 2026, a typical Cosy Octopus customer pays:

1. 14.53p per kWh during the eight off peak hours of 4am to 7am, 1pm to 4pm and 10pm to midnight.
2. 33.28p per kWh during the standard daytime rate, which covers most other waking hours.
3. 51.68p per kWh during the peak window of 4pm to 7pm, which lines up with the national grid evening demand peak.

The triple dip structure is deliberate. Heat pumps work best when they run little and often, so giving the home a long preheat overnight, a top up in the early afternoon and another buffer late evening keeps the property at a comfortable temperature without ever needing to draw electricity at the peak rate.

Octopus reports that a typical three bedroom home with a heat pump uses around 6,600 kWh of electricity per year. On the April 2026 price cap, that costs roughly £1,837. Shift 72 per cent of non heat pump electricity into the Cosy windows and avoid the 4pm to 7pm peak entirely, and the annual bill falls to about £1,802. That is a modest £35 saving for a passive user, but customers who actively schedule their heating and hot water around the Cosy hours typically save £200 to £400 per year compared with a standard variable cap rate.

The tariff is open to any home with a heat pump, electric boiler or electric radiator. The heat pump does not need to have been installed by Octopus.

British Gas Heat Power: 50 Per Cent Off the Standard Rate for Ten Hours a Day

British Gas Heat Power, which is sold in tandem with the Hive smart home ecosystem, takes a different approach. Rather than offering three discrete rates, it gives customers a 50 per cent discount off the standard tariff unit rate during ten daily off peak hours.

Off peak windows run from midnight to 7am and 1pm to 4pm. Outside those windows, the standard peak unit rate of 33.6p per kWh applies, putting the off peak rate at roughly 16.8p per kWh.

Heat Power is the strongest fit for households that:

1. Already use Hive smart heating controls and want a single ecosystem.
2. Are happy to switch their electricity supply to British Gas.
3. Have a heat pump that can comfortably do most of its heating overnight, when the off peak window is longest.

Eligibility requires a smart meter, a heat pump or electric heating system, and a switch to British Gas as your electricity import supplier. The switch usually takes three to five working days, with a further fortnight before Heat Power activates on the smart meter.

EDF Heat Pump Tracker: A Flat 10p Discount With No Peak Penalty

EDF takes the simplest approach of any major supplier. The Heat Pump Tracker tariff matches EDF's standard variable rate for most of the day, but applies a flat 10p per kWh discount during six off peak hours: 4am to 7am and 1pm to 4pm.

Crucially, there is no peak rate. Unlike Cosy Octopus, which charges an above cap rate from 4pm to 7pm, EDF only ever charges the standard or the discounted unit rate. That makes it a low risk choice for households that cannot easily shift demand away from the early evening.

EDF publishes a typical saving of around £164 per year compared with the single rate price cap. The discount remains 10p per kWh regardless of how the cap moves each quarter, so the proportional saving rises and falls slightly with wholesale prices.

EDF Heat Pump Tracker has no exit fees and no minimum term. Households need to show evidence of their heat pump, either by uploading the MCS certificate or sending in a photograph of the unit.

E.ON Next Pumped: The Tariff Built Around the Overnight Window

E.ON Next's heat pump tariff, branded Next Pumped, uses a three band structure with the cheapest rate concentrated overnight.

The default time bands are:

1. Super off peak from 10pm to 6am, an eight hour overnight window.
2. Off peak from 6am to 4pm and 7pm to 10pm.
3. Peak from 4pm to 7pm, the same three hour evening grid peak as Cosy Octopus.

E.ON quotes typical savings of around £218 per year compared with a 24.674p per kWh standard variable rate from 1 April 2026, although postcode and payment method will move the headline figure. Next Pumped is a strong match for homes with a large heat pump buffer cylinder or thermal store, because the eight hour super off peak window is long enough to fully recover the cylinder overnight and pre warm the property before the grid peak.

OVO Heat Pump Plus: Why It Stopped in February 2026

OVO Heat Pump Plus was once the cheapest heat pump tariff in the UK. Rather than a time of use rate, it worked as a monthly rebate that effectively reduced the cost of all heat pump electricity to 15p per kWh, regardless of when it was used.

On 1 February 2026, OVO closed Heat Pump Plus to new customers and stopped applying the rebate to existing accounts. Customers who had relied on the flat 15p rate now pay OVO's standard variable rate of around 24.5p per kWh, an effective 60 per cent increase on the heat pump portion of their bill.

OVO has indicated that a replacement product is in development, but as of May 2026 there is no fixed launch date. Households previously on Heat Pump Plus should compare Cosy Octopus, EDF Heat Pump Tracker and British Gas Heat Power as the closest equivalents and switch if the maths is in their favour.

Intelligent Octopus Flux: The Specialist Option for Solar and Battery Owners

Households with solar panels and an eligible home battery have a separate route. Intelligent Octopus Flux is a smart import and export tariff that matches the import rate to the export rate at all times and lets Octopus centrally optimise the battery.

The headline rates are 22.5p per kWh for both import and export during the day and 30p per kWh both ways during the 4pm to 7pm peak window. Octopus charges the battery from the grid or solar when wholesale prices and carbon intensity are lowest, holds 20 per cent in reserve, and discharges the remaining 80 per cent into the home or the grid at peak.

The headline tariff Octopus Flux closed to new customers in March 2026 without a direct replacement, so Intelligent Octopus Flux is now the active route for solar and battery homes. For households with both a heat pump and solar with battery, the choice is between Cosy Octopus, which favours the heating side, and Intelligent Octopus Flux, which favours the export side. A general rule is that heat pump heavy homes save more on Cosy and export heavy homes save more on Flux.

A Worked Example: Three Bed Semi With a 6 kW Air Source Heat Pump

To make the comparison concrete, take a typical three bed semi detached home in the Midlands with a 6 kW air source heat pump, a 200 litre hot water cylinder, no solar panels and an annual electricity demand of 6,600 kWh. Heating accounts for 4,500 kWh, hot water 1,200 kWh and general appliances 900 kWh.

On the April 2026 price cap at 24.7p per kWh plus 57.2p per day standing charge, the annual bill is approximately £1,837.

Modelled annual cost on each major tariff with reasonable load shifting (70 per cent of heating and hot water moved into off peak windows):

1. Cosy Octopus: £1,440 to £1,520, saving £315 to £400.
2. British Gas Heat Power: £1,470 to £1,560, saving £275 to £370.
3. E.ON Next Pumped: £1,450 to £1,540, saving £295 to £385.
4. EDF Heat Pump Tracker: £1,610 to £1,675, saving £160 to £225.
5. OVO standard variable post Heat Pump Plus: £1,830 to £1,860, broadly the same as the cap.

Cosy Octopus, British Gas and E.ON all reward households that actively shift load. EDF Heat Pump Tracker is more forgiving for households that cannot easily move demand away from the evening peak, but the headline saving is smaller as a result.

How the £7,500 Boiler Upgrade Scheme Grant Changes the Picture

The Boiler Upgrade Scheme funds a large share of the upfront cost of a new heat pump in England and Wales, which makes the running cost saving from a smart tariff the dominant factor in payback. The Boiler Upgrade Scheme (England and Wales) (Amendment) Regulations 2026 came into force on 28 April 2026, with four substantive changes.

1. The grant pays £7,500 for an air to water heat pump, £7,500 for a ground source heat pump, £5,000 for a biomass boiler and £2,500 for an air to air heat pump (new for 2026).
2. A temporary uplift to £9,000 applies for air to water installations in homes that are off the mains gas grid and currently use oil or LPG.
3. The previous requirement for a valid EPC has been removed in full, along with the rule that all outstanding insulation recommendations must be cleared first.
4. The scheme has been extended to 2030 with a 2025 to 2026 budget of £295 million.

The installer must be MCS certified, and grant applications are submitted by the installer on the homeowner's behalf. For most households, that leaves around £4,000 to £6,000 to find for an air to water heat pump installation, and the time of use tariff applied afterwards typically clears the remaining payback within seven to twelve years against gas, far faster against oil and LPG.

How the Warm Homes Plan and Local Grant Fit In

For lower income households, the Warm Homes Plan and the Warm Homes Local Grant remove most or all of the upfront cost altogether. The Warm Homes Plan is a £13.2 billion programme that aims to upgrade five million homes by 2030, with a focus on EPC D to G properties in lower income households.

The Warm Homes Local Grant provides up to £30,000 per home through local authority delivery partners, structured as roughly £15,000 for fabric improvements and a further £15,000 for low carbon heating, including air source and ground source heat pumps. Eligibility is based on three combined criteria.

1. The property must hold an EPC rating of D, E, F or G.
2. The household must usually meet an income threshold of £36,000 per year or less, or sit within Index of Multiple Deprivation deciles 1 or 2, or be in receipt of a qualifying means tested benefit.
3. The home must sit within a participating local authority area. As of February 2026, 74 projects covered 271 local authorities, or 97 per cent of eligible English councils.

For households that qualify, the smart tariff conversation becomes purely about minimising running costs from day one, because the upfront capital cost is fully funded.

What to Check Before You Switch

Before you sign up to any heat pump tariff, work through a five point checklist.

1. Confirm your smart meter is SMETS2 and is sending half hourly data. Check this in your in home display settings or by asking your current supplier.
2. Gather the paperwork. You will need the MCS installation certificate for the heat pump or photographs of the outdoor unit, plus a recent electricity bill.
3. Estimate your annual electricity demand using last year's bill or supplier dashboard. If you have only had the heat pump for a few months, scale up the cold weather usage to a full year.
4. Map your daily heating pattern. If most of your heat demand is overnight, E.ON Next Pumped or British Gas Heat Power are strong matches. If you can preheat at lunchtime, Cosy Octopus uses its second window well.
5. Check exit fees on your current tariff. Heat pump tariffs from EDF, Octopus, British Gas and E.ON have no minimum term and no exit fees, but some legacy fixed tariffs you may already be on do.

Common Mistakes to Avoid

Three traps catch out new heat pump owners regularly.

1. Switching to a heat pump tariff before the smart meter is confirmed working. If the meter is not sending half hourly data, the supplier will hold you on the standard rate until it is.
2. Letting the heat pump run unmanaged on a time of use tariff. The unit will happily heat at peak rates if no schedule is set. Always programme the controller or the manufacturer app to favour off peak windows.
3. Choosing the cheapest off peak rate without checking the peak rate. Cosy Octopus has the lowest off peak of any major tariff at 14.53p per kWh, but the 51.68p peak rate punishes any 4pm to 7pm consumption heavily. EDF Heat Pump Tracker is the safer choice if you cannot avoid evening peak demand.

The Direction of Travel: Half Hourly Settlement and Smarter Tariffs

The Department for Energy Security and Net Zero is rolling out Market Wide Half Hourly Settlement across 2026 and 2027, which will force every supplier to use half hourly data for every domestic customer. That change is expected to trigger a second wave of smart heat pump tariffs from suppliers who are not currently in the market, alongside richer variable tariffs that respond to wholesale prices in close to real time.

For households installing a heat pump in 2026, the practical implication is that today's tariff choice is not a long term commitment. Most heat pump tariffs have no exit fees, so the rational strategy is to take the best fit for your current heating pattern, run it for six months, and review with a year of half hourly data in hand.

Cucumber Eco's Advice for Anyone Installing a Heat Pump in 2026

If you are installing a heat pump in 2026, build the tariff choice into the project from the start. The right tariff turns a heat pump from a sensible carbon decision into a strong financial one. Cucumber Eco can guide homeowners and landlords through the Boiler Upgrade Scheme application, the Warm Homes Plan and the Local Grant eligibility check, and the post install tariff switch in one consultation. Speak to the team at cucumbereco.co.uk to see which route fits your home.