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British Gas has unveiled a new energy deal that aims to save heat pump owners up to £450 a year on their energy bills, joining a host of rival incentives to get households to replace gas boilers.
The National Audit Office said in March that the high cost of heat pumps and a lack of understanding were preventing more households from choosing energy-saving devices.
In response, the Government and energy companies have introduced cheaper heat pumps, subsidies and better energy deals for those who install the devices.
Here you have all the discounts available for homes with a heat pump or thinking about getting one.
Pump Price: The initial cost of a heat pump can be high, but help is available
Cheap energy deals
British gas
A new offer from British Gas aims to save households up to £450 a year on energy bills by switching to a heat pump.
To get cheaper electricity, customers must get an air source heat pump installed by British Gas by 31 September 2024.
They will then have to sign an energy agreement with British Gas, which will allow them to access the special rate for heat pumps.
Any electricity used by the heat pump will be discounted at 14 pence per kilowatt-hour (kWh) for the first 12 months of the agreement. After that moment the price is unknown.
A British Gas spokesperson said: ‘As with all our energy deals, we continually review our prices to ensure we are delivering value to our customers.
“We will do the same with our heat pump energy offer after the 12 months discounted tariff.”
The average household currently pays 24.5p per kWh for electricity.
This is due to Ofgem’s price cap, which caps gas and unit rates for those on variable rate energy contracts paid by direct debit.
More than 80 per cent of UK homes have energy deals capped by the price cap.
British Gas says this will save customers up to £450 on their heating bills compared to a D-rated gas boiler. The savings will be credited to their energy bills every month.
FED
EDF has a heat pump tariff that aims to save customers with a heat pump £164 a year on energy bills, provided they use it for two daily periods.
The EDF Heat Pump Tracker tariff is available to new and existing customers with any type of heat pump. The energy company says it will never charge more than maximum price rates.
The tariff offers six hours of cheap electricity every day, from 4 a.m. to 7 a.m. and from 1 p.m. to 4 p.m.
Using your heat pump during those hours means EDF will reduce whatever the maximum priced electricity unit rate is in your area by 10p per kWh. The national average is 24.5p per kWh, so EDF customers could run their heat pumps for 14.5p per kWh.
However, running a heat pump outside both windows will be charged at the full rate, and inconvenient window timing may not coincide with times when customers really want to heat their homes, such as evenings.
Households must also have a smart meter in order to register.
On the clock: Consumers must have a smart meter to subscribe to many heat pump tariffs
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Ovo’s Heat Pump Plus is advertised to save up to £300 a year on heating bills compared to sticking to a capped price tariff.
Similar to those offered by British Gas and EDF, the tariff offers energy rates of 15p per kWh for a heat pump only.
The offer is complementary to any Ovo energy agreement. To apply, customers must own a Vaillant heat pump or have purchased a heat pump through Ovo partner Heat Geek.
They must also have a smart meter installed.
Any savings are credited to the customer.
Octopus energy
The Cozy Octopus tariff offers cheap electricity from 4:00 a.m. to 7:00 a.m. and from 1:00 p.m. to 4:00 p.m. every day, not just for heat pumps.
Octopus says this tariff can save the average household up to £300 a year on energy bills.
Electricity used during the two off-peak windows will be 51 percent cheaper than the company’s Flexible Octopus peak price rates.
But the agreement comes with an important compromise. Any electricity you use between 4:00 pm and 7:00 pm will be charged at 45 percent more.
For example, Mid-Kent Octopus charges 25.29p per kWh of electricity on its capped price tariff.
Someone with Cozy Octopus would pay around 12.3p for electricity used in their two least active windows.
But that figure rises to an alarming 36.67 pence per kWh between 4pm and 7pm, when many homes typically consume high energy.
Customers must have a smart meter to register.
Heat pump subsidies
£7,500 government grant
Homeowners switching from their gas or oil boilers to heat pumps can get government grants of up to £7,500 towards installation under its Boiler Upgrade Scheme (BUS).
To get the grant, homeowners must agree a quote for the work with a Microgeneration Certification Scheme (MCS) certified installer, who will then do all the paperwork.
Energy regulator Ofgem will contact the customer afterwards to confirm they wish to proceed.
£2,500 from Worcester Bosch
Homeowners with gas boilers could get £2,500 for installing a heat pump, if they choose one from Worcester Bosch.
Worcester Bosch’s ‘Clean Heat Cash Back Pledge’ offers cash in return for choosing a Bosch heat pump, or £1,000 if they choose a Bosch hybrid system.
Box of goodies: Consumers purchasing a Worcester Bosch heat pump can get a £2,500 grant
cheap heat pumps
British gas
British Gas has a heat pump that can be installed from £499 plus the £7,500 grant.
The country’s largest energy company said its starting price for heat pump installations was £7,999 – or £450, assuming the homeowner can access the full £7,500 BUS grant.
That £450 price assumes no improvement work is needed for the property to get a heat pump.
However, this is not available for all homes. British Gas said the average household receiving a heat pump paid £5,690 on top of the £7,500 government grant.
Octopus
Octopus Energy says its ‘Cozy Octopus’ heat pump can be installed for free or for as little as £500, provided customers can get the full £7,500 BUS grant.
The owner must also own a property that does not need any improvement work to be suitable for a heat pump. This could include the need for new insulation, radiators or pipes.
Homes that need some upgrading to install a heat pump can get the Octopus heat pump for around £3,000 after the BUS grant.
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Ovo has a heat pump deal that could be installed for as little as £500, provided the homeowner can get the full £7,500 BUS grant.
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