The UK is on the path to a greener, more sustainable future. There’s a momentum behind a shift away from traditional fossil fuel-based heating systems and over to an all-electric system.
But it’s not a straightforward journey. Currently, gas boilers heat around 80% of UK homes. If we as a country are to reach net zero targets, the transition to low-carbon technologies needs to pick up pace.
Two contenders being put forward for non-fossil fuel residential heating systems are air-source heat pumps and electric boilers. Both run on electricity, which is a good start. However, they differ in terms of efficiency, costs and environmental impact – what’s the best option for homeowners?
Quick overview of air source heat pumps and electric boilers
Air source heat pumps (ASHP) and electric boilers are two distinct technologies designed to provide heating for homes.
ASHP are part of the wider heat pump technology, which includes ground source heat pumps. ASHPs come in two main forms:
- Air-to-water systems – a ‘wet’ system connected to radiators and/or underfloor heating. They can also provide hot water needs.Â
- Air-to-air systems – a type of air conditioning that circulates warm air via vents and ducts. This system can’t provide hot water.Â
Air source heat pumps work in a highly efficient way to extract heat from the outside air and transfer it into your home using a refrigerant and a compression cycle. These systems are especially effective in well-insulated homes and are an excellent option for reducing carbon emissions.
Electric boilers operate in a very similar way to a traditional gas boiler. The main difference is that they use electricity to generate heat rather than gas. There are a few main types of electric boilers available, including heat-only units, system boilers that supply heating and hot water with a storage cylinder or combi electric boilers that provide instant hot water without the need for a cylinder.
Efficiency: electric Boilers vs Heat Pumps
In real terms this means they produce 3–4kW of heat for every 1kW of electricity that goes in, making them significantly more energy-efficient than electric boilers. The efficiency of heat pumps can drop slightly in extreme cold weather, but it should still be well over 200% efficient.
Heat pumps can achieve these extremely high efficiency ratings because they collect heat energy from the outside air and use a cycle of compression and expansion to concentrate it, as opposed to burning a fuel.
Overall efficiency for any heating system does depend on a few other factors, such as system design, system sizing, insulation levels and heat loss. However, the average homeowner with a heat pump will use around three times less electricity compared to an electric boiler for the same heat output. Electric boilers tend to be very efficient across the entire year. They often have impressive efficiency ratings of 99–100%, which means they convert almost all of the electricity they consume into heat.
Electric boilers are also flexible in their sizing. They can range in power output from 3kW for small spaces to upwards of 30kW for larger homes.
That said, the 1:1 energy conversion rate of electric boilers pales in comparison to heat pumps.
Air source heat pumps are the champions of efficiency, working at rates of around 300-400%. The efficiency rating of heat pumps is known as their Coefficient of Performance (CoP), and is given in digits such as 3 to 4.
Cost: Which is more economical – Electric Boilers or Heat Pumps?
There’s no doubt that electric boilers are more affordable upfront. The cost to install an electric boiler is similar to a gas boiler, at around £3,000 to £4,000. This will depend on the electric boiler make, design and size.
Air source heat pumps have a much higher upfront cost of between £8,000 – £15,000, again depending on the system and property size. However, the UK government’s Boiler Upgrade Scheme (BUS) offers grants of £7,500 for heat pump installations, which reduces the average cost to around £5,100.
The BUS grant is available for households shifting away from fossil fuel heating systems and towards heat pumps and biomass boilers. Electric boilers or hybrid heat pumps aren’t covered by the grant.
Running costs of heat pumps vs electric boilers
When it comes to on-going running costs, the roles are reversed.
Running a 12kW electric boiler for an average of 5 hours a day (at a unit electricity price of 21.5p/kWh) would cost around £4,880 a year. This high running cost makes electric boilers less economical over the long term, particularly for households relying solely on grid electricity.
Pairing an electric boiler with solar panels can help offset costs, as the boiler can use free solar energy during daylight hours. Time-of-use tariffs can also reduce expenses by allowing the boiler to operate during off-peak periods. However, these measures only partially reduce the high running costs.
Heat pumps on the other hand are considerably lower to run thanks to their excellent efficiency – although the high unit cost of electricity still adds up.
With the right heat pump, high quality insulation and a heat pump tariff, such as those from Octopus Energy, it’s said that a household could save more than 50% on running costs compared to a gas boiler. Versus an electric boiler, your running costs can be 3-4 times less across the year, saving you hundreds, if not thousands, of pounds. Just like electric boilers, you can also use solar panels and battery storage to partially run a heat pump.
When you add up these annual savings, it doesn’t take too long for a heat pump to make up for the higher upfront costs. The bonus here is that you then have on-going savings for the foreseeable.
Energy savings of Electric Boilers and Air Source Heat Pumps
When we talk about costs and efficiency, we need to discuss energy savings too – for most homeowners this is what you want to know first and foremost.
Due to their reliance on the grid and 1:1 ratio of energy in, energy out, electric boilers offer minimal energy saving potential. A nearly 100% efficiency is great, but because of the high price of electricity from the grid, you’re unlikely to make savings if you switch from say a gas boiler that operates at a third of the cost.
Hooking your electric boiler up with solar panels will help reduce running costs, but probably not as much as you’d like. This is because you’ll be mainly operating your boiler during the early morning and in the evening – precisely when the sun isn’t usually about in the UK. For this reason, battery storage is always a fantastic idea with solar.
Heat pumps excel when it comes to energy savings due to their high CoP. This efficiency translates to significant reductions in electricity consumption and heating bills, when the heat pump is installed to a high quality in a well-insulated home. This is slightly impacted by the high cost of electricity, which can be partially offset by adding renewables to your home set up.
Environmental impact: electric Boilers vs air source Heat Pumps
Both air source heat pumps and electric boilers produce zero emissions at the point of use.
However, because they both use electricity, their environmental impact all depends on where that electricity is sourced from. Despite being increasingly powered by renewable energy, the UK grid is still heavily reliant on gas-fired power stations to produce electricity – thankfully coal has all been but phased out now.
So, an electric boiler that’s 100% powered from the grid isn’t particularly environmentally friendly. However, one that’s powered by solar panels is much more sustainable.
Overall though, heat pumps are a better choice from an environmental perspective. This is because of the way they use latent heat in the air to generate more heat energy than they consume in electricity. It’s that efficiency again.
Pairing a heat pump with a green energy tariff or solar panels can further reduce its environmental footprint, which makes them the standout option.
Installation factors to consider
Electric boilers are simple and straightforward to install for those with the know-how and expertise. Their compact design allows them to fit into small spaces, making them ideal for flats, apartments and smaller homes. They don’t require a flue or outdoor unit, which minimises installation complexity and disruption.
Heat pumps require more planning and preparation. Outdoor space is necessary for the external unit, which houses the fan and heat exchanger. This can be a challenge for some properties. You’ll also need indoor space for the indoor unit or units, made up of a circulation pump, main controls and a hot water cylinder if installing an air-to-water heat pump.
Installing a heat pump can also involve modifications to existing heating systems, such as upgrading radiators or adding underfloor heating. Your existing radiators may be ok if they are the correct size, but heat pumps do require large radiators to make up for the lower flow temperatures of the water. If necessary, this will add to the total cost.
Noise levels of Electric Boilers and Hear Pumps
You may read that heat pumps are noisy and can disturb neighbours. For the vast majority of installations, this isn’t true.
Heat pumps produce a low humming noise from their outdoor units during operation. This is a bit like the hum from your fridge rather than anything loud and disturbing.
Modern heat pump units are becoming quieter still. Some, such as the Grant Aerona³ R32, are Quiet Mark certified.
Electric boilers are very quiet, much quieter than a gas boiler when it’s in operation. If your electric boiler is making a noticeable hum or buzz, there may be something faulty going on.
Although heat pumps do make a low hum noise outside, the noise levels are almost negligible for both systems.
Electric Boiler vs Heat Pump: Full Cost Breakdown
When it comes to choosing between an electric boiler and a heat pump, cost is usually the deciding factor. Below is a detailed comparison covering installation, grants, running costs and long-term value – using the latest 2026 energy prices.
| Cost Factor | Electric Boiler | Air Source Heat Pump | Notes |
|---|---|---|---|
| Installation cost | £3,000 – £4,000 | £8,000 – £15,000 | Heat pump costs vary with property size and system complexity |
| Boiler Upgrade Scheme grant | Not eligible | £7,500 off | Reduces average heat pump cost to approx. £5,100–£7,500 |
| Effective cost after grant | £3,000 – £4,000 | ~£5,100+ | Heat pump becomes significantly more competitive after grant |
| Typical annual running cost | £3,500 – £5,500 | £1,000 – £2,000 | Based on 24.67p/kWh electricity (Ofgem Q2 2026 price cap). Heat pump assumes CoP of 3–4. |
| 2026 electricity unit rate impact | High – every kWh in = 1 kWh heat out. More electricity = more cost. | Lower – 1 kWh electricity produces 3–4 kWh heat | At 24.67p/kWh (Q2 2026 cap), heat pump savings are substantial vs electric boiler |
| Estimated 10-year total cost | £38,000 – £59,000 | £15,100 – £27,500 | Install + running costs combined. Assumes stable energy prices. |
| Annual maintenance | Minimal (£0 – £100) | Annual service ~£150 | Heat pumps require annual servicing, similar to a gas boiler |
| Payback period vs gas boiler | N/A – high running costs | Approx. 5–8 years | Depends heavily on insulation, property size and energy tariff |
Running costs calculated using the Ofgem Q2 2026 electricity unit rate of 24.67p/kWh (April–June 2026). Actual costs will vary based on property size, insulation, usage patterns and tariff. Heat pump running costs assume an average CoP of 3–4.
How 2026 Energy Prices Affect Running Costs
Understanding what you will actually pay to run either system in 2026 is critical to making the right choice. Ofgem’s Q2 2026 price cap (April to June 2026) sets the average electricity unit rate at 24.67p/kWh for direct debit customers – down from 27.69p/kWh in Q1 2026. The electricity-to-gas price ratio remains a key issue: gas currently sits at around 5.74p/kWh, meaning electricity costs more than four times as much per unit. This makes the heat pump’s efficiency advantage critical – at 300–400% efficiency, it partially closes that gap in a way an electric boiler simply cannot.
| Scenario | Annual kWh consumed | Annual cost (at 24.67p/kWh) | 10-year cost (excl. install) |
|---|---|---|---|
| 12kW electric boiler – average use | ~19,800 kWh | ~£4,885 | ~£48,850 |
| 12kW heat pump (CoP 3) – average use | ~6,600 kWh | ~£1,628 | ~£16,280 |
| 12kW heat pump (CoP 4) – well-insulated home | ~4,950 kWh | ~£1,221 | ~£12,210 |
| Electric boiler + solar panels (partial offset) | ~14,000 kWh grid | ~£3,454 | ~£34,540 |
Figures use Ofgem Q2 2026 electricity unit rate of 24.67p/kWh. Based on average 5 hours/day use for a 12kW system. Heat pump kWh consumption calculated by dividing heat output by CoP. Solar offset scenario assumes approximately 2,500–3,000 kWh annual solar self-consumption.
Even with the recent reduction in the electricity unit rate, an electric boiler heating a medium-sized home will cost in the region of £4,500–£5,500 per year to run. A heat pump doing the same job typically costs £1,200–£2,000 per year – a saving of over £3,000 annually in many cases. Heat pump-specific tariffs, such as those offered by Octopus Energy, can reduce unit costs further, improving the heat pump’s economics even more.
Which System Suits Your Property Type?
Not every home is equally suited to a heat pump or an electric boiler. The right choice depends heavily on property size, outdoor space, insulation levels and your existing heating setup.
| Property Type | Electric Boiler | Heat Pump | Key Considerations |
|---|---|---|---|
| Flat / apartment | ✓ Good fit | ✗ Usually not suitable | No outdoor space for heat pump unit. Electric boiler installs where gas boiler was. |
| Small terraced house | ✓ Good fit | ⚠ Possible with work | Heat pump can work if there is outdoor wall/garden space. May need radiator upgrades. |
| Semi-detached house | ⚠ High running costs | ✓ Good fit | Space for outdoor unit. Typically good insulation potential. Heat pump better long-term value. |
| Detached house | ⚠ Very high running costs | ✓ Ideal | Bigger homes need more heat output – heat pump efficiency advantage is greatest here. |
| Period / older property | ⚠ High running costs | ⚠ Assess carefully | Older properties often have poor insulation. Insulation improvements needed first – then heat pump becomes viable. |
| New build | ⚠ Consider alternatives | ✓ Ideal | New builds are often designed with heat pumps in mind – well insulated with underfloor heating. |
| Off-gas-grid property | ⚠ Running cost risk | ✓ Strong choice | Already paying for oil or LPG? A heat pump is likely your best route to lower running costs. |
✓ = generally a good fit | ⚠ = possible but with caveats | ✗ = not usually suitable. Always get a professional survey before committing to either system.
A few key points this highlights: flats and apartments are often the strongest case for electric boilers, where space constraints rule out a heat pump. Larger detached and semi-detached properties almost always benefit more from a heat pump, particularly once the £7,500 BUS grant is applied. Period properties need insulation work first – fitting a heat pump into a draughty Victorian terrace without upgrading insulation will lead to disappointment and high bills. Off-gas-grid homes currently on oil or LPG stand to make the biggest savings by switching to a heat pump.
Electric Boiler vs Heat Pump: Pros and Cons at a Glance
Electric Boiler
| Pros | Cons |
|---|---|
| Lower upfront cost (£3,000 – £4,000) | Very high running costs vs heat pump |
| Simple installation – fits where gas boiler was | 1:1 electricity-to-heat ratio means no efficiency gains |
| Compact – suits flats and small properties | No government grant currently available |
| No outdoor unit required | Not cost-effective as sole heating for larger homes |
| Very quiet operation | Running costs worsen as electricity prices fluctuate |
| Compatible with solar panels to offset costs | Poor long-term value for money compared to heat pump |
Air Source Heat Pump
| Pros | Cons |
|---|---|
| 300–400% efficiency (CoP of 3–4) | Higher upfront cost (£8,000 – £15,000 before grant) |
| £7,500 Boiler Upgrade Scheme grant available | Requires outdoor space for external unit |
| Running costs 3–4x lower than electric boiler | May need radiator upgrades or underfloor heating |
| Provides both heating and hot water (air-to-water systems) | Less suited to poorly insulated properties without improvements |
| Lower carbon emissions – especially with green tariff or solar | More complex installation and planning required |
| Government-backed – aligned with UK net-zero policy | Efficiency slightly lower in very cold weather |
Quick Verdict: Which Should You Choose?
- Heat pump: Best long-term choice for houses with outdoor space and reasonable insulation. The £7,500 BUS grant makes it the most economically sound option in 2026.
- Electric boiler: Best for flats, apartments, small homes, or as a transitional solution. Lower upfront cost but significantly higher running costs mean long-term savings are limited.
- 2026 energy context: At 24.67p/kWh (Ofgem Q2 2026 cap), every unit of electricity is expensive – the heat pump’s 300–400% efficiency advantage is more valuable than ever.
- Off-gas-grid properties: Heat pump is almost always the better choice over oil or LPG. Electric boiler is an option only if budget is very tight short term.
- Add solar panels: Either system benefits from solar, but the heat pump makes better use of off-peak tariffs and renewable generation.
Electric Boilers vs Air Source Heat Pumps: What comes out on top?
With all things combined, it’s a clear win for air source heat pumps. Both electric boilers and air source heat pumps have their strengths and limitations, but ASHP are a much better, long term option.
For homeowners with the necessary space and insulation, heat pumps can deliver future savings, improved efficiency and a smaller carbon footprint.
The government are also pushing heat pumps as they look to phase out 80% of gas boilers by 2035. The government plans are to install 600,000 a year by 2028. From January to July 2024, 30,000 heat pumps were installed in homes and businesses, which is a 45% increase on the same period last year. This is still a far cry from 600,000 but things will be ramping up, which means more competition and better options for homeowners.
