The UK government is aiming to install 450,000 heat pumps annually by 2030, according to a government target outlined in January 2026. This push comes alongside a £2.7 billion boiler upgrade scheme offering up to £7,500 to homeowners who switch from gas boilers to heat pumps.
Despite the significant investment, the viability of a widespread transition to heat pumps hinges on the relative cost of electricity versus gas, a challenge highlighted by energy industry figures. While a well-configured heat pump can use as little as a quarter of the energy of a gas boiler, the current price disparity in the UK undermines the economic incentive for many households.
Greg Jackson, chief executive of Octopus Energy, the UK’s largest retail energy supplier and a major installer of heat pumps, acknowledged the issue. “In the UK, currently, electricity is about four and a bit times more expensive than gas,” he said. He contrasted this with the situation in other European countries, noting that in Germany, electricity is three times the price of gas, and in France, it’s just over twice as expensive. “In Scandinavia, it’s in places almost at parity,” Jackson added. Octopus currently installs around 1,000 heat pumps each month.
The price difference is crucial, as heat pumps, while more efficient, rely on electricity to operate. According to EDF Energy, air source heat pumps draw heat from outside air and transfer it into a home, even in cold weather, offering a low-carbon alternative to gas boilers. They do not use flammable gas, aligning with the UK’s carbon emission reduction goals for 2030.
A hybrid heat pump system, combining a heat pump with an existing gas, oil, or LPG boiler, offers another potential pathway, according to the Energy Saving Trust. Though, the core economic equation remains dependent on electricity prices.
Recent discussion on Reddit’s AskUK forum reflects homeowner concerns about the cost-effectiveness of heat pumps, with users questioning whether the savings from increased efficiency outweigh the higher price of electricity. One user noted the require for a hot water storage tank, and the potential limitations that might impose.
The government has opted against phasing out new gas boilers by 2035, choosing instead to focus on incentives for heat pump adoption and home insulation upgrades. Labour’s proposed £15 billion warm homes plan aims to overhaul 5 million dwellings, potentially lifting 1 million people out of fuel poverty, but relies on grants, loans, and subsidies to encourage the transition to cleaner heating systems.
