Electric Boiler vs Heat Pump: Full Cost Comparison
A heat pump uses 60 to 70% less electricity than an electric boiler to produce the same heat. For a 3-bed semi, that is the difference between £3,158 per year (electric boiler) and £745 per year (heat pump on a heat pump tariff). With the £7,500 BUS grant, a heat pump pays for itself in 1 to 3 years if you are replacing an electric boiler. This is the strongest financial case for a heat pump of any heating system swap.
Why the difference is so large
An electric boiler converts 1 kWh of electricity into 1 kWh of heat. It is essentially a giant kettle. Every unit of heat costs you the full electricity price: 26.32p at the Ofgem price cap for October to December 2026.
A heat pump extracts heat from outside air and upgrades it using a compressor. For every 1 kWh of electricity consumed, it delivers 2.5 to 3.5 kWh of heat (the COP or coefficient of performance). So each unit of heat costs you only 7 to 10p, even at the same electricity price.
This is not a small difference. It is the difference between the most expensive and one of the cheapest heating systems available.
Running cost comparison
| Property type | Electric boiler | Heat pump (standard tariff) | Heat pump (HP tariff) | Annual saving (HP tariff) |
|---|---|---|---|---|
| 2-bed terrace | £2,106 | £726 | £497 | £1,609 |
| 3-bed semi | £3,158 | £1,089 | £745 | £2,413 |
| 3-bed detached | £3,948 | £1,361 | £931 | £3,017 |
| 4-bed detached | £4,738 | £1,634 | £1,117 | £3,621 |
Electric boiler assumes 100% efficiency at 26.32p/kWh. Heat pump COP 2.9. Standard tariff 26.32p/kWh. HP tariff ~18p/kWh. Ofgem price cap, October to December 2026. Well-insulated properties. Heat demand: 8,000 kWh (2-bed) to 18,000 kWh (4-bed detached).
Even on a standard electricity tariff (no special heat pump tariff), the heat pump saves £1,380 to £3,104 per year compared to an electric boiler. On a heat pump tariff, the savings are even larger.
Use our boiler vs heat pump calculator for your specific property.
Upfront cost comparison
| System | Purchase and install | After BUS grant | Radiators/cylinder | Total out of pocket |
|---|---|---|---|---|
| Electric boiler (new) | £1,000 to £2,500 | n/a (no grant) | £0 | £1,000 to £2,500 |
| Air source heat pump | £9,000 to £12,000 | £1,500 to £4,500 | £2,000 to £4,000 | £3,500 to £8,500 |
Heat pump costs for a 3-bed semi. BUS grant of £7,500. Radiator upgrades needed for most electric boiler homes switching to heat pump. See radiator sizing guide.
The heat pump costs more upfront, but with £2,413 per year in running cost savings (3-bed semi on HP tariff), the payback is under 2 years for the heat pump cost and under 4 years including radiator upgrades. No other heating system switch pays back this fast.
Electric boiler homes are the best case for heat pumps
If you currently heat with an electric boiler, a heat pump saves you more money per year than any other starting point. Gas boiler homes save £318/yr by switching. Electric boiler homes save £2,413/yr. The economics are not even close.
When an electric boiler still makes sense
Small flats with no outdoor space. If you live in a mid-floor flat with no balcony, garden, or external wall suitable for a heat pump outdoor unit, an electric boiler may be your only option. The unit is compact, wall-mounted, and requires no outdoor equipment.
Very low heat demand. A well-insulated small flat using under 3,000 kWh of heat per year may cost only £790 on an electric boiler. A heat pump on a heat pump tariff would cost around £186, a saving of about £600 per year, so the payback stretches to 6 to 14 years rather than 1 to 3. For small, efficient properties, the maths is less compelling.
Budget constraints. If you cannot afford the upfront cost of a heat pump (even after the grant), an electric boiler is a functional heating system. But consider 0% finance options through MCS installers, which spread the cost over 5 to 10 years while you save from day one.
Temporary situation. If you are renting or plan to move within 2 years, the upfront investment may not pay back in time.
The switch: what is involved
Replacing an electric boiler with a heat pump involves installing the outdoor unit (needs wall or garden space), connecting refrigerant pipework from outdoor to indoor unit, installing a hot water cylinder (if you do not have one already), upgrading radiators that are too small for heat pump flow temperatures, adding heating controls, and removing the old electric boiler.
The work takes 2 to 4 days. Your MCS installer handles everything including the BUS grant application. Read our radiator sizing guide to understand which radiators may need upgrading.
Most electric boiler homes do not have a hot water cylinder (electric boilers often provide instant hot water like a combi). You will need one installed for the heat pump, which adds £800 to £1,500 to the cost.
For the full cost by property type, see our heat pump cost by house type guide. Use our heat pump calculator for a personalised estimate.
Combining with solar panels
Electric boiler homes have the most to gain from solar panels because all your heating runs on electricity. A 4 kW solar system generates free electricity that directly offsets your heating bill. Combined with a battery and a heat pump, your heating costs can drop below £400 per year.
Even without switching to a heat pump, adding solar panels to an electric boiler home reduces annual costs by £400 to £800. Adding a heat pump later compounds the savings further.
Manage your heating efficiently with a smart thermostat. Track your electricity usage with an energy monitor to see the real difference before and after switching.
Frequently asked questions
Is a heat pump cheaper to run than an electric boiler?
Yes. A heat pump uses 60 to 70% less electricity for the same heat. A 3-bed semi saves £2,413/yr on a heat pump tariff. Use our calculator for your property.
How much does an electric boiler cost to run per year?
£2,100 to £4,700 depending on property size. It is the most expensive common heating system because electricity costs 3.3 times more per kWh than gas.
Should I replace my electric boiler with a heat pump?
If you have outdoor space for the unit, almost certainly yes. The £7,500 BUS grant makes payback 1 to 3 years. No other heating switch pays back this fast.
What are the advantages of an electric boiler?
Cheaper to buy, smaller, silent, no outdoor unit, no planning considerations. Only makes sense for small flats with no outdoor space or very low heat demand.
Can I get a grant to replace an electric boiler?
Yes. The BUS grant provides £7,500. ECO4 may also cover insulation to reduce your heat demand before switching. Check our grant eligibility checker.
Data sources
Running costs calculated from Ofgem price cap, October to December 2026. Heat demand data from Energy Saving Trust. BUS grant from GOV.UK.