Choosing the right electricity tariff can make a real difference to the running costs of your heat pump. With more energy suppliers offering tariffs designed for low-carbon heating, it’s worth taking the time to understand your options and review whether your current tariff is still the best fit for your home.

In this guide, we’ll explain how heat pump tariffs work, what to look for when comparing them, and why it’s important to check the latest information directly with your energy supplier before making a decision.

Why your electricity tariff matters

Unlike gas boilers, heat pumps run on electricity. However, because they typically produce three to four units of heat for every unit of electricity they consume, they can provide an efficient and cost-effective way to heat your home.

The tariff you choose can have a significant impact on your running costs, particularly if you have a smart meter and are able to take advantage of time-of-use electricity pricing.

Many suppliers now offer tariffs aimed at customers with low-carbon technologies such as heat pumps, electric vehicles, solar PV and battery storage. These tariffs often provide lower electricity prices during certain periods of the day in exchange for higher prices at peak times.

The most suitable tariff for your home will depend on factors such as:

  • When your heat pump typically runs.
  • Your household’s electricity usage.
  • Whether you have solar panels or battery storage.
  • Whether you have an electric vehicle.
  • Your willingness to shift some electricity use to off-peak periods.

What is a heat pump tariff?

A heat pump tariff is an electricity tariff designed to work well with homes heated by electric heating systems, including air source and ground source heat pumps.

Many of these tariffs use time-of-use pricing, where electricity costs less during selected periods of the day. A well-designed heat pump system can often take advantage of these lower-cost periods while maintaining a comfortable temperature throughout your home.

Not every household will benefit from the same tariff, so it’s important to compare the options available to you rather than assuming one supplier or tariff will always be the most suitable.

What should you look for?

When comparing electricity tariffs, consider:

Unit rates

Look beyond the headline price. Compare both peak and off-peak electricity rates, as well as the daily standing charge.

Time periods

Different suppliers offer discounted electricity at different times of the day. Think about whether these periods match how your household uses electricity.

Eligibility

Some tariffs are only available to customers who meet certain requirements, such as:

  • Having a compatible smart meter.
  • Agreeing to half-hourly meter readings.
  • Owning eligible low-carbon technology.

Always check the supplier’s latest eligibility criteria before switching.

Flexibility

Some tariffs may suit households with battery storage or electric vehicles particularly well, while others may simply offer lower overnight electricity prices.

Examples of heat pump-friendly tariffs

Many UK energy suppliers now offer tariffs that may be suitable for homes with heat pumps or other low-carbon technologies.

These include suppliers such as:

  • Octopus Energy
  • OVO Energy
  • EDF
  • ScottishPower
  • E.ON Next
  • British Gas

Tariffs, pricing, eligibility and availability change regularly, so it’s important to visit the relevant supplier’s website for the latest information before making a decision.

Rather than focusing on a single tariff, consider how each option fits your household’s energy usage and heating requirements.

Can you switch tariffs after installing a heat pump?

Yes. You’re free to review your electricity tariff at any time, subject to the terms of your current energy contract.

Many homeowners initially remain on their existing tariff before reviewing the market once they’ve seen how their heat pump performs throughout the year.

As more suppliers continue to develop tariffs for low-carbon homes, it’s worth checking whether a different tariff could better suit your household.

Heat pumps, solar panels and battery storage

If you have solar PV or battery storage, your electricity tariff becomes even more important.

A battery system can store cheaper electricity purchased during off-peak periods or surplus electricity generated by your solar panels, helping reduce the amount of electricity you need to buy during more expensive periods.

Choosing a tariff that complements your home’s technology can help improve overall system performance and reduce energy costs.

Should everyone choose a time-of-use tariff?

Not necessarily.

Time-of-use tariffs can work very well for many households, but they aren’t the right choice for everyone.

Factors including occupancy patterns, heating habits, insulation levels and other electrical appliances all influence whether a particular tariff is likely to be beneficial.

If you’re unsure, it’s worth discussing your options with your energy supplier or reviewing your electricity usage before switching.

Keeping your running costs low

The electricity tariff you choose is only one part of the picture.

The efficiency of your heat pump also depends on factors such as:

  • Correct system design.
  • Accurate heat loss calculations.
  • Appropriate radiator sizing.
  • Good system commissioning.
  • Suitable flow temperatures.
  • Effective controls.
  • Ongoing servicing and maintenance.

A well-designed and properly installed heat pump is more likely to operate efficiently regardless of which tariff you choose.

Our advice

At IMS Heat Pumps, we encourage customers to review their electricity tariff regularly, particularly if they’ve recently installed a heat pump, solar PV or battery storage.

While we can explain how different types of tariffs work, electricity prices, tariff structures and eligibility change frequently. For the latest information, always refer to the relevant energy supplier before making any decision about switching.

If you’re still considering installing a heat pump, our Heat Pump Funding Guide explains what grants and funding may be available.

Frequently Asked Questions

What’s the best electricity tariff for a heat pump?

There isn’t a single tariff that’s right for everyone. The most suitable option depends on your household’s electricity usage, heating patterns, and whether you have technologies such as solar panels, battery storage or an electric vehicle.

Do I need a smart meter?

Some smart tariffs require a compatible smart meter and half-hourly meter readings. Check the supplier’s eligibility requirements before applying.

Can I change tariffs later?

Yes. Most homeowners can switch tariffs, although any exit fees or contract terms should be checked with their supplier.

Are heat pump tariffs always cheaper?

Not necessarily. Some tariffs offer cheaper electricity during selected periods, while others have different pricing structures. It’s important to compare the whole tariff rather than focusing on a single unit rate.

Disclaimer

Electricity tariffs, prices, eligibility criteria and time-of-use periods are subject to change. Information in this article is intended as a general guide only. Always refer to the relevant energy supplier for the latest tariff information, terms and conditions before making a decision.