British Gas has unveiled a new energy deal that claims to save heat pump owners up to £450 a year on their energy bills – joining a slew of rival incentives to get households to replace gas boilers.

The National Audit Office said in March the high cost of heat pumps and a lack of understanding were preventing more households from choosing the energy-saving devices.

In response, the Government and energy firms have brought in cheaper heat pumps, grants and better energy deals for those that get the devices fitted.

Here are all the discounts available for homes with a heat pump or thinking of getting one.

Price of the pump: The upfront cost of a heat pump can be high, but there is help available

Price of the pump: The upfront cost of a heat pump can be high, but there is help available

Cheap energy deals

British Gas

A new British Gas offer claims to save households up to £450 a year on energy bills when switching to a heat pump.

To get cheaper electricity, customers must get British Gas to fit an air source heat pump before 31 September 2024.

They must then take out a British Gas energy deal, which allows them to access the special heat pump tariff.

Any electricity used by the heat pump will be discounted to 14p per kilowatt-hour (kWh) for the first 12 months of the deal. After that point the price is unknown.

A British Gas spokesman said: ‘As with all our energy offers, we continually review our pricing to ensure we offer value for our customers. 

‘We will do the same with our heat pump energy offer following the 12 months of the discounted rate.’ 

The average home currently pays 24.5p per kWh for electricity.

This is due to the Ofgem price cap, which limits gas and unit rates for those on variable-rate energy deals paid by direct debit.

More than 80 per cent of UK homes are on energy deals limited by the price cap.

British Gas says this will save customers up to £450 on their heating bills when compared to a D-rated gas boiler. The savings will be credited to energy bills every month.

EDF

EDF has a heat pump tariff that claims to save customers with a heat pump £164 a year on energy bills – provided they use it during two daily windows.

The EDF Heat Pump Tracker tariff is available to new and existing customers with any form of heat pump. The energy firm claims it will never charge more than price cap rates.

The tariff offers six hours of cheap electricity every day, between 4am to 7am and 1pm to 4pm.

Using your heat pump during those hours means EDF will knock 10p per kWh off whatever the price-capped electricity unit rate is in your area. 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 of the two windows will be charged at the full rate, and the awkward timing of the windows may not align with times that customers actually want to heat their homes, such as the evenings.

Households must also have a smart meter to sign up.

On the clock: Consumers must have a smart meter to sign up to many heat pump tariffs

On the clock: Consumers must have a smart meter to sign up to many heat pump tariffs

Ovo

Ovo’s Heat Pump Plus is advertised as saving up to £300 a year on heating bills versus staying on a price-capped tariff.

Similar to those offered by British Gas and EDF, the tariff offers energy rates of 15p per kWh just for a heat pump.

The offer is an add-on to any Ovo energy deal. To apply, customers must have a Vaillant heat pump, or have bought a heat pump through Ovo’s partner Heat Geek.

They must also have a smart meter fitted.

Any savings are credited back to the customer.

Octopus Energy

The Cosy Octopus tariff offers cheap electricity between 4am to 7am and from 1pm to 4pm every day – not just for heat pumps.

Octopus says this tariff can save the average home up to £300 a year on energy bills.

Electricity used during the two offpeak windows will be 51 per cent cheaper than the firm’s price-capped Flexible Octopus tariff rates.

But the deal comes with a major string attached. Any electricity you use between 4pm and 7pm will be charged at 45 per cent above

For example, in mid Kent Octopus charges 25.29p per kWh for electricity on its price-capped tariff.

Someone with Cosy Octopus would pay around 12.3p for electricity used in its two offpeak windows.

But that rises to an alarming 36.67p per kWh between 4pm and 7pm, when many households will have high energy use normally.

Customers must have a smart meter to sign up.

Heat pump grants

£7,500 Government grant

Homeowners swapping their gas or oil-powered boilers for heat pumps can get Government grants of up to £7,500 towards installation under its Boiler Upgrade Scheme (BUS).

To get the grant, homeowners need to agree a quote for the work with an Microgeneration Certification Scheme (MCS) certified installer, who will then do all the paperwork.

Energy regulator Ofgem will contact the customer after that to confirm they would like to proceed.

£2,500 from Worcester Bosch

Homeowners with gas boilers could get £2,500 for getting a heat pump fitted – if they pick one from Worcester Bosch.

Worcester Bosch’s ‘Clean Heat Cashback Pledge’ offers the cash in return for choosing a Bosch heat pump, or £1,000 if they pick a Bosch hybrid system.

Box of treats: Consumers that get a Worcester Bosch heat pump can get a £2,500 grant

Box of treats: Consumers that get 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 nation’s largest energy firm 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 upgrade work is needed to the property getting a heat pump.

However, that is not available for all homes. British Gas said the average home getting a heat pump paid £5,690 on top of the £7,500 Government grant.

Octopus

Octopus Energy says its ‘Cosy Octopus’ heat pump can be fitted for free, or for as little as £500 – provided customers can get the full £7,500 BUS grant.

A homeowner must also own a property that does not need any upgrade work to make it suitable for a heat pump. This could include requiring new insulation, radiators or pipes.

Homes that do need some upgrades to fit a heat pump can get the Octopus heat pump for around £3,000 after the BUS grant.

Ovo

Ovo has a heat pump deal that could be installed for as little as £500 – again, provided a homeowner can get the full £7,500 BUS grant.

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