Your energy profile changes. Your electricity usage increases. Your tariff strategy must evolve.
Heat pumps are efficient, but they are electricity-powered. That means choosing the right electricity tariff is critical to keeping running costs low.
In this guide, Utility King explains from first principles:
How heat pumps affect energy consumption
Why traditional tariffs may no longer be suitable
What to look for when comparing energy deals
Whether fixed, variable, or time-of-use tariffs are best
How to optimise electricity costs for heat pump homes
If you've invested in low-carbon heating, your energy tariff should support that investment — not undermine it.
How Heat Pumps Change Your Energy Profile
To understand the best energy deals for heat pump homes, we must first understand what changes.
A traditional home
- Gas for heating
- Electricity for appliances and lighting
A heat pump home
- Electricity for heating
- Electricity for hot water
- Electricity for appliances
In many cases, gas usage drops significantly — or disappears entirely.
Your electricity consumption may double or even triple compared to a gas-heated home.
This makes electricity unit rate the most important cost driver.
How Heat Pumps Work (And Why Tariffs Matter)
A heat pump does not generate heat by burning fuel.
Instead, it transfers heat from:
Outdoor air (air source heat pump)
Ground (ground source heat pump)
It uses electricity to power the compressor and circulation system.
However, they still rely entirely on electricity pricing.
This means even small differences in electricity unit rate can have a significant annual impact.
What Makes an Energy Deal Suitable for Heat Pump Homes?
At Utility King, we recommend focusing on five key factors.
1. Competitive Electricity Unit Rate
Because heat pumps increase electricity demand, the unit rate per kWh becomes the most important element.
For high-consumption households:
- A small reduction in unit rate scales significantly across thousands of kWh.
When comparing energy deals for heat pump homes, always prioritise electricity cost over gas.
2. Low Standing Charges
Standing charges apply daily.
If your home is fully electric and no longer uses gas, you may be able to remove your gas supply entirely — avoiding gas standing charges.
Review:
- Electricity standing charge
- Whether maintaining a gas connection is still necessary
Standing charges matter more for efficient, well-insulated homes.
3. Time-of-Use Tariffs
Heat pumps can be ideal for time-of-use electricity tariffs.
These tariffs offer:
- Lower off-peak rates
- Higher peak rates
If your heat pump system:
- Uses thermal storage
- Heats water overnight
- Can shift demand to off-peak hours
You may significantly reduce running costs. Time-of-use or Economy 7 tariffs can be particularly effective in heat pump homes.
4. Fixed vs Variable Tariffs
You must decide between:
Fixed Energy Tariffs
- Lock in your rate
- Provide cost predictability
- Protect against price rises
Variable Tariffs
- Flexible
- May decrease if market prices fall
- Expose you to volatility
Because heat pumps increase electricity dependency, many homeowners prefer fixed tariffs for budgeting stability. Higher electricity reliance means greater exposure to price changes.
5. Smart Meter Compatibility
Most heat pump homes benefit from:
- Smart meter monitoring
- Real-time usage tracking
- App-based energy management
Smart meters enable:
- Accurate billing
- Monitoring peak usage
- Optimising heating schedules
An energy supplier with strong smart functionality can enhance cost control.
Heat Pump + Solar Panels: A Special Case
Many heat pump homes also install solar panels.
In this case, you must compare:
Electricity import tariff (what you pay)
Smart Export Guarantee (SEG) tariff (what you earn)
The best energy deal may not be the lowest import rate alone.
If your export rate is strong, it can offset higher import costs.
Balancing import and export tariffs is key.
Typical Electricity Usage for Heat Pump Homes
Electricity usage in heat pump homes varies based on:
Property size
Insulation quality
Outdoor temperature
System efficiency
Occupancy
However, annual electricity usage can range significantly higher than gas-heated homes.
This reinforces why heat pump households must compare electricity tariffs carefully.
Common Mistakes Heat Pump Owners Make
Staying on a Standard Variable Tariff
This is often the most expensive long-term option.
Ignoring Off-Peak Opportunities
Failing to leverage time-of-use tariffs can increase running costs unnecessarily.
Keeping Gas Supply Unnecessarily
If you no longer use gas, removing the connection can eliminate daily standing charges.
Not Reviewing Tariffs After Year One
Your first year of usage may differ from estimates. Always reassess after gathering real consumption data.
Is Switching Energy Supplier Safe for Heat Pump Homes?
Yes.
Switching energy supplier:
Does not affect your heat pump system
Does not change infrastructure
Does not interrupt electricity supply
Is fully regulated
Only your billing provider changes. Your heating system remains untouched.
Utility King's Perspective
At Utility King, we believe installing a heat pump is a long-term investment in energy efficiency and sustainability.
But to maximise that investment, your tariff must match your new energy profile.
The best energy deals for heat pump homes are those that:
Offer competitive electricity unit rates
Minimise standing charges
Support time-of-use optimisation
Provide smart meter integration
Deliver pricing stability where needed
Heat pump homes are electricity-driven. That makes electricity comparison a strategic financial decision — not a minor adjustment.
Frequently Asked Questions
Is electricity more expensive with a heat pump?
Electricity usage increases, but heat pumps are efficient. Choosing the right tariff is critical to controlling costs.
Should heat pump homes use Economy 7?
It can be beneficial if heating or water systems can operate overnight at lower rates.
Are fixed tariffs better for heat pump homes?
Often yes, especially if you want predictable electricity costs.
Can I remove my gas supply after installing a heat pump?
Yes, if gas is no longer needed — removing it can eliminate standing charges.
Do I need a smart meter for a heat pump tariff?
It is highly recommended, especially for time-of-use tariffs.
How often should I compare energy deals after installing a heat pump?
At least once per year, and after your first full year of real usage data.