Best Electricity Tariffs for Heat Pumps (UK)
The right tariff can cut a heat pump's running cost without changing anything about the heat pump itself.
Time-of-use tariffs built for heat pumps, such as Octopus Cosy, offer off-peak rates around 14.5p/kWh against a peak rate near 51.7p/kWh, compared with a flat 26.11p/kWh on the standard variable Ofgem price cap (Jul-Sep 2026)1. They only save money if you can shift a large share of heating to the cheap window, which needs a smart meter, a schedulable controller and usually a decent-sized hot water tank.
How heat pump tariffs work
Time-of-use tariffs charge different rates through the day. Cheap windows usually fall overnight and sometimes in the early afternoon, when grid demand is lower; a peak window in the early evening (typically 4pm-7pm) costs more than the standard rate. Heat pumps can pre-heat a home and hot water tank during the cheap window, then coast through the expensive peak. This needs a smart meter and a heat pump controller that can run on a schedule, which most modern systems support.
Current UK tariff rates (Jul 2026)
| Tariff | Off-peak rate | Peak / day rate | Notes |
|---|---|---|---|
| Octopus Cosy | ~14.5p/kWh (4-7am, 1-4pm, 10pm-midnight) | ~51.7p/kWh (4-7pm peak); ~33p/kWh rest of day | Best for homes that can store heat through the afternoon window too |
| Economy 7 | ~12.5-14.5p/kWh (7hr night window) | ~28-34p/kWh (day) | Rates vary more by supplier than Cosy; check your own quote |
| Standard variable (price cap) | 26.11p/kWh (flat rate, Direct Debit) | Simplest option if you cannot reliably shift usage | |
Unit rates, pence per kWh, Direct Debit. Standard variable is the Ofgem price cap for 1 Jul-30 Sep 2026. Economy 7 and Octopus Cosy rates are indicative averages and vary by supplier, region and quarter.
Will you save money?
Savings depend on how much heating you can shift off-peak. A well-insulated home with a 200 litre or larger hot water tank can pre-heat overnight and stay warm well into the day. A poorly insulated home that loses heat quickly needs continuous heating, including through the expensive peak window, which shrinks or reverses the benefit. As a rule of thumb: the bigger the gap between peak and off-peak rates, the more of your usage you need to shift before a time-of-use tariff beats a flat rate.
What you need
- Smart meter: required for all time-of-use tariffs; it records consumption in half-hourly blocks.
- Heat pump controller: must support scheduled heating. Most heat pumps installed since 2020 do.
- Hot water tank: 200 litres or more stores heat generated during the cheap window.
- Decent insulation: a home that loses heat slowly stays warm through the peak window without topping up.
- Octopus Cosy off-peak
- ~14.5p/kWh
- Octopus Cosy peak
- ~51.7p/kWh
- Standard variable rate
- 26.11p/kWh
Frequently asked questions
Will a time-of-use tariff save me money?
Only if you can shift a meaningful share of heating to the cheap window. Well-insulated homes with a large hot water tank can pre-heat overnight; poorly insulated homes that need continuous heating see a smaller benefit or can end up worse off.
Do I need a smart meter for a heat pump tariff?
Yes. Time-of-use tariffs such as Octopus Cosy and Economy 7 require a smart meter that can record consumption in half-hourly periods.
How often do tariff rates change?
The Ofgem price cap that sets the ceiling for standard variable tariffs updates every quarter. Supplier-specific time-of-use rates can change more often, so check your supplier's current price list before switching.
Related guides
Sources
- Ofgem, Changes to the energy price cap between 1 July and 30 September 2026, accessed 3 Jul 2026
- Octopus Energy, Cosy Octopus tariff rates, accessed 3 Jul 2026
- EnergyPlus, Cheapest Economy 7 tariff rates UK, accessed 3 Jul 2026
- Energy Saving Trust, Time of use tariffs for heat pumps, accessed 3 Jul 2026
Calculate your costs: Use the heat pump cost calculator to compare tariffs for your home.
Last reviewed: 3 July 2026. Tariff rates change quarterly and by supplier; treat the figures above as indicative.