British Gas launches UK’s lowest heat pump rate to drive take-up

17 May 2024

3 Minutes

Sustainability

Media Relations

The new heat pump rate aims to encourage the installation of heat pumps throughout the UK by making the low carbon technology more affordable.
Households could save up to £450[i] by switching to a heat pump, making use of the new rate and capping their gas meter.

British Gas has launched the UK’s lowest heat pump rate^[ii], to make low carbon technology more affordable and encourage heat pump uptake.

The new energy offering is available to all British Gas energy customers that purchase any air source heat pump from British Gas and aims to help drive the adoption of heat pumps in the country.

British Gas is providing a unit rate of just 14p/kWh for the electricity used to run the heat pump for the first year. Households could save up to £450 for one year by switching to a heat pump, making use of the new rate and capping their gas meter, compared to heating a home with a D-rated gas boiler. The savings from the new rate will automatically be credited to customers’ energy bills each month.

The move tackles the ongoing running costs of heat pumps making them a more affordable option for home heating and cutting carbon emissions. British Gas also offers a range of payment options including two years interest free credit.^[iii].

It follows British Gas’ latest research^[iv] which showed that 60% of UK homeowners say they are considering installing a heat pump.

According to the research, reducing energy bills is homeowners’ biggest priority when it comes to their home heating. Cheaper heat pump tariffs will help to convince nearly four in 10 (37%) homeowners to adopt a heat pump in the future.

“There is a clear desire amongst UK homeowners to cut their energy bills and act more sustainably, but we need to make low carbon products more affordable."

Gail Parker, Low Carbon Homes Director at British Gas

Gail Parker, Low Carbon Homes Director at British Gas, said: “There is a clear desire amongst UK homeowners to cut their energy bills and act more sustainably, but we need to make low carbon products more affordable.

“We are launching the UK’s lowest heat pump rate to lower running costs as we know this is the single most important factor in households’ choice of home heating system. Our new leading heat pump offer aims to provide a bigger financial incentive to make the switch to electric – helping to decarbonise home heating and making headway towards the Government’s heat pump target.”

Lord Callanan, Minister for Energy Efficiency and Green Finance, said: “Our Boiler Upgrade Scheme is one of the most generous of its kind in Europe and is helping households make the switch to cleaner, more energy efficient heating.

“Demand for heat pumps is on the rise with the latest figures showing applications are up 46% compared with the same month last year. This competitive new tariff from British Gas will see families save up to £450 on their energy bills, all while cutting emissions.”

British Gas and sister company Hive are also looking to make heat pumps simpler to understand. Smart home expert, Hive, and heat pump manufacturer, Daikin, have recently announced that they will be integrating heat pumps into the Hive smart home technology with trials due to begin later this year.

For more information, visit: https://www.britishgas.co.uk/home-services/boilers-and-heating/air-source-heat-pumps.html

Notes to editors

Heat pump owner case study available upon request.

[i] Up to £450 save claim, covers three areas:

Up to £269 energy saving: Based on medium household consumption (11,500 kwh annual usage) and no gas used for cooking vs SVT price cap (April 2024).
Up to £67 saving compares customer with D rated boiler (yearly energy usage: Gas 11,500kWh, Electricity 2,700 kWh; no gas used for cooking) to customer with air source heat pump (SCOP 350%; yearly household electricity usage of 5,263 kWh; yearly heat pump electricity usage of 2,563 kWh; no longer uses gas). Both customers paying UK average April 24 direct debit price cap rates.
Up to £115 Standard charge saving: 95% of our installations make the property gas free. On average, a £115 annual saving is possible by capping a gas meter, removing the standing charge.

Heat pump energy offer terms:

Heat Pump energy offer only available on installations purchased before 31st September 2024. Discounted rate of 14p per kWh for heat pump consumption applies for 12 months. Discount excludes standing charge. Discount applied to next bill as a credit. Must be new energy platform, direct debit customer. Electricity account must be registered at the same address as your heat pump installation. Smart meter required.

[ii] Based on electricity prices as of 16/05/2024 and current live rates in the market. British Gas is the current lowest ‘type of use’ all day heat pump rate.  

[iii] British Gas acts as a credit broker, not the lender and offers products from a panel of lenders. Payment options are subject to change without notice. British Gas is a trading name of British Gas New Heating Limited (No. 06723244), an appointed representative of British Gas Services Limited (No. 03141243) which is authorised and regulated by the Financial Conduct Authority (Financial Services Register No. 490568). Both companies registered in England and Wales. Registered office: Millstream, Maidenhead Road, Windsor, Berkshire SL4 5GD. Availability of credit depends on status and credit checks. Terms and Exclusions apply.

[iv] Research of 2,000 UK homeowners conducted by Censuswide in March 2024 on behalf of British Gas.