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Not necessarily. A well-run heat network can provide heat at a cost close to, or below, a gas alternative, while a poorly designed or privately operated network can be expensive. An individual heat pump may reduce running costs in a well-insulated home on a suitable electricity tariff, but its installation usually costs far more than replacing a gas boiler. The only reliable answer for a particular property is a whole-life comparison that includes installation or connection charges, standing charges, maintenance, energy use, grants, financing and future component replacement.
What you are actually comparing
The three options deliver heat in different ways, so comparing only the advertised pence-per-kilowatt-hour figure can produce the wrong result.
- Heat network: A central energy centre produces hot water (or, in some systems, steam) and distributes it through insulated pipes to buildings. Your bill may contain a heat unit rate, a standing charge, metering or billing fee, and a connection or infrastructure charge.
- Individual heat pump: An air-source or ground-source unit moves heat from outside into your home. Electricity powers the compressor. The amount of useful heat per kilowatt-hour of electricity depends on the system’s seasonal performance, flow temperature, controls and the building’s insulation and emitters.
- Gas boiler: A boiler burns gas in the property. A replacement is often a like-for-like project, but the bill also reflects the gas tariff, standing charge, boiler efficiency and servicing.
For a fair comparison, calculate the cost of delivered heat over the same period. Include the capital needed to make the system work, not just the fuel.
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What the available UK evidence shows
There is no single UK-wide price ranking for 2026. The figures available were produced under different dates and assumptions, and none is a common, current, whole-life comparison of one representative heat network, heat pump and gas boiler.
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Heat networks can be competitive, but performance varies
In its 2018 heat-networks market study, the Competition and Markets Authority (CMA) concluded that, for many customers, networks appeared to offer heat and hot water at prices “close to or lower than those of other potential sources of supply (such as gas or electricity)” with comparable service standards. That is an industry-level finding, not a guarantee for every development.
The CMA cited Association for Decentralised Energy figures showing at least 14,000 UK heat networks, about 492,000 connections and approximately 446,517 domestic customers in 2018. Networks differ greatly in age, heat source, pipe losses, ownership and billing arrangements. A modern, efficient system serving many homes can spread plant costs; a small system with high losses and a monopoly operator can impose high fixed charges.
The Climate Change Committee, as cited by the CMA in 2018, estimated that around 18% of UK heat would need to come from heat networks by 2050 for carbon targets to be met cost-effectively. That policy role does not establish what an individual customer will pay today.
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Heat pumps have high capital cost and variable running cost
The National Audit Office reported an average heat-pump installation cost of £11,287 in 2023, expressed in 2021 prices. The Boiler Upgrade Scheme grant rose to £7,500 in October 2023 and, using those 2023 costs, covered nearly 60% of the average installation. The grant is a one-time contribution, not an annual bill subsidy; eligibility and current availability must be checked before relying on it.
The House of Commons Committee of Public Accounts wrote in its 2024 report summary that an average heat pump was then four times more expensive than a gas boiler and that electricity prices meant heat pumps could be more expensive to run. That statement describes the market conditions considered in the report, not a universal lifetime outcome. Installation quotes, electricity tariffs and system efficiency have a major effect.
Gas is a useful comparator, not a guaranteed cheapest option
A gas boiler generally has the lowest initial cost when replacing an existing boiler because the distribution pipework, radiators and hot-water arrangement may already be suitable. Its future cost is exposed to gas prices, standing charges, boiler servicing and eventual replacement. A gas comparison should use the boiler’s delivered efficiency and the home’s actual heat demand rather than assuming every unit of gas becomes useful room heat.
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Running-cost figures and why they disagree
Two official examples illustrate the range rather than settle the question.
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| Period and basis | Heat network | Gas | What the figure means |
|---|---|---|---|
| April–June 2023; 7,000 kWh heat comparison | £861 | £861 | DESNZ written-answer estimate, annualised fuel cost only |
| October 2022–March 2023; 7,000 kWh heat comparison | £1,037 | £861 | DESNZ estimate, annualised fuel cost only |
| March–September 2022; 7,000 kWh heat comparison | £968 | £585 | DESNZ estimate, annualised fuel cost only |
These are support-period estimates from a 2023 written answer, not current tariffs and not complete household bills. They exclude the property-specific capital, maintenance, standing-charge and replacement differences that can change the ranking.
For a different illustration, a DESNZ Clean Energy Campaign model for a well-insulated three-bedroom detached house estimated about £2,000 per year for gas and £1,900 for a heat pump. The modelling used prices and tariff assumptions from July 2023 to July 2024. The £100 difference is a modelled result for that house, not a promised saving. DESNZ says actual savings depend on the energy tariff, when and how much you heat, the home’s size and insulation, and the type of heat pump.
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How to calculate the cost for your property
Use one horizon—10, 15 or 20 years—and put every material cost in the same spreadsheet. A shorter horizon can make a high-capital option look unattractive even if its operating cost is lower; a longer horizon increases exposure to repairs, replacements and tariff changes.
- Establish heat demand. Use recent gas or heat-network consumption, corrected for unusual weather where possible. Separate space heating from hot water if your bills or meter data allow it. Do not substitute the home’s floor area for actual demand without checking the result.
- Price the installed system. For a heat pump, obtain a detailed quote covering the outdoor unit, cylinder, controls, electrical work, planning or ground works where relevant, and any radiator or underfloor-heating changes. For a boiler, include flue, condensate, controls and removal. For a network, ask for the connection fee, heat interface unit, meter, building works and any amount collected through a service charge.
- Apply grants and financing. Subtract an eligible Boiler Upgrade Scheme grant from the heat-pump capital cost only after confirming the installer, property and technology meet current rules. Record interest, loan fees or staged payments rather than treating borrowed money as free capital.
- Convert energy to useful heat. A heat-pump estimate should divide required heat by its seasonal coefficient of performance (the average useful heat delivered per unit of electricity) and then apply the actual electricity tariff. A boiler estimate should account for seasonal efficiency before applying the gas tariff. A network estimate should start with the billed heat unit rate and add standing, metering and other fixed charges; ask whether the quoted heat already includes network losses.
- Add fixed and service costs. Include electricity or gas standing charges attributable to the heating option, heat-network standing or infrastructure charges, annual servicing, insurance, water-treatment requirements, meter fees and repair allowances.
- Model replacements. Put likely replacement dates and costs for a boiler, heat-pump compressor or controls, hot-water cylinder, pumps and network interface equipment into the horizon. Use a range when a supplier cannot provide a firm life estimate.
- Test scenarios. Run at least low, central and high energy-price cases, and test a colder winter, a higher heat-pump flow temperature and a network tariff increase. Smart or time-of-use electricity tariffs can improve a heat pump’s result only if the home can shift some consumption without reducing comfort.
- Compare the total and the risk. Show total undiscounted cost and, if you are comfortable doing so, a discounted present value. Record which assumptions are contractual and which are estimates. The cheapest central estimate may not be the best choice if a large part of its cost is controlled by an opaque monopoly tariff.
When each option is most likely to make financial sense
An existing gas-heated home with a working boiler
Replacing a functioning boiler with a heat pump can take a long time to recover the additional capital, even after a grant. The case becomes stronger when the boiler is near the end of its life, the home is well insulated, emitters can deliver heat at a lower flow temperature, and a suitable electricity tariff is available. Calculate the avoided boiler replacement as part of the comparison; otherwise the heat pump is unfairly charged with its full capital while the alternative is treated as free.
A new development or dense apartment block
A network can centralise plant, maintenance and heat-source upgrades and avoid a separate boiler or heat pump in every dwelling. The commercial result depends on how connection costs are allocated, the efficiency of the distribution system and the operator’s fixed charges. Before buying or renting, request the charging schedule, historic bills for a similar dwelling and the arrangements for outages and repairs.
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A well-insulated home with a flexible electricity tariff
This is the clearest route to lower heat-pump running costs. Insulation reduces the heat required; larger radiators or underfloor emitters can allow a lower flow temperature; and a tariff with cheaper periods can reduce electricity cost. The system still needs correct sizing, commissioning and controls. A high electricity unit rate or poor seasonal performance can erase the advantage.
A privately operated or opaque heat network
Do not infer affordability from a low headline heat rate. Ask for at least 12 months of bills for a comparable home and request a complete schedule showing the heat rate, standing charge, metering, maintenance, connection or infrastructure payment, VAT treatment and how prices are changed. Ask how often outages occurred, how long repairs took and whether residents can challenge bills. A network with no supplier choice deserves a larger risk allowance in your model.
Technical factors that change the result
- Insulation and ventilation: Drafts, uninsulated roofs or walls and uncontrolled ventilation increase heat demand for every option, but they are particularly damaging to a heat pump’s economics because more electricity is needed for the same comfort.
- Emitter temperature: Heat pumps are most efficient when radiators or underfloor systems can heat rooms at lower water temperatures. Small radiators designed for a high-temperature boiler may require upgrades.
- Hot water: Cylinder size, legionella cycles and simultaneous bathing demand affect heat-pump electricity use and may require an immersion heater. Network and boiler systems may provide hot water differently, so compare the actual service rather than assuming identical convenience.
- Network losses: Buried distribution pipes and plant consume energy before it reaches the dwelling. Poor insulation, oversized plant or low utilisation can raise both the operator’s cost and the customer’s tariff.
- Controls and commissioning: Weather compensation, correct hydraulic balancing, meter configuration and user settings influence delivered heat. A theoretical coefficient of performance is not a guarantee of the installed system’s seasonal result.
- Space and electrical capacity: A heat pump may need an outdoor location, a hot-water cylinder and electrical upgrades. Apartment networks may avoid that work inside each dwelling but impose building-level equipment and access requirements.
Consumer protection and contract checks
Historically, heat-network customers often had weaker protections than gas and electricity customers and could not switch supplier. Check the protections that apply to your network now, including the current Ofgem framework, before signing a lease, purchase contract or connection agreement.
Do these 3 things before closing this tab:
1Clear out junk files and repair common Windows errors2Fix the driver behind crashes, sound loss and screen glitches3Repair Windows errors before they cause bigger problems- Confirm who owns the pipes, heat interface unit and meter, and who pays when each fails.
- Read the tariff formula: identify indexation, review dates, caps, pass-through fuel costs and any minimum charge.
- Check billing frequency, estimated-meter rules, dispute procedures and access to consumption data.
- Get the promised indoor temperature, hot-water availability and outage compensation in writing where possible.
- Ask whether you can disconnect, install another system or transfer the obligation when you sell or let the property.
A decision checklist
A comparison is ready for a buying decision only when you can answer these questions with documents rather than assumptions:
- What is the home’s measured annual heat demand and hot-water demand?
- What is the total installed or connection price after confirmed grants?
- What standing, service, maintenance and infrastructure charges apply each year?
- Which tariff and seasonal-performance assumptions produce the annual energy figure?
- What equipment must be replaced during the chosen ownership period?
- Who controls prices, repairs and access to the system, and what happens during an outage?
- How does the result change under higher energy prices, lower heat-pump performance or a network tariff increase?
If a quote does not provide these inputs, treat the missing amount as an uncertainty to resolve, not as zero. A property-specific spreadsheet using the same horizon and assumptions for all three options is more informative than a generic claim that one technology is always cheapest.
Quick Recap
Product prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on Amazon at the time of purchase will apply.

