A heat pump usually cuts running costs against oil, propane and electric heating, and can beat gas when its efficiency (SCOP) is high. This free heat pump cost calculator shows your yearly saving, running cost, electricity use and payback.
Heat Pump Cost Calculator: Savings, Running Cost & Payback
Compare your current heating with an air-source heat pump across the US, UK, EU, Canada and Australia — see your annual saving, running cost, electricity use (kWh), CO₂ cut and payback, with 2026 prices and grants built in.
Pick your country and fuel, enter your heating bill, then press Calculate.
Rough estimate from home size, insulation and climate — prefer your real annual heating spend if you know it.
Typical modern air-source: 3.0–4.0. Colder climates sit lower.
Advanced & assumptions (prices, efficiency)
How the heat pump savings calculator works
Every heat pump estimate comes down to one comparison: what you spend on heat now versus what you would spend running a heat pump for the same amount of heat. This tool does that in energy terms so it works for any fuel and any country.
From your annual heating spend and your fuel price it works out the energy you buy, applies your current system's efficiency to find the useful heat delivered, then divides that heat by the heat pump's seasonal efficiency (SCOP) to find the electricity a heat pump would need. Multiply by your electricity price and you have the heat pump's running cost — the difference is your saving. It estimates the carbon change the same way, comparing your fuel's emissions with your country's grid electricity.
Heat pump running cost = (useful heat ÷ SCOP) × electricity price
where useful heat = (annual spend ÷ fuel price) × current efficiency. Annual saving = current spend − heat pump running cost. Payback = (install cost − grant) ÷ annual saving.
See a worked example — heating oil to a heat pump
- A home spends $1,800 a year on heating oil priced near $0.10 per kWh, so it buys about 18,000 kWh of oil energy (1,800 ÷ 0.10).
- At roughly 85% furnace efficiency, that delivers about 15,300 kWh of useful heat (18,000 × 0.85).
- A heat pump at SCOP 3.5 needs about 4,370 kWh of electricity to make the same heat (15,300 ÷ 3.5) — this is the electricity-use figure.
- At $0.17 per kWh, the heat pump costs about $743 a year to run (4,370 × 0.17).
- The saving is about $1,057 a year ($1,800 − $743). On a $14,000 install with no 2026 federal credit, simple payback is roughly 13 years — a state or utility rebate shortens it.
Swap the fuel to cheap natural gas and the same steps show a far smaller gap, sometimes close to break-even — which is exactly why the fuel you replace matters more than the heat pump itself.
The reason the same heat pump can save a fortune for one home and little for another is the price of the fuel it replaces. Electricity typically costs around 3.5 times more than natural gas per kWh in the US, UK and Germany, so beating gas needs a high SCOP — but against heating oil, propane or electric resistance heating, a heat pump wins comfortably.
2026 grants and running-cost reality by country
- 🇺🇸 United States — the federal 25C heat-pump tax credit (30%, up to $2,000) ended 31 December 2025, so 2026 installs get $0 federal; only state and utility rebates remain. Heat pumps win big against propane, oil and electric resistance, and are roughly break-even against cheap natural gas.
- 🇬🇧 United Kingdom — the Boiler Upgrade Scheme pays £7,500 (or £9,000 for off-gas-grid homes leaving oil/LPG from 21 July 2026), plus 0% VAT, running to 2028. With electricity near 26p and gas near 7p per kWh, a high SCOP is what makes a heat pump cheaper than a gas boiler.
- 🇪🇺 Germany / EU — the BEG / KfW subsidy covers up to 70% of eligible cost (base 30% plus climate-speed, income and efficiency bonuses), on a cost cap of about €28k from 21 July 2026. The "65% renewable heating" rule is pushing adoption hard.
- 🇨🇦 Canada — the Greener Homes Grant closed in January 2026; the interest-free Greener Homes Loan (up to $40,000) and the Oil-to-Heat-Pump Affordability program continue in some provinces. Savings are huge against heating oil and electric baseboards, especially in the Maritimes.
- 🇦🇺 Australia — most named "heat pump rebates" are for hot water; space heating is a reverse-cycle air conditioner supported through schemes like the Victorian Energy Upgrades. With gas now expensive, running costs favour the heat pump — and pairing it with rooftop solar cuts them further.
What people ask in each country
Search patterns differ by market, and this tool is built to answer all of them: in the UK and Germany the question is "will my running cost really drop versus gas, and can I claim the grant?"; in the US it is "is it still worth it now the tax credit's gone, especially versus propane or oil?"; in Canada it is "how does it perform at −25 °C and what's left after the grant closures?"; and in Australia it is "how does it compare with expensive gas ducted heating, and should I add solar?". Set your country and the defaults, grant and carbon figures switch to match.
Switching from oil or propane to a heat pump
If you heat with heating oil or propane, this is where a heat pump pays off hardest among fossil fuels. Both cost far more per unit of heat than natural gas, so replacing them with a heat pump running at a SCOP of 3 or more usually cuts running costs sharply and pays back faster.
Put your real numbers in above and the comparison table shows it plainly: for the same heat, oil and propane sit near the top of the cost list while the heat pump sits at the bottom. A typical oil- or propane-heated home replacing an $1,800–$3,600 annual bill often saves $1,000 or more a year — usually more than the same switch would save a gas household, because oil and propane are the priciest fossil fuels per kilowatt-hour of heat.
Two things make the oil-to-heat-pump and propane-to-heat-pump case stronger still: many regions offer a larger grant for homes leaving oil or LPG off the gas grid (the UK, for instance, pays more for off-gas-grid oil replacements), and you also escape the delivery charges, tank rental and winter price spikes that come with bottled and delivered fuel. Set your fuel to oil or propane above, enter your bill, and press Calculate to see your own number.
How much electricity does a heat pump use?
This is the question people ask most, and the calculator answers it directly: the kWh electricity used / year tile is the heat pump's own consumption. The maths is simple — take the useful heat your home needs and divide by the heat pump's SCOP. A home needing 12,000 kWh of heat at a SCOP of 3.5 uses about 3,430 kWh of electricity a year, because each unit of power moves roughly three-and-a-half units of heat.
In terms of watts, a typical domestic air-source heat pump draws about 1–5 kW while running (bigger homes and colder weather sit higher), but it modulates rather than running flat out, so the annual kWh figure is the honest number for budgeting, not the peak wattage. Compared with a 3 kW plug-in electric heater, a heat pump delivers the same warmth for a fraction of the electricity — that is the whole point of its efficiency.
Are heat pumps worth it?
“Worth it” comes down to three things this tool measures for you: the running-cost saving, the payback after any grant, and the carbon cut. As a rule of thumb, a heat pump is clearly worth it when you are replacing heating oil, propane or electric resistance heating — the running-cost drop is large and payback is often under a decade with a grant. Against cheap natural gas the running-cost case is tighter and rests on a high SCOP, though the carbon and comfort benefits still stand. Change the inputs and the verdict box updates so you can see exactly where your own numbers land.
Heat pump vs gas, oil, propane and electric heat
The calculator handles every common fuel, because the answer differs for each. Against a gas furnace or boiler the heat pump must overcome cheap gas, so it wins on running cost only with a good SCOP. Against heating oil and propane, which are expensive per unit of heat, a heat pump usually wins comfortably. And against electric resistance heating — baseboards or an electric furnace — a heat pump is dramatically cheaper, because it delivers three to four units of heat per unit of electricity where resistance heating gives only one. Set your current fuel and the numbers make the comparison for you.
Do heat pumps work in winter and cold climates?
Yes. Modern cold-climate air-source heat pumps keep working well below freezing and are standard across Canada, Scandinavia and the northern US. Their efficiency does dip in the coldest snaps, which is why the tool lets you set a realistic SCOP — a well-designed cold-climate system might average a SCOP near 3, while a mild-climate install can exceed 4. Set yours to match your winters for the sharpest running-cost estimate.
How does a heat pump work in winter? Even freezing air still holds usable heat. A very cold refrigerant inside the unit boils and absorbs that heat from the outside air, then a compressor squeezes the vapour to raise its temperature before releasing it indoors. That is why a cold-climate model can still deliver two to three units of heat for every unit of electricity on a frosty day, and keeps running well below −15 °C — efficiency simply eases off in the very coldest spells.
More than heating: cooling, air quality and the right system
A heat pump is not only a heater. Because it moves heat instead of burning fuel, it can run in reverse in summer to cool your home — one unit replaces both a furnace and an air conditioner. On the heating side it typically delivers around three units of heat for every unit of electricity, and in cooling mode it is usually more efficient than an older standalone air conditioner, so a single upgrade works the whole year round.
Most systems also filter the air as they circulate it, catching dust, pollen and other particles, which many households notice as fresher indoor air. None of that changes the running-cost maths above, but it is part of why people rate the switch highly once it is in.
Ducted or ductless (mini-split)?
There are two common layouts. A ducted heat pump feeds warm or cool air through the ductwork you may already have from a forced-air furnace, heating the whole home from one system. A ductless mini-split uses one outdoor unit linked to one or more wall or ceiling heads, letting you set each room separately — ideal for homes with baseboard heating, extensions, converted attics or basements, or anywhere without ducts. If your furnace and air conditioner are both near the end of their life, replacing them together with a heat pump usually makes the most financial sense.
Sizing and insulation still matter
This estimate assumes a properly sized and installed heat pump. An oversized unit short-cycles and an undersized one struggles in the cold, so a heat-loss survey from a qualified installer is worth doing. Tightening up insulation and draughts first lowers the heat your home needs, which shrinks both the system size and its running cost — the cheapest kilowatt-hour is the one you never have to buy.
Key terms
| Term | What it means |
|---|---|
| SCOP | Seasonal Coefficient of Performance — heat delivered per unit of electricity across a whole heating season. |
| COP | The same efficiency ratio at a single moment or temperature. |
| Heating degree days | A measure of how cold and how long your heating season is — higher means more heat needed. |
| ASHP | Air-source heat pump — draws heat from outside air; the most common and lowest-cost type. |
| Useful heat | The heat actually delivered into your home, after your current system's losses. |
| Grid carbon intensity | Kilograms of CO₂ per kWh of grid electricity — decides how much carbon a heat pump saves. |
Sources & methodology
The calculator converts your annual heating spend into useful heat using your fuel price and system efficiency, then divides by the heat pump's SCOP to find its electricity use and running cost; carbon is compared using your country's grid intensity versus your fuel's emission factor. Default prices, grants and carbon figures are 2026 national values and are fully editable, because rates vary by state, province and tariff.
Sources: US electricity, gas & fuel prices — U.S. Energy Information Administration (EIA); grid carbon — EPA eGRID; US federal credit change — IRS / One Big Beautiful Bill Act. UK prices — Ofgem price cap; grid carbon — UK DESNZ 2026 factors; Boiler Upgrade Scheme — GOV.UK / Ofgem. Germany prices — BDEW; grid carbon — Umweltbundesamt; BEG subsidy — KfW / BAFA. Canada prices & carbon — Natural Resources Canada / ECCC. Australia prices — AER / Victorian Default Offer; grid carbon — DCCEEW National Greenhouse Accounts. Emission and efficiency constants reflect widely published standard values.
SCOP: why the efficiency you assume decides everything
Every running-cost, payback and carbon figure this calculator produces rests on a single input: the heat pump's SCOP, its seasonal coefficient of performance. SCOP is the number of units of heat the pump delivers for each unit of electricity it draws, averaged across a whole heating season. It is easy to confuse with COP, but they are not the same. COP is a snapshot taken at one set of conditions, often a mild test point where a heat pump looks its best; SCOP blends the easy autumn days with the hard, cold ones into a single season-long average. For a yearly bill, SCOP is the honest figure — and because everything downstream divides your heat demand by it, a small change moves the result a long way.
What lifts the seasonal figure is mostly about how the system is designed and run, not the badge on the box. The single biggest lever is flow temperature — the temperature of the water the pump sends to your radiators or floor. The cooler it can run while still keeping you warm, the more efficient it is, which is why large radiators or underfloor heating, good insulation and weather-compensation controls all raise SCOP. Working against it are high flow temperatures forced by small, undersized radiators, an oversized unit that short-cycles, poor commissioning and, of course, genuinely severe cold. Two homes with identical hardware can post very different seasonal figures purely because of how the system was specified and set up.
Because the number matters so much, it is worth choosing it with care rather than accepting an optimistic default. Ask your installer for the design SCOP at the flow temperature your home will actually use, not the best-case laboratory figure, and if you are unsure, lean conservative. Then do what a single estimate cannot: run the calculator across a range — a cautious value and a hopeful one — and see how far the yearly cost and payback move between them. If the case still holds at the lower SCOP, it is a robust decision; if it only works at the top of the range, you know exactly which assumption to pin down before committing. Testing the spread beats trusting one number.
- Raises SCOP — low flow temperature, big radiators or underfloor, good insulation, weather compensation.
- Lowers SCOP — high flow temperature, an oversized unit, severe cold, poor commissioning.
- Best practice — test a cautious and a hopeful value, not one optimistic default.
Frequently asked questions
How much can a heat pump save me?
It depends most on the fuel you replace. Savings are large against heating oil, propane and electric resistance heating, but can be modest against cheap natural gas, because electricity typically costs about 3.5 times more than gas per unit of energy. This calculator uses your own bill and local prices to show your specific number.
How much can I save switching from heating oil to a heat pump?
It is usually one of the biggest heating savings available. Because heating oil is expensive per unit of heat, a typical home replacing an $1,800 to $3,600 oil bill often saves around $1,000 or more a year with a heat pump at a SCOP of 3 or higher, plus you drop delivery fees and tank rental. Enter your oil bill above and press Calculate for your own figure.
Is a heat pump cheaper to run than propane?
Almost always. Propane is one of the most expensive ways to heat per kilowatt-hour, so a heat pump running at a SCOP of 3 to 4 typically cuts propane running costs substantially and can also remove tank rental and delivery charges. Set the fuel to propane above and press Calculate to see your exact saving.
How much electricity does a heat pump use?
Roughly your home's annual heat demand divided by the heat pump's SCOP. For a typical home needing about 12,000 kWh of heat at a SCOP of 3.5, that is around 3,400 kWh of electricity a year. The calculator shows your own figure in the kWh tile, based on your heating bill and efficiency.
Do heat pumps use a lot of electricity?
Far less than electric resistance heating for the same warmth, because a SCOP of 3 to 4 means each unit of electricity delivers 3 to 4 units of heat. A unit draws about 1 to 5 kW while running but modulates, so the yearly kWh figure is the honest number to budget with.
Is a heat pump electric or gas?
An air-source heat pump runs entirely on electricity, with no gas burner. It moves heat from the outside air rather than burning fuel, which is why it can deliver several times more heat energy than the electricity it consumes.
Does a heat pump replace a furnace?
Yes. A heat pump can fully replace a gas, oil or electric furnace and provides both heating and, in reverse, cooling. In very cold regions some homes keep a small backup for extreme days, but a modern cold-climate unit handles most winters on its own.
Does a heat pump cool as well as heat?
Yes. In summer a heat pump runs in reverse to cool your home, so one unit replaces both a furnace and an air conditioner. In cooling mode it is usually more efficient than an older standalone AC, which is part of why the switch can pay off across the whole year.
Should I get a ducted or ductless heat pump?
A ducted heat pump uses existing forced-air ductwork to heat the whole home from one system, while a ductless mini-split links an outdoor unit to one or more room heads and suits homes with baseboard heating, extensions or no ducts. A qualified installer can advise which layout fits your home and budget.
Does insulation affect heat pump savings?
Yes, significantly. Better insulation and fewer draughts lower the heat your home needs, so the heat pump uses less electricity and can be a smaller, cheaper system to run. Improving insulation before or alongside the switch is one of the most cost-effective steps you can take.
Are heat pumps worth it?
It depends on the fuel you replace and the grant you get. Replacing oil, propane or electric resistance heating usually pays back well and cuts bills sharply; against cheap natural gas the case is tighter and depends on a high SCOP. This calculator gives you a personal verdict from your own saving and payback.
Is there still a US federal heat pump tax credit in 2026?
No. The federal 25C heat pump tax credit (30%, up to $2,000) ended on 31 December 2025, so systems installed in 2026 receive no federal credit. Only state and utility rebates remain, and they vary widely, so the US grant field defaults to $0 — add any local rebate you qualify for.
What heat pump grant can I get in the UK?
The Boiler Upgrade Scheme (BUS) gives £7,500 towards an air-source or ground-source heat pump in England and Wales, and £9,000 for off-gas-grid homes replacing oil or LPG from 21 July 2026, with the scheme running to 2028. Heat pump installations also carry 0% VAT.
Why are my savings versus a gas boiler small?
In the UK, Germany and much of the US, household electricity costs roughly 3.5 times more than natural gas per kWh. A heat pump only beats gas on running cost if its seasonal efficiency (SCOP) is high enough to overcome that price gap — which is why a well-designed system aiming for SCOP 3.5 or higher matters.
What is SCOP or COP?
COP (coefficient of performance) is how many units of heat a heat pump delivers per unit of electricity it uses; SCOP is that figure averaged across a whole heating season. A SCOP of 3.5 means the heat pump produces 3.5 kWh of heat for every 1 kWh of electricity, which is why it can beat resistance heaters and often fossil fuels.
Do heat pumps work in cold climates?
Yes. Modern cold-climate air-source heat pumps keep a COP at or above 2 well below freezing and are used across Canada and Scandinavia. Efficiency does fall in extreme cold, which is why the calculator lets you set a realistic SCOP for your region.
How does a heat pump work in winter?
Even freezing air still holds heat. A very cold refrigerant inside the unit absorbs heat from the outside air, then a compressor raises its temperature before releasing it indoors. Cold-climate models keep doing this well below −15 °C, delivering two to three units of heat per unit of electricity even on frosty days, though efficiency dips in extreme cold.
Is a mini-split the same as a heat pump?
A ductless mini-split is a type of heat pump; the difference is only how it delivers heat. A mini-split uses wall or ceiling heads instead of ducts, so “mini-split vs heat pump” really means ductless versus ducted. Both move heat the same efficient way, so the savings shown here apply to either.
What about Canada and Australia rebates?
In Canada the Greener Homes Grant closed in January 2026, though the interest-free Greener Homes Loan and the Oil-to-Heat-Pump Affordability program continue in some provinces — check your province. In Australia most named heat pump rebates target hot-water systems, while space heating (a reverse-cycle air conditioner) is supported through schemes such as the Victorian Energy Upgrades — verify your state.
Will a heat pump cut my carbon emissions?
Usually yes, and often dramatically on cleaner grids such as the UK, France or hydro-rich Canadian provinces. The cut is smaller on coal-heavy grids like some Australian states. The calculator estimates the change using your country's grid carbon intensity versus the emissions of your current fuel.
How accurate is this heat pump calculator?
It is a good planning estimate built from your own annual heating spend and editable local prices, using standard efficiency math. Real results vary with your home, installer and tariff, so always get quotes and a proper heat-loss survey before deciding.