Heat pumps, solar and batteries — which setup pays off?
They do different jobs, suit different homes, and the payback on each depends heavily on your electricity tariff. Here's what each one costs in 2026, what it honestly saves, and how the combinations stack up.
Three things worth knowing today
- The heat pump grant just got bigger for off-gas homes. From 21 July 2026, homes in England and Wales not on mains gas get £9,000 off an air source heat pump (everyone else gets £7,500) — until 31 March 2027.
- 0% VAT on heat pumps, solar and batteries ends 31 March 2027. After that, installations revert to 5% VAT — a £500 difference on a £10,000 job.
- Sort the tariff before you judge the payback. A heat pump on a standard tariff roughly breaks even with gas; on a heat pump tariff it clearly wins. A battery without a cheap overnight rate saves half of what it could.
The four numbers behind everything on this page
The first two come live from our price cap tracker (July – September 2026, direct debit, GB average); the others are good achievable rates in today's market. Electricity costs roughly 3.6× what gas does per unit — which is exactly why a heat pump's efficiency, and a battery's timing tricks, matter so much.
Air source heat pumps
A heat pump extracts heat from outside air — even in winter — and moves it into your home. It doesn't make heat so much as relocate it, and that's why it beats every boiler on efficiency.
What it costs in 2026
A typical 3-bed installation runs £11,000–£14,000 before the grant. The Boiler Upgrade Scheme takes £7,500 off in England and Wales — your MCS installer applies and the discount comes off the quote, no paperwork for you — leaving a net cost of roughly £3,500–£6,500. From 21 July 2026 to 31 March 2027, homes not on mains gas get £9,000 instead. In Scotland, Home Energy Scotland: up to £15,000 (£7,500 grant + £7,500 optional loan), +£1,500 rural uplift. See our companion guide to heat pump grants for the full eligibility detail.
Watch the extras: if your radiators are sized for high-temperature gas heating, upgrading them (or adding underfloor heating) can add £3,600–£9,000. A good installer surveys this before quoting — many homes only need a few radiators swapped.
Running costs: the tariff is everything
| Heating setup | Annual running cost | vs gas |
|---|---|---|
| Gas boiler (~13.5k kWh of gas) | ~£992 + £106 gas standing charge | — |
| Heat pump on standard rate (~3290 kWh elec.) | ~£858 | ≈ break even |
| Heat pump on a heat pump tariff (blended ~20p) | ~£657 | saves £250–£450/yr |
Typical 3-bed semi, ~11,500 kWh of heat and hot water a year. Gas boiler at 85% efficiency; heat pump at SCOP 3.5. July – September 2026 cap rates — computed, not copied.
Dedicated tariffs — Octopus Cosy (off-peak windows at ~14.5–15p), EDF Heat Pump Tracker (off-peak ~15p, no peak premium), or the fully variable Octopus Agile — cut heat pump running costs by 20–25%. (OVO's Heat Pump Plus closed to customers in February 2026.) Disconnect gas entirely and you also stop paying the gas standing charge: another £106 a year.
The honest payback framing: the fair comparison usually isn't "heat pump versus nothing" — it's "heat pump versus the replacement boiler you'd otherwise buy" (£2,500–£3,500 installed). If your boiler is on its way out, the extra cost of choosing a heat pump is only £1,500–£3,000 after the grant — paying back in roughly 5–9 years. Ripping out a healthy boiler is a different sum (12–16 years), so plan the switch for when the boiler dies — and get quotes ready before it does, because a mid-winter emergency is how people end up with another gas boiler by default.
Solar panels and home batteries
Solar generates; a battery shifts. Panels save you the full 26p on every unit you use yourself and earn ~15p on every unit you export. A battery makes sure more of your generation is used — and buys cheap overnight electricity even on days with no sun at all.
Solar: what it costs and saves
A typical 4 kWp system (around 10 panels) costs £6,500–£8,500 installed and generates roughly 3,400 kWh a year — more in the south, less in the north. At 40% self-use and a 15p export rate that's about £355 saved on imports plus £306 earned from exports — roughly £661 a year, a payback of 9–13 years against panels that last 25+.
Two things move that number a lot. First, the export tariff: suppliers set their own rates, ranging from under 5p to 15p+ (some installer-linked deals pay more) — shopping around your export rate is one of the highest-value phone calls in personal finance. Second, your roof: south-facing and unshaded is ideal, east–west works fine, heavy shading can undermine the whole case. You'll need an MCS-certified installation to qualify for export payments.
Batteries: what they cost and save
Installed prices run from £5,000–£6,500 for a ~10 kWh system up to £7,000–£8,500 for premium 13.5 kWh units (Alpha ESS Smile G3 (9.6–10.1 kWh) ~£6,250; GivEnergy All-in-One (13.5 kWh) ~£6,800; Tesla Powerwall 3 (13.5 kWh) ~£8,500). Warranties are typically 10 years. On a ~7p overnight tariff, cycling 10 kWh a day through the 19p night/day spread is worth up to ~£628 a year even before solar — a 8–14 year payback depending on what you paid.
The honest caveat: on premium units, the warranty and the payback are uncomfortably close together. The battery case is strongest if you buy at the value end, use a lot of electricity, or pair it with solar, a heat pump or an EV — and weakest if you're a low-usage household paying top price.
Which setup suits your home?
Start from your situation, not from the technology. These four starting points cover most homes.
Start with solar
Simplest install, no changes inside the house, works in any home with a decent roof. Add the battery at the same time if your usage is high — fitting both together is cheaper than retrofitting.
The heat pump jumps the queue
Off-gas heating is expensive, and the new £9,000 grant (until 31 March 2027) is aimed squarely at you. This is the single strongest payback case on this page.
Get quotes now, switch when it dies
The marginal cost over a replacement boiler is small and the payback quick — but only if you're not deciding in a cold house in January. Have the survey done while the boiler still works.
Everything gets better
EV tariffs bring the cheapest overnight rates (~7p), which supercharge both battery savings and heat pump running costs. The car makes the whole-house case stack up faster.
The full setup — solar + battery + heat pump — turns a home into something close to an energy system: solar covers summer hot water and daytime use, the battery shifts everything else to cheap rates, the heat pump replaces gas entirely and kills the gas standing charge. Total outlay after the grant: roughly £16,000–£20,000. Realistic saving versus a gas-heated home on standard rates: £1,150–£1,600 a year — plus a meaningful EPC improvement, which increasingly feeds into mortgage deals and home value.
Investment payback, compared
Simple payback — cost after grants, divided by realistic annual saving — at today's prices and a sensible tariff. Every range assumes the setup is done properly; a bad tariff or a shaded roof pushes you past the top end.
| Setup | Typical cost (2026, after grant) | Realistic annual saving | Simple payback |
|---|---|---|---|
| Heat pump — vs a dying boiler best payback | £1,500–£3,000 extra | ~£250–£450 | 5–9 years |
| Battery only (10–13.5 kWh) | £5,000–£8,500 | ~£450–£650 | 8–14 years |
| Solar only (4 kWp) | £6,500–£8,500 | ~£550–£750 | 9–13 years |
| Full setup (solar + battery + heat pump) | £16,000–£20,000 | ~£1,150–£1,600 | 11–14 years |
| Solar + battery | £11,000–£15,000 | ~£900–£1,100 | 11–15 years |
| Heat pump — vs a healthy boiler | £4,500–£6,500 | ~£250–£450 | 12–16 years |
The five-minute protection checklist
MCS-certified installers only
It's required for both the grant and export payments. Check the MCS register, not just the installer's website badge.
Three quotes, minimum
Prices for identical kit vary by thousands. Be sceptical of door-to-door sellers and of any solar payback under 7 years that doesn't show its assumptions.
Insulation first
A £500 loft top-up saves money at a better rate of return than anything else on this page — and a well-insulated home needs a smaller, cheaper heat pump.
Check the paperwork basics
Most homes don't need planning permission, but listed buildings and flats can. Ask your installer to confirm in writing, and confirm the DNO (grid connection) application is included in the quote.
The questions everyone asks
Do heat pumps work when it's freezing outside?
Yes — there is usable heat in air well below 0°C, and heat pumps keep Scandinavian homes warm at −20°C. Efficiency dips on the coldest days (the SCOP figure is the seasonal average, cold snaps included). What matters far more than the weather is a proper installation: right-sized unit, right-sized radiators, sensible flow temperature.
Do solar panels need direct sunshine?
No — they run on daylight and generate on cloudy days, just less. A UK 4 kWp system still produces roughly 3,400 kWh a year. The bigger factors are orientation (south ideal, east–west fine), shading, and how much of the output you use rather than export.
Is a battery worth it without solar?
Increasingly, yes — this is the bit that surprises people. On a smart tariff you charge the battery overnight at ~7p and run your home on it through the 26p daytime. Cycling 10 kWh a day through that spread is worth up to £628 a year with no panels on the roof. It works best for higher-usage households on the cheapest overnight tariffs.
How do I actually get the £7,500 (or £9,000) grant?
You don't apply — your installer does. Choose an MCS-certified installer, and the Boiler Upgrade Scheme discount comes straight off your quote. You must own the home and be replacing a fossil fuel or electric heating system. The £9,000 rate applies to homes not connected to mains gas in England and Wales, until 31 March 2027.
Will any of this add value to my home?
The evidence points that way: better EPC ratings are increasingly linked to higher sale prices and better mortgage rates ("green mortgages"), and a home with £1,000+ lower running costs is an easier sell. Treat added value as a bonus rather than the core of the case — the running-cost savings are the part you can count on.
Should I wait for prices to fall further?
Waiting has a real cost right now: the £9,000 off-gas grant and 0% VAT both end 31 March 2027, and every year you wait is a year of savings you didn't bank. Kit prices have been drifting down, but not fast enough to outrun those two deadlines for most homes. If your boiler is healthy and your roof is poor, waiting is fine — there's no deadline on doing nothing.
Methodology and sources
Electricity and gas rates come straight from our price cap tracker's data (July – September 2026, direct debit, GB average) — the two pages share one data file, so they can never disagree. Running costs are computed from those rates and the stated assumptions (11,500 kWh heat demand, SCOP 3.5, 3,400 kWh solar generation) — we compute them, we don't copy them. Kit prices, grant amounts, export rates and tariff rates are re-verified monthly against the sources below.
- Ofgem — energy price cap unit rates and standing charges
- GOV.UK — Apply for the Boiler Upgrade Scheme
- Energy Saving Trust — Boiler Upgrade Scheme
- Sunsave — best SEG export rates, ranked
- Cucumber Eco — heat pump tariffs 2026 compared
- GreenMatch — air source heat pump costs 2026
- The Eco Experts — solar panel costs 2026
- The Cost of Solar — Powerwall 3 vs alternatives, July 2026
- Heatable — Alpha ESS Smile G3 review and battery costs
- Heatable — air source heat pump costs (Jul 2026)
- Sunsave — 4kW solar system costs (Aug 2026)
- Sunsave — best heat pump tariffs compared