Blog - Ofgem’s April Price Cap Update: What Does It Mean For Heat Pumps?
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From 1st April 2026, Ofgem’s adjusted energy price cap will come into effect for both gas and electricity. These changes could have a real impact on household heating costs. While both see reductions in unit costs, the scale of change favours electricity and, by extension, heat pumps!
Narrowing the Cost Gap
The price cap update sees gas unit rates fall by 3.2% and standing charges by 17.1%, while electricity unit rates drop 10.9% with a modest 4.5% increase in standing charges.
Although gas remains cheaper per unit, electricity’s larger percentage reduction narrows the cost gap, making heat pumps increasingly more competitive compared to gas boilers, especially in well-insulated homes or new-build properties.
Understanding the Spark Gap
The Spark gap is the price difference per kWh between electricity and gas, indicating how it impacts the cost of running a heat pump.
For example:
A Samsung 8kW heat pump, operating at 45°C Flow rate, has a Seasonal Coefficient of Performance (SCoP) of 4.04*. Therefore, for every 1kWh of electrical power input, the heat pump will give 4.04kW of heat energy out.
For heat pumps, if the Spark gap is below the SCoP of the heat pump, then the cost of operating the heat pump should be cheaper.
With the current Price Cap Tariffs, a gas boiler operating at 85% efficiency delivers heat at 6.98p per kWh, compared to a heat pump at 27.69p per kWh, giving a spark gap of 3.96:1.
As of the 1st of April, gas drops to 6.75p per kWh, and electricity to 24.67p per kWh, reducing the spark gap to 3.66:1.
Therefore, where the previous price cap rates were very close to the SCOP of the Samsung example above, 3.96:1 against 4.04:1, meaning a heat pump would be marginally cheaper to run, the new spark gap of 3.66:1 gives a considerable advantage in running costs.
*Information taken from the MCS Product database.
Heat Pumps in New-Build Homes
For new-build properties or homes with good insulation, a properly designed and installed heat pump can achieve a Seasonal Coefficient of Performance (SCoP) that maximises efficiency. These systems can reduce running costs compared to gas, making them a more viable, low-carbon alternative.
Retrofitting with the Right Tariff
Retrofit installations can also benefit. When paired with a suitable heat pump electricity tariff, Photovoltaic and battery systems, homeowners can achieve Effective Coefficients of Performance (ECoPs) that surpass the 3.66 spark gap, making heat pumps an increasingly cost-effective replacement for traditional gas boilers.
The Boiler Upgrade Scheme (BUS) and 0% VAT
When you consider all the above and the £7500 BUS grant that is available, added to the fact that all renewable installation works qualify at the 0% VAT, there has never been a better time for homeowners to consider heat pumps for their properties.
Why Now Is the Time to Consider a Heat Pump?
The April 2026 Ofgem price cap changes highlight electricity’s growing cost-effectiveness for heating homes. For homeowners, installers, and specifiers, the message is clear: heat pumps are no longer just an eco-friendly choice; they are increasingly a financially smart one too.
By combining improved insulation, smart design, and the right electricity tariffs, heat pumps can offer lower running costs, better efficiency, and a more sustainable future.
Looking to offer heat pumps to your customers? Contact our team or request a Trade Account today for trade pricing, next-day dispatch, and expert technical support.