How a bill is built
Every domestic electricity and gas bill has two parts. The unit rate is the price of each kilowatt-hour used. The standing charge is a fixed amount for each day you are connected, whatever you use. Ofgem's price cap limits both for default tariffs and is reset every three months. For 1 October to 31 December 2026, the cap for the average Direct Debit customer in Great Britain is:
- Electricity: 26.32p per kWh, and 54.83p a day.
- Gas: 7.97p per kWh, and 29.68p a day.
The next change is on 1 January 2027. Fixed deals and other tariffs can sit above or below the cap; your own bill is the figure to use.
VAT on electricity
Under HMRC's temporary zero rate, qualifying domestic electricity in Great Britain carries no VAT from 1 October 2026 to 30 June 2027, extended at the 2026 Budget. Northern Ireland stays at 5%. Gas remains at 5%, and the cap figure for gas above includes it. For a heat pump household, whose heating now runs on electricity, the zero rate lowers the cost of every unit of heat for as long as it lasts.
Unit rates and the price of heat
For heating, the unit rate is what matters, because a heat pump uses electricity in proportion to the heat it delivers. At the cap's 26.32p, a heat pump achieving 2.8 over the season makes heat at about 9.40p a kWh. Each penny off the electricity unit rate takes about a third of a penny off the price of a kWh of heat at that efficiency. The calculator shows the effect for your own rate.
Standing charges and giving up gas
A home that replaces a gas boiler with a heat pump and has nothing else on gas can disconnect, ending the gas standing charge of 29.68p a day. A home that keeps a gas hob keeps paying it. Electricity's standing charge is paid either way, so switching to a heat pump does not add a new one.
Time-of-use tariffs
Some suppliers offer tariffs with cheaper electricity at certain times, such as overnight or outside the early-evening peak. A heat pump can take advantage in two ways: heating the hot water cylinder in the cheap period, and warming the home a little more before a peak and letting it coast. Smart controls can do this automatically. The gain depends on how big the price gap is, how much heat can be shifted, and whether the higher flow temperatures sometimes needed to shift heat cost more in efficiency than the tariff saves.
Older two-rate tariffs designed for storage heaters work differently, with a long cheap period and a higher day rate. A household moving from storage heaters to a heat pump should check whether its tariff still suits the new pattern of use.
How much electricity a home uses
Ofgem's typical consumption value for a medium electricity user on a single-rate tariff, from July 2026, is 2,500 kWh a year. That is for a home without electric heating. A heat pump adds the electricity needed to make the home's heat, which is the heat demand divided by the seasonal efficiency, so a heat pump household's electricity use will be well above the typical figure while its gas use falls to nothing or almost nothing.
What to check on your own bill
- Your electricity and gas unit rates, and both standing charges.
- Whether your tariff has different rates at different times.
- When your fixed deal, if any, ends.
- Whether anything else in the home will still use gas.