The increase comes as demand for the Boiler Upgrade Scheme (BUS) also grows. The scheme provides grants for approved low-carbon heating installations in England and Wales, with thousands of households using financial support to move away from fossil fuel-based heating.
Octopus said customers using its Cosy tariff with a heat pump save an average of £227 per year compared with households using gas boilers. According to the company’s Boiler Beater dashboard, which tracks performance data from thousands of heat pumps, 94% of its heat pumps are cheaper to run than a gas boiler at current rates.
Heat Pump Sales Rise as More Households Switch from Boilers
The July figures represent the sixth consecutive month of growth for Octopus Energy’s heat pump sales. The company said demand was 71% higher than in July 2025, making it the strongest month for sales since the business began offering the technology.
The rise follows wider growth in applications for the Boiler Upgrade Scheme. According to Ofgem, applications between April 2025 and March 2026 increased by 19% compared with the previous year. The scheme has supported more than 80,000 heat pump installations across UK homes since it launched in May 2022.
Households are also making decisions while heat pump installation prices remain lower than previous years. Octopus said customers pay an average of £3,000 to replace an oil boiler and £4,000 to replace a gas boiler with a heat pump. According to data from boiler provider Boilerguide, this is comparable with, or below, the average cost of a new gas boiler installation.
The UK government currently offers grants of up to £7,500 for replacing a gas boiler with a heat pump and up to £9,000 for replacing an oil or LPG boiler. Octopus said the higher grant for oil boilers, introduced in April, has contributed to almost three times as many customers switching from oil and LPG systems.
Government Support and Running Costs Shape the Transition
Heat pumps work by transferring existing heat from sources such as the surrounding air rather than generating heat directly. According to the International Energy Agency, the technology uses a process similar to that found in a refrigerator, extracting heat and moving it to where it is needed.
The shift towards electric heating has been discussed by climate advisers as part of efforts to reduce emissions from buildings. The independent Climate Change Committee has said households could reduce energy bills by adopting technologies such as heat pumps and electric vehicles. Rebecca Dibb-Simkin, chief product and marketing officer at Octopus, said: “The heat pump revolution is accelerating. We’ve never seen demand like this – thousands more households choosing to go electric to save money and insulate themselves from global price shocks.”
The company said its dashboard provides weekly information on heat pump performance from its customer fleet. The data is intended to show how heat pumps operate in homes using smart tariffs. While adoption increases, government figures and company data show a continuing rise in interest in replacing boilers with heat pumps. The latest sales figures from Octopus indicate that more households are considering electric heating as part of their home energy choices.
