Heat Pump and Heating Costs: Real Savings Potential Compared to Gas and Oil
A detached house with 150 m² of living space and a gas boiler incurs heating costs of EUR 1,800 to 2,400 per year. A heat pump in the same building costs EUR 800 to 1,600 -- depending on building standard, heating system and electricity tariff. The real saving amounts to EUR 300 to 800 annually, and it is growing: the CO₂ levy on fossil fuels rises to EUR 65 per tonne by 2027 and is expected to increase further after that. Anyone switching to a heat pump today benefits from a cost advantage that widens year after year.
However, average figures obscure reality. Heating costs depend on the specific building, heat source, heating system and energy prices. This article calculates the most common scenarios using current prices -- from a KfW 55 new build to an uninsulated older building -- and shows when the investment pays for itself.
The Starting Point: Energy Prices 2026
Every heating cost comparison stands or falls with the energy prices used. The following values reflect market conditions in early 2026 and serve as the basis for all calculations in this article.
| Energy source | Gross price | Includes | Source |
|---|---|---|---|
| Natural gas | EUR 0.12/kWh | CO₂ levy 2026: EUR 55/t = 1.1 ct/kWh | BDEW, Verivox |
| Heating oil | EUR 1.05/litre (approx. EUR 0.105/kWh) | CO₂ levy 2026: EUR 55/t = 1.46 ct/kWh | tecson, Fastenergy |
| Heat pump electricity | EUR 0.27/kWh | Dedicated tariff, no CO₂ component | Verivox, E.ON |
| Household electricity | EUR 0.36/kWh | If no HP tariff available | BDEW |
| PV self-consumption | EUR 0.10/kWh | Generation costs of own PV system | BSW Solar |
CO₂ Levy: The Driver of Rising Fossil Fuel Costs
The CO₂ levy under the Fuel Emissions Trading Act (BEHG) increases the cost of gas and oil in a predictable, continuous manner. Heat pump electricity incurs no CO₂ levy -- the electricity mix is actually becoming cleaner through the expansion of renewable energy.
| Year | CO₂ price (EUR/t) | Surcharge gas (ct/kWh) | Surcharge heating oil (ct/kWh) | Gas price total (ct/kWh) |
|---|---|---|---|---|
| 2025 | 50 | 1.0 | 1.33 | ~11.5 |
| 2026 | 55 | 1.1 | 1.46 | ~12.0 |
| 2027 | 65 | 1.3 | 1.73 | ~12.8 |
| 2028+ | Market price (estimated 80-120) | 1.6-2.4 | 2.1-3.2 | ~13.5-15.0 |
From 2027 the fixed price corridor ends and the CO₂ price will be determined by the market. Analysts expect EUR 80-120 per tonne by 2030. This alone increases gas costs by 20-30% compared to today -- an effect that makes the heat pump more attractive year after year.
The Comprehensive Heating Cost Comparison: Heat Pump vs. Gas vs. Oil
The following table compares annual heating costs for a detached house with 150 m² of living space and 3 occupants -- broken down by building standard. The heat pump is an air-to-water unit, the most common type in Germany.
New Build (KfW 55, Underfloor Heating)
| Item | Gas boiler | Oil boiler | Heat pump (HP tariff) | HP + PV (40%) |
|---|---|---|---|---|
| Heat demand | 10,650 kWh | 10,650 kWh | 10,650 kWh | 10,650 kWh |
| Efficiency / SPF | 0.92 | 0.88 | 3.8 | 3.8 |
| Final energy | 11,576 kWh | 12,102 kWh | 2,803 kWh | 2,803 kWh |
| Energy costs | EUR 1,389 | EUR 1,271 | EUR 757 | EUR 509 |
| Maintenance + chimney sweep | EUR 250 | EUR 350 | EUR 150 | EUR 150 |
| Total cost/year | EUR 1,639 | EUR 1,621 | EUR 907 | EUR 659 |
| Savings vs. gas | -- | EUR -18 | EUR -732 | EUR -980 |
In a new build with underfloor heating, the heat pump is the clear winner. The high SPF of 3.8 means that 2,803 kWh of electricity produces the same amount of heat for which a gas boiler requires 11,576 kWh of gas. The saving of over EUR 700 per year covers the additional investment for the heat pump within 5-8 years.
Renovated Older Building (EnEV Standard, Panel Radiators)
| Item | Gas boiler | Oil boiler | Heat pump (HP tariff) | HP + PV (40%) |
|---|---|---|---|---|
| Heat demand | 16,800 kWh | 16,800 kWh | 16,800 kWh | 16,800 kWh |
| Efficiency / SPF | 0.90 | 0.85 | 3.0 | 3.0 |
| Final energy | 18,667 kWh | 19,765 kWh | 5,600 kWh | 5,600 kWh |
| Energy costs | EUR 2,240 | EUR 2,075 | EUR 1,512 | EUR 1,075 |
| Maintenance + chimney sweep | EUR 280 | EUR 380 | EUR 150 | EUR 150 |
| Total cost/year | EUR 2,520 | EUR 2,455 | EUR 1,662 | EUR 1,225 |
| Savings vs. gas | -- | EUR -65 | EUR -858 | EUR -1,295 |
Even in a renovated older building, the heat pump saves significantly -- despite the lower SPF of 3.0 due to the higher flow temperature required by panel radiators. The saving of EUR 858 with a heat pump tariff rises to nearly EUR 1,300 per year with PV.
Uninsulated Older Building (Pre-1977, Column Radiators)
| Item | Gas boiler | Oil boiler | Heat pump (HP tariff) | HP + PV (40%) |
|---|---|---|---|---|
| Heat demand | 24,000 kWh | 24,000 kWh | 24,000 kWh | 24,000 kWh |
| Efficiency / SPF | 0.85 | 0.80 | 2.3 | 2.3 |
| Final energy | 28,235 kWh | 30,000 kWh | 10,435 kWh | 10,435 kWh |
| Energy costs | EUR 3,388 | EUR 3,150 | EUR 2,817 | EUR 2,109 |
| Maintenance + chimney sweep | EUR 300 | EUR 400 | EUR 150 | EUR 150 |
| Total cost/year | EUR 3,688 | EUR 3,550 | EUR 2,967 | EUR 2,259 |
| Savings vs. gas | -- | EUR -138 | EUR -721 | EUR -1,429 |
Caution with uninsulated older buildings: The heat pump does save on heating costs here too, but the low SPF of 2.3 makes operation expensive. The real lever is renovation: facade insulation and new windows alone reduce the heat demand to approximately 15,000 kWh and enable a flow temperature of 50 °C (SPF 3.0). This cuts heat pump heating costs from EUR 2,967 to under EUR 1,500 -- almost halving them.
Total Cost Analysis: Investment + Operation Over 20 Years
Heating costs alone only tell half the story. For a fair assessment, purchase costs, subsidies, maintenance and price trends over the entire service life must be taken into account.
Assumptions
- Service life: 20 years
- Gas price increase: 3% per year (including rising CO₂ levy)
- Electricity price increase: 1.5% per year
- Oil price increase: 3.5% per year
- Capital costs: not considered (simplified presentation)
Scenario: Renovated Older Building, 150 m²
| Item | Gas boiler (new) | Heat pump | HP + PV (6 kWp) |
|---|---|---|---|
| Purchase price heating system | EUR 12,000 | EUR 30,000 | EUR 30,000 |
| Purchase price PV system | -- | -- | EUR 10,000 |
| BEG subsidy (30-70%) | -- | EUR -12,000 | EUR -12,000 |
| Net investment | EUR 12,000 | EUR 18,000 | EUR 28,000 |
| Operating costs 20 years | EUR 67,900 | EUR 42,200 | EUR 30,800 |
| Total costs 20 years | EUR 79,900 | EUR 60,200 | EUR 58,800 |
| Savings vs. gas | -- | EUR -19,700 | EUR -21,100 |
Over 20 years, the heat pump is approximately EUR 20,000 cheaper than a new gas boiler -- despite the higher initial investment. The break-even point lies at 7-9 years. With a PV system the balance improves further, and the additional benefits of PV (self-consumption for household electricity, feed-in tariff) are not even factored in here.
Make use of subsidies: The BEG subsidy (Federal Subsidy for Efficient Buildings) provides up to 70% towards heat pumps: 30% base subsidy + 20% climate speed bonus (when replacing a fossil heating system) + 30% income-dependent bonus. The maximum eligible amount is EUR 30,000 for the first dwelling unit. More details in the article Heat Pump Costs 2026.
CO₂ Levy: How Much Will Gas Costs Rise by 2030?
The CO₂ levy is the decisive factor that will widen the cost advantage of heat pumps in the years ahead. The following projection shows how annual heating costs develop for a renovated older building (16,800 kWh heat demand).
| Year | Gas price (ct/kWh) | Gas heating costs | HP electricity price (ct/kWh) | HP heating costs | HP savings |
|---|---|---|---|---|---|
| 2026 | 12.0 | EUR 2,520 | 27.0 | EUR 1,662 | EUR 858 |
| 2027 | 12.8 | EUR 2,672 | 27.4 | EUR 1,687 | EUR 985 |
| 2028 | 13.5 | EUR 2,815 | 27.8 | EUR 1,711 | EUR 1,104 |
| 2029 | 14.2 | EUR 2,955 | 28.2 | EUR 1,735 | EUR 1,220 |
| 2030 | 15.0 | EUR 3,100 | 28.6 | EUR 1,760 | EUR 1,340 |
The gap widens: in 2026 the heat pump saves EUR 858; by 2030 the saving grows to EUR 1,340. The reason: the CO₂ levy hits gas and oil directly, whilst heat pump electricity is unaffected. Even if electricity prices rise moderately, the heat pump's advantage grows steadily.
Heating Oil vs. Heat Pump: The Special Case
Oil boilers have a distinctive characteristic compared to gas: the oil price fluctuates more widely and the CO₂ levy hits harder per kWh because heating oil has a higher CO₂ emission factor (2.66 kg/litre vs. 0.20 kg/kWh for gas).
Cost Comparison Oil vs. Heat Pump (Renovated Older Building, 150 m²)
| Item | Oil boiler 2026 | Oil boiler 2030 (projection) | Heat pump 2026 | HP + PV 2026 |
|---|---|---|---|---|
| Energy costs | EUR 2,075 | EUR 2,680 | EUR 1,512 | EUR 1,075 |
| Maintenance + chimney sweep + tank | EUR 450 | EUR 480 | EUR 150 | EUR 150 |
| Total costs | EUR 2,525 | EUR 3,160 | EUR 1,662 | EUR 1,225 |
| Savings vs. oil | -- | -- | EUR -863 | EUR -1,300 |
Oil boilers also have the disadvantage of higher maintenance costs (tank inspection, burner servicing, chimney sweep) and the space required for the oil tank. Anyone switching from oil to a heat pump gains back the tank room as usable cellar space.
Five Levers to Maximise the Cost Advantage
The savings from a heat pump are not a fixed value -- they can be deliberately increased. The following measures are listed in order of effectiveness.
1. Photovoltaics: Electricity at 10 Instead of 27 Cents
The combination of heat pump and PV is the most effective lever. PV self-consumption costs only the generation costs of the system -- around 8-12 ct/kWh for a typical rooftop installation. Realistically, 30-50% of heat pump electricity can be covered by self-consumption.
Worked example: With 5,600 kWh of heat pump electricity consumption and 40% PV coverage, 2,240 kWh are sourced at EUR 0.10/kWh instead of EUR 0.27/kWh. That saves EUR 380 per year -- on top of the savings from the reduced household electricity component.
2. Heat Pump Electricity Tariff: 25% Cheaper Than Household Electricity
A dedicated heat pump electricity tariff is a prerequisite for economical operation. The requirement: a separate electricity meter and a ripple control receiver that allows the grid operator to briefly switch off the heat pump during peak demand periods (maximum 3 x 2 hours per day). In return, network charges are substantially reduced.
| Tariff | Price (ct/kWh) | Cost at 5,600 kWh | Savings vs. household electricity |
|---|---|---|---|
| Household electricity | 36 | EUR 2,016 | -- |
| HP electricity tariff | 27 | EUR 1,512 | EUR 504 |
| HP tariff + PV (40%) | Mix ~20 | EUR 1,075 | EUR 941 |
3. Optimise Flow Temperature
Every kelvin reduction in flow temperature increases the SPF by approximately 2.5%. A reduction from 55 °C to 45 °C -- often achievable through more generously sized radiators or after insulation improvements -- raises the SPF from 2.8 to approximately 3.5 and reduces electricity consumption by 20%. Based on an initial consumption of 5,600 kWh, that saves over EUR 300 per year.
4. Improve the Building Envelope
Upgrading the building envelope has a double effect: it reduces heat demand and simultaneously enables lower flow temperatures. Both effects multiply.
| Measure | Cost (approx.) | Heat demand reduction | HP savings/year |
|---|---|---|---|
| Roof insulation (20 cm) | EUR 8,000-15,000 | 15-20% | EUR 200-350 |
| Facade insulation (ETICS) | EUR 15,000-30,000 | 25-35% | EUR 350-550 |
| Window replacement (triple glazed) | EUR 8,000-16,000 | 10-15% | EUR 150-250 |
| Basement ceiling insulation | EUR 2,000-5,000 | 5-10% | EUR 80-150 |
Basement ceiling insulation offers the best cost-benefit ratio: for an investment of EUR 2,000-5,000 it saves EUR 80-150 in heating costs per year and can be completed in a weekend.
5. Optimise Operating Settings
Cost-free measures with immediate effect:
- Adjust the heating curve: Instead of using the factory default, adapt the heating curve to actual demand. This saves 5-10% of electricity.
- Set hot water temperature to 48 °C: Reduces hot water electricity consumption by 15-20% compared to 55 °C. A weekly boost to 60 °C for legionella protection is sufficient.
- Assess night setback: In well-insulated buildings, night setback offers little benefit because the heat pump requires more electricity in the morning to reheat the building. In poorly insulated houses it can save 3-8%.
Detailed guidance on these topics in the article Optimisation & Settings.
Heat Pump in an Older Building: Is It Still Worth It?
The most common question when upgrading a heating system is: does a heat pump pay off in my older building? The answer depends on three factors:
Decision Matrix
| Starting situation | Recommendation | Expected savings vs. gas |
|---|---|---|
| Renovated older building + surface heating | Heat pump unreservedly recommended | EUR 700-1,200/a |
| Renovated older building + panel radiators (<=50 °C) | Heat pump recommended | EUR 500-900/a |
| Partially renovated older building + mixed radiators | Heat pump sensible, consider replacing radiators | EUR 300-600/a |
| Uninsulated older building + column radiators (>60 °C) | Renovate first, then heat pump | EUR 0-300/a (without renovation) |
Step-by-step plan for older buildings: If you cannot renovate everything at once, the most effective sequence is: (1) insulate the basement ceiling, (2) switch to a heat pump, (3) insulate the roof, (4) insulate the facade, (5) replace windows. Each step reduces heat demand and increases the SPF -- the heat pump becomes more efficient with every measure.
More on this topic in the article Heat Pumps in Older Buildings.
Frequently Asked Questions
Does a heat pump really save on heating costs compared to gas?
Yes, in the vast majority of cases. With a heat pump electricity tariff of EUR 0.27/kWh and a gas price of EUR 0.12/kWh, the saving amounts to EUR 300-800 per year for a typical detached house. The prerequisite is an SPF of at least 2.8 -- air-to-water heat pumps achieve this in all buildings with flow temperatures up to 55 °C. Only in uninsulated older buildings with very high flow temperatures above 60 °C does the advantage diminish.
When does a heat pump pay for itself?
The payback period depends on the subsidy. With a BEG grant of 30-70%, the net investment is EUR 9,000-18,000. At an annual saving of EUR 500-1,000 compared to gas, the additional investment pays for itself in 7-12 years. If gas prices rise as projected, this period shortens to 5-8 years.
Is a heat pump cheaper than a new gas boiler?
Over a service life of 20 years: clearly yes. The higher purchase costs are more than offset by lower running costs and the value advantage (no CO₂ levy, no mandatory replacement under GEG). A new gas boiler costs approximately EUR 80,000 over 20 years (purchase + operation), whilst a heat pump costs EUR 55,000-60,000.
How much more do I save with photovoltaics?
A 6 kWp PV system (approx. EUR 10,000) realistically covers 30-50% of heat pump electricity through self-consumption. That saves EUR 300-600 per year in electricity costs. Additionally, the PV system reduces household electricity costs and earns a feed-in tariff -- the overall return on a PV system is typically 5-8% per year.
What happens if electricity prices rise?
Even with an electricity price increase of 2% per year, the heat pump remains cheaper than gas as long as the gas price rises by at least 1.5% per year -- which is practically guaranteed by the CO₂ levy. Furthermore, PV self-consumption protects against electricity price increases because your own solar system generates at fixed production costs.
Conclusion -- The Heat Pump as a Heating Cost Brake
In summary: A heat pump saves on heating costs compared to gas and oil in almost all scenarios -- the only question is how much. In a renovated detached house the saving is EUR 500-900 per year, rising to over EUR 1,200 with PV. The rising CO₂ levy automatically widens the advantage every year. Over 20 years, the savings amount to EUR 15,000-25,000 compared to a gas boiler. Even in older buildings, the heat pump pays off provided the flow temperature stays below 55 °C. The combination of BEG subsidies (up to 70%), a dedicated heat pump electricity tariff and PV self-consumption makes switching more economically attractive than ever before.
Article Series
| No. | Article | Topic |
|---|---|---|
| 1 | Heat Pumps: The Complete Guide | Overview and introduction |
| 2 | How Does a Heat Pump Work? | Physical fundamentals |
| 3 | The Components | Heat exchangers, compressor, expansion valve |
| 4 | Key Figures and Sizing | COP, SPF, design |
| 5 | Operating Modes | Monovalent, bivalent, hybrid |
| 6 | Heat Pump Types and Solar Integration | Types & combination with PV |
| 7 | SCOP Explained | Seasonal coefficient of performance |
| 8 | Optimisation & Settings | Practical operating guide |
| 9 | Calculate Output | Sizing |
| 10 | Heat Pump Costs 2026 | Purchase, installation, operation |
| 11 | Heat Pumps in Older Buildings | Efficient use in existing buildings |
| 12 | Electricity Consumption per Year | Consumption by building type |
| 13 | Save on Heating Costs with a Heat Pump | You are here |
| 14 | Solar and Heat Pump: The Dream Team | PV + heat pump combination |
Further Reading
Heat Pump Costs 2026 · Electricity Consumption per Year · Heat Pumps in Older Buildings · Optimisation & Settings
Sources
- BDEW: Gas Price Analysis 2026
- German Federal Government: CO₂ Pricing (BEHG)
- BAFA: BEG Subsidy for Heat Pumps
- co2online: Heizspiegel 2024 (German Heating Cost Index)
- Verivox: Heat Pump Electricity Tariffs
- Fraunhofer ISE: Heat Pump Monitoring
- BSW Solar: Photovoltaics Price Index
Calculate Heating Costs & Size Your Heat Pump
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