Electric Heating Systems 2026: Costs, Types & Grants

What Types of Electric Heating System Are Available?

Several distinct technologies fall under the electric heating label.

Understanding the differences matters because running costs and grant eligibility vary widely between them.

Storage heaters

Storage heaters draw electricity overnight, when time-of-use tariffs are cheaper, and release heat during the day. Modern models with electronic controls and fan-assisted output offer better comfort than older brick-core units, though they still rely on predicting how much heat you will need the following day.

Electric panel and convector heaters

Panel heaters warm a room by heating air directly. They respond quickly but use the electricity rate applying when they operate, making them among the most expensive options to run for whole-house heating. They suit occasional-use rooms or properties where installing wet central heating is impractical.

Infrared panels

Infrared panels radiate heat to surfaces and people rather than warming the air. They can feel comfortable at a lower thermostat setting, but whole-house coverage requires multiple panels and careful placement. Independent long-term running-cost data for UK homes remains limited.

Electric boilers

An electric boiler heats water for radiators and taps, working much like a gas combi or system boiler but without a flue or gas supply. It converts electricity to heat at close to 100% efficiency, yet because electricity costs more per kWh than gas, running costs are typically higher than a gas equivalent. Electric boilers suit flats or homes where a gas connection is unavailable and a heat pump is not feasible. For a closer look at sizing and suitability, see our electric combi boiler guide.

Heat pumps

Air-source and ground-source heat pumps transfer heat from outside air or the ground into your home's water circuit. Because they move heat rather than create it, they can deliver two to four units of heat for every unit of electricity consumed, depending on system design, insulation and flow temperature (Energy Saving Trust). That makes them the most energy-efficient form of electric heating available. They work best in well-insulated homes with larger radiators or underfloor heating designed for lower flow temperatures.

How Much Do Electric Heating Systems Cost to Buy and Run?

Upfront and running costs vary enormously by system type.

The table below uses clearly hypothetical figures to illustrate the range. Actual prices depend on your property, installer quotes and the electricity tariff you pay. These are not current market quotes.

Assumptions behind the illustrative figures: Costs assume a typical three-bedroom semi-detached house, professional installation and VAT. Heat pump ranges reflect the wide variation in system size and ground-work requirements. No specific supplier pricing is used.

A worked example: storage heaters vs heat pump

Suppose a three-bedroom house needs 12,000 kWh of heat per year.

• Storage heaters convert electricity to heat at roughly 100% efficiency, so they consume about 12,000 kWh of electricity. If the off-peak rate is 10p/kWh, the annual heating cost is approximately £1,200.
• An air-source heat pump with a seasonal coefficient of performance (SCOP) of 3.0 would need about 4,000 kWh of electricity for the same heat output. At a standard rate of 24p/kWh, the annual cost is approximately £960.

The heat pump uses less electricity overall, but the saving depends heavily on the tariff structure and the actual SCOP achieved in your home. These figures are illustrative only.

Is Electric Heating Right for Your Home?

The answer depends on your gas supply, insulation and budget.

Electric heating makes most sense in homes that are off the gas grid, where running a gas supply would be expensive or impossible. It also suits well-insulated flats and new-builds where heat demand is low.

Before choosing a system, consider:

• Insulation first. Any electric system costs less to run in a well-insulated home. Loft insulation to the recommended 270 mm of mineral wool is one of the cheapest improvements (Energy Saving Trust). See our loft insulation guide for costs and grant routes.
• Tariff availability. Storage heaters only make financial sense on a time-of-use tariff with a meaningful off-peak rate. Check what your supplier offers before committing.
• Heat pump suitability. If you have outdoor space and can accommodate larger radiators or underfloor heating, compare the heat pump’s projected lifetime costs with the alternatives, including installation, electricity and servicing. Our heat pump guide covers sizing and installation in detail.
• EPC impact. Replacing old electric heating with a heat pump or improving insulation can raise your EPC rating. An EPC does not predict your actual monthly bill, because that depends on occupancy, fuel use and tariffs (GOV.UK).

Which Grants Can Help With Electric Heating Costs?

Several schemes may help with eligible electric heating upgrades, depending on location and household circumstances.

Boiler Upgrade Scheme (BUS)

The BUS provides grants in England and Wales for replacing existing heating with a heat pump. The approved grant values effective 21 July 2026 are:

• £7,500 for an air-to-water or ground-source heat pump
• £9,000 for those types replacing oil or LPG in off-gas-grid properties (available until March 2027)
• £2,500 for an air-to-air heat pump

Replacing an eligible direct-electric heating system can qualify for BUS when the other scheme conditions are met. You must own the property, use an MCS-certified installer and have the system commissioned within 120 days of applying. Most new-builds and social housing are excluded. BUS funding is confirmed through fiscal year 2029/30 under the Warm Homes Plan.

Fossil-fuel hybrid systems do not qualify as the new installation.

ECO4

ECO4 runs until 31 December 2026 and funds energy-efficiency measures including heating upgrades for eligible low-income and vulnerable households. Eligibility depends on home tenure, EPC rating, household circumstances and the measures proposed. ECO4 Flex is a council referral route, not guaranteed funding. It is not automatic for every benefit claimant.

Warm Homes Local Grant

The Warm Homes Local Grant covers private homes in England rated EPC D to G, usually where household income is at most £36,000. Qualifying benefits or postcodes can provide alternative routes. Council surveys and available funding determine which improvements are offered. Funding delivery runs to March 2028. A national application portal exists at GOV.UK.

Scotland

Scotland has separate support programmes. BUS applies to England and Wales only, but Scottish homeowners may be eligible for other grants. See our Scotland energy grants guide for current routes.

VAT relief

Qualifying energy-saving materials installed by a professional carry zero VAT through 31 March 2027, then a scheduled rate of 5%. Supply-only materials bought for DIY installation do not automatically qualify.

Electric Heating vs Gas Central Heating

Compare your actual gas and electricity tariffs and the efficiency of each system. Direct electric heating can cost more for the same heat output when its tariff is substantially above the gas rate, although off-peak rates and standing charges can change the comparison.

Heat pumps change the equation. Because they deliver more heat energy than the electrical energy they consume, a well-designed heat pump system can match or beat gas running costs, especially in an insulated home with low flow temperatures.

The table below summarises the key trade-offs.

If your home already has gas central heating and it works well, switching to direct electric heating is unlikely to save money. Switching to a heat pump may save money over time, particularly with BUS grant support.

How to Check Your Eligibility for Funding

Start by understanding which schemes your property and circumstances might qualify for.

1. Check your EPC. If you do not have a current certificate, you can look one up on the EPC register or commission a new assessment. Our EPC ratings guide explains each band.
2. Use an eligibility screener. Eco's checker indicates possible grant routes based on your property and situation. An MCS installer or your local council then confirms eligibility, measures and funding.
3. Get MCS-certified quotes. For BUS, the installer must be MCS-certified and will apply for the voucher on your behalf. The grant is paid directly to the installer, reducing what you pay.

Check your eligibility on Eco's screener

Eco is an independent comparison and eligibility-screening site. It is not an official approval service. Installers and councils make final eligibility and funding decisions.