Fixed vs variable tariffs for heat pump owners: which gives a lower bill in 2026?
Most fixed vs variable comparisons assume a typical household with flat usage. Heat pump owners are not typical — they use two to three times more electricity than average, most of it in winter, and a significant share is shiftable to off-peak windows. That changes the calculation considerably. A flat fixed rate competes not with the standard cap, but with the effective blended rate you'd actually achieve on a time-of-use tariff.
The standard argument — and why it's different for heat pumps
The usual framing: fix when the cap is forecast to rise; stay variable when it's forecast to fall. That's reasonable for a household with flat, predictable electricity use.
It's much less useful for a heat pump household. The relevant comparison isn't "fixed rate vs cap rate." It's "fixed rate vs effective blended rate on a time-of-use tariff."
Heat pump owners have access to dedicated tariffs with off-peak windows that deliver effective blended rates well below any available flat-rate fixed deal. A Cosy Octopus household with good scheduling typically achieves an effective rate of 18–20p/kWh. Competitive 12-month fixes in June 2026 are available at around 24–26p/kWh. The gap is 5–7p/kWh in favour of the time-of-use tariff — on 7,000 kWh of annual consumption, that's £350–£490/year.
What a flat-rate fixed tariff offers
A 12-month fixed tariff locks your unit rate for the year. In June 2026, competitive fixes are available at around 24–26p/kWh — slightly below the Q3 cap rate of 26.11p, providing certainty against further rises.
What it does not offer: any off-peak discount. Every kWh your heat pump draws costs the same rate, regardless of when it runs.
For a heat pump household using 7,000 kWh/year at a flat fix of 25p, electricity cost is approximately £1,750/year before standing charges.
What an active heat pump tariff user pays
A household on Cosy Octopus with good load-shifting — 70% of consumption in off-peak windows, 16:00–19:00 peak avoided — using Q3 2026 estimated rates:
- Off-peak (~15.5p): 70% = 4,900 kWh × 15.5p = £759
- Standard (~26.1p): 28% = 1,960 kWh × 26.1p = £512
- Peak (~54.7p): 2% = 140 kWh × 54.7p = £77
Total: ~£1,348. Effective blended rate: ~19.3p/kWh.
Versus the flat fix at 25p: £1,750. Difference: £402/year.
A passive Cosy user (less scheduling, some peak exposure) does worse, but even without deliberate scheduling a significant portion of a heat pump's run-time naturally falls in off-peak windows overnight and at midday.
When a flat-rate fix genuinely makes sense
Your heat pump can't be scheduled. Without a programmable controller, the heat pump runs whenever the thermostat calls — including peak hours. On Cosy, unscheduled peak exposure at ~54.7p/kWh can eliminate the off-peak savings entirely. A flat rate is more predictable in that scenario.
You can't avoid the 16:00–19:00 window. If consistent evening heating demand during peak hours is unavoidable, consider E.ON Next Pumped (milder peak) or EDF FreePhase / British Gas Heat Power (no severe peak) before reaching for a flat fix.
Simplicity matters more than optimisation. Setting a heat pump schedule takes 10 minutes, but it's not zero effort. A flat fixed rate removes all variables. Some households genuinely value that.
Very low heat pump consumption. If your property uses only 3,000–4,000 kWh/year on the heat pump, the absolute saving from off-peak scheduling is smaller. The proportional benefit is similar, but the pounds-per-year difference may not feel worth the management overhead.
Why variable heat pump tariffs get more valuable as the cap rises
This is counterintuitive but important. Variable heat pump tariffs are priced as a percentage of the regional cap. As the cap rises, the absolute gap between cheap and expensive rates widens.
At Q2 rates: Cosy off-peak ~14.5p vs standard ~24.7p — a gap of 10.2p/kWh. At Q3 rates: Cosy off-peak ~15.5p vs standard ~26.1p — a gap of 10.6p/kWh.
The percentage discount is fixed; the absolute saving per kWh grows. In a high-cap environment, time-of-use tariffs become more valuable, not less. The Q3 13% cap rise widens the case for heat pump tariffs rather than undermining it.
How to work out what's right for you
- Find your actual annual electricity consumption from your smart meter, Bright account, or annual bill.
- Estimate your load-shifting capability — what percentage of consumption could you realistically move to off-peak windows? (Hot water: most of it. Space heating: partial. Appliances: modest.)
- Calculate your effective blended rate on a heat pump tariff using realistic percentage splits across rate bands.
- Compare to the flat rate on any fixed deal you're considering.
If step 3 is lower than step 4, the heat pump tariff wins. If your shifting capability is very limited and a competitive fix is available, the fixed tariff might be better.
Heat Pump Tariffs does this calculation using your actual half-hourly data — showing the true annual cost on each tariff rather than a theoretical estimate.
The short version
- Flat-rate fixed tariffs offer certainty but no off-peak discount — every kWh costs the same.
- Variable heat pump tariffs offer structured discounts that scale with the cap. Active users typically achieve effective rates well below any available flat fix.
- The case for a flat fix is strongest when scheduling is impossible, peak exposure is unavoidable, or simplicity is the priority.
- In a rising cap environment, the absolute value of off-peak discounts increases — making time-of-use tariffs stronger, not weaker.
- The only reliable comparison uses your actual consumption data, not national averages.
Compare fixed and variable heat pump tariffs against your real usage on Heat Pump Tariffs.