Octopus Cosy Heat Pump Tariff: Is It Worth Switching?

The Octopus heat pump tariff, branded as Octopus Cosy, has quickly become the most popular electricity tariff for UK heat pump owners. Octopus Energy reports that 80% of their heat pump customers pay less for heating than the average gas bill, and much of that saving is driven by the Cosy tariff’s off-peak rate structure. But is it right for everyone? This guide reviews the tariff in detail, compares it with alternatives, explains how smart controls maximise savings, and shares real customer data on what you can actually expect to save.

Is the Octopus Cosy Heat Pump Tariff Worth It?

Yes, the Octopus Cosy tariff is worth switching to for most heat pump owners. It charges 51% less than its Day rate (which varies by region) for eight hours a day, against a flat 26.32p per kWh on the standard variable tariff (Ofgem’s price cap for October to December 2026). For a typical home using 4,000–5,000 kWh of electricity for heat pump operation, this can save £420 to £590 per year on heating costs.

The tariff works by providing cheaper electricity during three daily windows (4–7am, 1–4pm and 10pm to midnight), so the heat pump can build up heat before the morning and evening, when it works hardest. A smart meter is required, and you need to be able to shift most of your heat pump usage into these windows using a timer or weather compensation. The trade-off is a peak rate 50% above the Day rate from 4pm to 7pm, so households with very high daytime electricity consumption should calculate whether the net saving still applies.

Understanding electricity tariffs is arguably as important as choosing the right heat pump, because the tariff determines the effective cost per kWh of heat delivered to your home.

How the Octopus Cosy Tariff Works

Octopus Cosy is a time-of-use electricity tariff designed specifically for homes with heat pumps. Rather than charging a flat rate for all electricity, it offers multiple rate periods throughout the day:

• Cosy rate (early morning and late evening) – 51% cheaper than the Day rate from 4am to 7am and from 10pm to midnight. This is when you should be pre-heating your home and charging your hot water cylinder
• Cosy rate (afternoon) – The same 51% discount from 1pm to 4pm, ahead of the evening peak
• Peak (evening) – 50% above the Day rate during the highest demand period, 4pm to 7pm
• Day rate (remaining hours) – The regional Day rate for hours outside the defined windows

The exact rates vary by region and are updated periodically. Octopus publishes the current rates on their website and in the app. The key principle is that by shifting your heat pump’s heaviest electricity consumption to the cheapest periods, you significantly reduce your overall cost.

To qualify for Octopus Cosy, you need:

• A heat pump, an electric boiler or electric radiators in your property
• A smart meter (SMETS2, or a secure SMETS1) installed and communicating
• An Octopus Energy electricity supply account

Real Savings Data: What Customers Actually Pay

Octopus Energy has published data from thousands of Cosy tariff customers. The headline figures are impressive:

The critical row is the effective cost per kWh of heat. Even though electricity is more expensive per unit than gas, the heat pump’s COP of 3.0-3.5 combined with the Cosy tariff’s lower blended rate means each unit of heat actually costs less than gas heating for the majority of customers.

The customers achieving the lowest costs (under £500 per year) typically combine the Cosy tariff with solar panels, good insulation, and smart controls that aggressively pre-heat during the cheap Cosy windows.

How Smart Controls Maximise Cosy Tariff Savings

The Cosy tariff’s full potential is only unlocked when your heat pump is paired with smart controls that can schedule operation around the tariff windows. Without smart scheduling, your heat pump runs whenever it detects demand, regardless of the current rate. With smart scheduling, it pre-heats during cheap periods and minimises consumption during expensive ones.

The most effective approach is:

• Early-morning pre-heating (4am to 7am) – Run the heat pump at moderate output during the Cosy window to build up thermal mass in your home. A well-insulated property can retain this heat for several hours
• Daytime maintenance – Minimal heat pump operation during Day rate hours, relying on the stored heat from the early morning
• Afternoon boost (1pm to 4pm) – A run during the afternoon Cosy window to top up temperatures before the evening peak
• Evening avoidance – Reduce or eliminate heat pump operation during the peak 4-7pm window. Your home should still be comfortable from the day’s stored heat
• Hot water scheduling – Heat the cylinder during Cosy hours only, using the immersion heater as a backup only if necessary

Controllers like Homely and Passiv can import Octopus tariff data automatically and optimise the heating schedule around the rate windows. They use weather forecasts, your home’s thermal characteristics, and the tariff timetable to determine exactly when and how hard to run the heat pump for minimum cost. Users of these controllers report savings of 25-40% compared to running the heat pump on a simple timer.

Octopus Cosy vs Other Heat Pump Tariffs

Octopus Cosy is not the only option for heat pump owners. Several alternative tariff structures are worth considering:

Octopus Agile

Agile offers half-hourly variable pricing based on wholesale electricity markets. Rates can drop as low as 0p (or even negative) during periods of high renewable generation, but can spike to 35p+ per kWh during peak demand. Agile rewards active engagement and rapid response, but requires more monitoring than Cosy. It suits households with battery storage or very flexible demand.

For heat pump owners without a battery, Cosy is generally more predictable and easier to optimise. With a battery, Agile can deliver lower overall costs by charging during the cheapest half-hours and discharging during expensive ones.

Octopus Intelligent

Intelligent is designed for EV owners and offers a super off-peak rate for the car charger. If you have both an EV and a heat pump, Intelligent may provide good overnight rates for both. However, the heat pump-specific optimisation of Cosy is generally more beneficial for heating costs specifically.

E.ON Heat Pump Plus

E.ON offers a heat pump tariff with a reduced off-peak rate, though typically not as low as Octopus Cosy’s cheap rate. The tariff is simpler with fewer time windows, which may suit homeowners who prefer a less complex rate structure. E.ON’s rates are typically 1-3p per kWh higher than Cosy’s off-peak equivalent.

British Gas Electric Heat

British Gas offers an electric heating tariff with two-rate time-of-use pricing (similar to the old Economy 7 concept but with heat pump-specific off-peak windows). The off-peak rates are competitive but the peak rates tend to be higher than Octopus, making overall savings more dependent on how much consumption you can shift to off-peak.

Comparison Table: Heat Pump Electricity Tariffs

Is the Octopus Cosy Tariff Worth Switching To?

For the vast majority of heat pump owners, the answer is yes. The potential savings compared to a standard flat-rate tariff are substantial:

• A 3-bed semi using 4,000 kWh per year for heat pump electricity saves approximately £270-£470 per year by switching from a flat rate to Cosy
• A 4-bed detached using 6,000 kWh per year saves approximately £410-£710 per year
• Homes with solar panels save even more because export during peak solar hours is worth more under Cosy’s higher daytime rate

The main caveat is that Cosy’s peak rates are higher than the flat rate. If you cannot shift much consumption to off-peak (for example, if you work from home and need heating during peak hours), the savings will be smaller. However, a well-insulated home with a heat pump running weather compensation can typically shift 50-70% of consumption to off-peak windows without any compromise on comfort.

Switching is straightforward through the Octopus app or website. There are no exit fees, and you can switch back to a flat rate if the tariff does not work for your usage pattern. Get a free quote for a heat pump installation, and ask about optimising your system for time-of-use tariffs from day one.

Frequently Asked Questions

Do I need a smart meter for the Octopus Cosy tariff?

Yes. A SMETS2 or secure SMETS1 smart meter is required because the tariff uses half-hourly metering to apply different rates at different times. If you do not have a smart meter, Octopus can arrange installation for free, though there may be a waiting period of 2-6 weeks depending on your area.

Can I use the Octopus Cosy tariff without a heat pump?

Yes, if your home is heated by an electric boiler or electric radiators. Octopus (checked 29 September 2026) opens Cosy to homes with a heat pump, an electric boiler or electric radiators, with a SMETS2 or secure SMETS1 smart meter. If your home is heated another way, check with Octopus; other time-of-use tariffs may be available.

How much can I save by switching to the Octopus heat pump tariff?

Savings depend on your heat pump electricity consumption and how much you can shift to off-peak. Typical savings compared to a standard flat-rate tariff are £270-£710 per year. Households with smart controls, solar panels, and battery storage can save more. Octopus reports that the median Cosy customer pays £600-£750 per year for heating, which is less than the average UK gas bill.

Does the Cosy tariff make my non-heating electricity more expensive?

The Cosy tariff applies to all your household electricity, not just the heat pump. This means your non-heating appliances also benefit from off-peak rates if used during cheap periods, but will cost more if used during peak periods. Running your washing machine, dishwasher, and other high-consumption appliances during off-peak windows maximises the tariff benefit across your entire electricity bill.

What happens if I switch to Cosy and it does not save me money?

Octopus Energy has no exit fees on any of their tariffs. If you find that Cosy is not saving you money (which is unusual for heat pump owners), you can switch to a different Octopus tariff or leave entirely at any time. We recommend running Cosy for at least 2-3 months before making a judgement, as savings vary by season. Winter is when the biggest savings occur due to the high volume of off-peak heating.