How We Calculate Costs: Our Methodology

Quick answer: Every modelled cost on Home Energy Quotes starts from a national installed-price baseline for each product, is adjusted by a 12-region labour index (0.92 to 1.20), and is given a typical range of 0.65× to 1.55× the mid-point. Running costs and savings use the October–December 2026 Ofgem price cap (26.32p/kWh electricity, 7.97p/kWh gas) and Ofgem’s typical household use of 2,500 kWh of electricity and 9,500 kWh of gas a year.

This page is the methodology behind our UK Home Energy Cost Index and the savings calculator. It was last reviewed on 29 September 2026, when every saving and payback figure was recalculated for the October–December 2026 cap and insulation was re-priced from the Energy Saving Trust’s installed costs. We publish it in full because a cost estimate you cannot interrogate is just a guess with confidence.

The inputs

• National installed-price baselines. For each of the nine products we track, we maintain a single national mid-point figure for a typical domestic installation — for example £11,014 for an air source heat pump and £6,496 for solar panels in July 2026. For most products it’s the average of the town-by-town estimates we first published in spring 2026. Insulation is the exception: its £2,950 mid-point is the Energy Saving Trust’s installed price for loft insulation (£750) plus cavity wall insulation (£2,200), checked September 2026.
• Regional labour indices. Installation is labour-heavy, so we apply a multiplier for each of the 12 UK regions, from 0.92 in Northern Ireland to 1.20 in London, reflecting relative trade labour rates.
• Energy prices. All running-cost and savings arithmetic uses the Ofgem price cap for October–December 2026: 26.32p/kWh for electricity, 7.97p/kWh for gas and a 29.68p a day gas standing charge (Direct Debit, GB average). Where a saving depends on how much energy a home uses, we use Ofgem’s typical consumption values of 2,500 kWh of electricity and 9,500 kWh of gas a year. We recheck every figure when the cap changes. Our price cap explainer covers how those rates are set.
• Export rate. Solar and battery savings value exported electricity at 12p/kWh, the most common Smart Export Guarantee rate open to all customers of a supplier in our export tariff table (checked 28 September 2026). Some suppliers pay 4p or less; at 4p a solar system is worth roughly £220 a year less.

The range rule: mid × 0.65 to mid × 1.55

A single average hides more than it reveals, so every cost is published with a typical range: the mid-point multiplied by 0.65 at the low end and 1.55 at the high end. The asymmetry is deliberate — real quotes overshoot the average more often, and by more, than they undershoot it (bigger properties, awkward access, higher-spec kit). A heat pump with a £11,014 mid-point therefore shows as £7,159–£17,072.

The regional index

Multiply the national mid-point by the index to get our regional figure. Rounded to the nearest pound, this is the entire regional calculation, with one exception: insulation in Northern Ireland uses the Energy Saving Trust’s own Northern Ireland prices (loft insulation £1,100, cavity wall insulation £1,000), which differ from Great Britain’s by far more than the index would suggest.

Savings and payback

Every saving is a “could save up to” estimate for a typical household at the October–December 2026 cap, recalculated on 28 September 2026. We take the better end of what a typical home can expect and say which case that is. Energy Saving Trust figures are converted back to kWh at the prices it states (6.5p/kWh gas) and re-priced at the cap.

• Solar panels: up to £555 a year. A 4kWp system makes about 3,630 kWh a year, using the 2021 to 2025 average UK solar load factor of 10.4% from the government’s Digest of UK Energy Statistics. MCS’s self-consumption tables say a home using 2,500 kWh that’s occupied in the day uses 23% of that itself. The rest is exported at 12p.
• Battery storage: up to £192 a year on top of the solar saving. A 10kWh battery (9kWh usable) lifts self-consumption from 23% to 60% in the same MCS tables, so about 1,340 kWh a year is used at 26.32p instead of exported at 12p. The cap has no cheap overnight rate, so time-of-use savings aren’t counted.
• Heat pumps: up to £272 a year. That’s a heat pump replacing an old non-condensing gas boiler (66% efficient in the government’s SAP 10.2 tables) in a home using 9,500 kWh of gas, with the gas supply capped. We use the median real-world efficiency, SPF 2.78, measured in the government-funded Electrification of Heat trial. Replace a modern condensing boiler instead and the saving on the cap is about £110 a year, or almost nothing if you keep gas for cooking.
• Boilers: up to £202 a year. A new A-rated condensing boiler (90% efficient) replacing an old non-condensing one (66%) cuts 9,500 kWh of gas use by about 2,530 kWh. If yours is a 1998 to 2005 non-condensing model (74%), expect nearer £135.
• Insulation: up to £478 a year for loft insulation laid from nothing to 270mm plus cavity wall insulation in a three-bedroom semi, from Energy Saving Trust figures (loft, cavity wall) re-priced to 7.97p/kWh gas. On our town pages, loft insulation alone saves up to £233 a year, and adding a suspended timber floor (Energy Saving Trust, £55 a year) takes the package to about £546. Topping up a loft that already has 120mm is worth far less: about £21 a year.
• Double glazing: up to £104 a year for A-rated double glazing replacing single glazing throughout a semi, from the Energy Saving Trust figure re-priced to the October cap. Swapping old double glazing for new saves less.
• Home EV chargers: up to £758 a year from charging at home at 26.32p/kWh instead of buying petrol, over the 6,200 miles an average petrol car covers a year in England (National Travel Survey, 2025) and the Energy Saving Trust’s cost per 220 miles for each fuel.
• Infrared panels and conservatory roofs: no saving figure. The Energy Saving Trust says infrared heating costs about four times as much per unit of heat as gas, and that little research confirms savings against other electric heaters. None of the Energy Saving Trust, DESNZ, Ofgem or MCS publishes a saving for a conservatory roof, and it turns on whether you heat the room at all. We’d rather print nothing than guess.

Simple payback is the modelled mid-point cost divided by the modelled annual saving, rounded to the nearest year. It ignores price inflation, financing, maintenance and grant support unless stated. Where a grant applies, as with the £7,500 Boiler Upgrade Scheme, we show payback both ways: on the cap a heat pump pays back in about 40 years without the grant and about 13 years with it.

Limitations — read these before quoting us

• These are modelled desk-research estimates, not quotes, surveys of completed installations, or installer billing data.
• Your property can move a real quote far outside our range: listed status, roof condition, system size, access and spec all matter more than region.
• Regional indices are averages — a rural Highlands job and a central Edinburgh job carry the same Scotland multiplier.
• Savings depend on usage, occupancy and tariff; a household on a time-of-use tariff will see different numbers from the cap-rate defaults.
• Official statistics can differ from our model for structural reasons — DESNZ’s median for grant-funded heat pump installations (£13,041 in 2025/26) runs above our all-comers average, because grant-funded jobs skew complex.
• Installed-price baselines are dated July 2026, except insulation’s, which are Energy Saving Trust prices checked in September 2026. Modelled savings were recalculated on 28 September 2026 at the October–December 2026 cap. Always check the date on any page citing the index.

If you spot an error or a figure that has drifted from reality, we want to know — the index only earns trust by being checkable. Start comparing costs on the Cost Index, or put your own numbers into the savings calculator.