Electricity vs Gas Prices: Is the Gap Finally Narrowing?

Last updated: November 2026

Is gas cheaper than electricity in the UK? Yes. Gas is still cheaper than electricity per unit. Under the October–December 2026 energy price cap, electricity costs 26.32p per kWh compared with 7.97p for gas.

Even with more of our electricity coming from renewables, electricity costs around 3.3 times more per unit compared to gas. However, the gap between the cost of both fuel types, also known as the ‘spark gap’, has narrowed considerably from 4.7 times in January 2026.

With another energy price cap change expected in January, what does this mean for homeowners comparing gas and electric heating? And could the narrowing gap make switching to electricity a more affordable option?

Is electricity cheaper than gas in the UK right now?

Electricity is still more expensive than gas per unit of energy, but the price difference is getting smaller.

According to Ofgem’s October–December 2026 price cap figures, the average electricity and gas rates for households paying by Direct Debit in Great Britain are:

Source Ofgem price cap figures. Great Britain average, Direct Debit, including applicable VAT. Actual rates vary by region, tariff and payment method.

The unit rate is what you pay for each kilowatt-hour (kWh) of energy used, and the standing charge is a daily fixed charge you pay for maintaining your energy supply, even when you’re not using it.

Although electricity is more expensive per unit, the gap has narrowed because gas prices have risen more sharply, alongside policy changes. The tariff you’re on and how you pay for energy bills also affect the final cost.

Why is electricity more expensive than gas?

Given the incentives for homes and businesses to use more eco-friendly energy solutions, you might wonder why gas is cheaper than electricity, particularly when the UK is generating more energy from renewable sources.

One reason is that gas still plays a key role in setting wholesale electricity prices. Under the UK’s electricity market system, gas-fired power stations can influence the wholesale price even when some electricity is being generated from cheaper renewable sources.

In the UK, electricity prices are influenced by a system called marginal pricing. This means the wholesale price is set by the last power station needed to meet demand, which is often gas-powered.

So, even when cheaper renewable sources such as wind and solar generate much of our electricity, gas power stations can still determine the wholesale price. According to Energy UK, this can happen as much as 85% of the time. As a result, when gas prices rise, electricity prices can increase too, despite the growing contribution of renewable energy.

Electricity bills have also historically included more of the costs associated with government energy and environmental schemes than gas bills. These additional charges have contributed to electricity being more expensive, even as the UK encourages households to move towards electric heating.

However, recent government changes have shifted some of these costs away from electricity bills, helping to narrow the price gap between gas and electricity.

Is the gap between electricity and gas prices narrowing?

Yes, the electricity-to-gas price ratio has fallen from around 4.7 in January 2026 to approximately 3.3 in October, according to analysis from Nesta.

Several changes have contributed to this:

• Energy policy costs. From April 2026, the government moved a substantial proportion of Renewables Obligation costs from electricity bills to general taxation and ended ECO funding.
• Electricity VAT. Domestic electricity in Great Britain has been temporarily zero-rated for VAT from 1 October 2026 until 31 March 2027, while domestic gas remains subject to 5% VAT.
• Gas prices. Gas unit rates have risen more sharply than electricity rates between the July and October price cap periods.

These changes have reduced the relative cost of electricity, although they haven’t made it cheaper than gas.

So could the gap narrow further in January 2027? It could, although the January energy price cap has not yet been confirmed.

At the moment, Cornwall Insight’s October forecast suggests the typical annual dual-fuel bill could rise by approximately 16% to £1,999 in January 2027. Its forecast electricity unit rate of 30.28p/kWh and gas rate of 9.76p/kWh would put the electricity-to-gas ratio at approximately 3.1.

However, before you make any changes to your energy supply, please note that these are forecasts, not confirmed prices. Ofgem is expected to announce the January cap by 25 November 2026.

The temporary electricity VAT reduction is also due to end on 31 March 2027, so the longer-term price gap will depend on future policy decisions and wholesale energy costs.

What the energy price gap means for heating your home

When it comes to heating your home, despite the energy price gap closing, the final price you pay for a unit of energy isn’t necessarily the same as the cost of producing a unit of useful heat. Different heating systems convert or transfer energy into warmth in different ways, and how well your home is insulated can each impact how much you end up paying.

For example, a gas boiler loses some energy through its flue, while a direct electric radiator converts almost all the electricity it uses into heat within the home. A heat pump works differently again, using electricity to transfer heat from outside into the property.

Using October–December 2026 energy prices, here’s how the cost of producing heat compares per heating system.

Source Illustrative comparison using Ofgem October–December 2026 average unit rates. Excludes standing charges, installation, maintenance and other costs. Actual performance and running costs vary.

This is why comparing electric heating vs gas on unit price alone can be misleading. However, your overall heating bill depends on more than the cost per unit with other considerations which can affect your heating costs:

1. How your home loses heat. A poorly insulated home needs more energy to maintain a comfortable temperature, regardless of the heating system. For example, if warmth is escaping through draughty windows, poorly insulated walls or the roof, your heating system needs to constantly work to replace it.

Understanding how heat loss affects your heating costs is an important starting point to making your home more energy efficient.

2. How many rooms you’re heating. If you spend most of the day in one room, heating the entire property to the same temperature may not be necessary. This is where room-by-room heating controls can help you customise your heating schedule to your routine. In an Energy Saving Trust field trial of five properties, where traditional electric storage heaters were replaced with Fischer Future Heat Dynamic Electric Storage Heaters, householders reported feeling more comfortable and at the same time maintained an indoor air temperature that was an average of 0.7°C lower suggesting that less energy may be required to maintain desired levels of comfort.
3. Your energy tariff. Some time-of-use tariffs offer lower electricity rates during certain periods of the day. These can be useful for households who are able to shift most of their electricity use into cheaper off-peak periods. Electric storage heaters can also take advantage of suitable off-peak tariffs by storing heat for later use.
4. Solar panels and battery storage. Households with solar panels or battery storage may be able to use more of their own generated electricity or electricity purchased during lower-cost periods. The benefit depends on how energy is generated, its storage capacity, tariff and heating demand.
5. Standing charges. Homes that no longer need a gas supply may avoid the gas standing charge. At the October 2026 average of 29.68p per day, that would save you about £108 annually. However, this only applies if the gas supply and associated standing charge are removed – costs to disconnect or meter-removal charges may also apply. The government also plans to remove the gas standing charge in 2027 or as soon as possible after, moving the cost onto the gas unit rate, so this saving may not last.

Ultimately, it isn’t one single factor that impacts your heating costs. Always take into consideration your energy tariff, the property size, insulation, heat loss risk, room usage, your heating controls and schedule.

Is it worth switching from gas to electric heating?

Given the spark gap, you might be wondering whether now is the right time to move away from gas. You may have guessed, it’s not a straight ‘yes’ and the answer depends on your home and existing heating system.

If you have a relatively new, efficient gas boiler that’s working well, replacing it solely because electricity is becoming relatively cheaper may not make financial sense. But if your boiler is ageing, you’re renovating or you’re looking to move away from fossil-fuel energy sources like gas or oil, electric heating could be worth exploring.

The good news is that there are several ways you could upgrade your existing heating system to an electric alternative:

• Heat pumps transfer heat rather than generating it directly, potentially offering a lower cost per unit of heat than direct electric systems.
• Electric radiators enable you to heat individual rooms and control the schedule and temperature without relying on traditional wet central heating pipework.
• Electric boilers can provide heating, working with your existing wet radiator system.
• Storage heaters store heat using electricity, where you could potentially store heat when electricity is cheaper on a suitable off-peak tariff, based on when your household relies on it.

For a more detailed comparison on energy sources, read our guide about electric vs gas heating: which is better for your home? For oil-powered homes, you can also weigh up whether switching from oil to electric heating makes sense.

Take back control of your energy supply

Although electricity costs more per unit than gas, the amount of energy you use always needs to be factored in. If you’re considering moving away from gas or oil, our experienced team at Fischer Future Heat can help you explore your options.

Assess your property’s heating requirements and book a free home heating survey and browse our range of electric heating solutions in our free catalogue.

Electricity vs gas FAQs

Is gas still cheaper than electricity?

Yes. Under the October–December 2026 price cap, gas costs 7.97p per kWh compared with 26.32p for electricity. However, the difference has narrowed, and the cost of heating your home also depends on how efficiently your system produces heat and how much energy you use.

How much cheaper is gas than electricity?

Electricity currently costs approximately 3.3 times as much as gas per kWh. In January 2026, that ratio was around 4.7. Standing charges also differ, with households paying separate daily charges for gas and electricity where both supplies are connected.

Is it cheaper to run electric or gas heating?

The final cost of running electric or gas depends on the system. At current unit rates, direct electric heating generally costs more per kWh of useful heat than an efficient gas boiler. However, an appropriately performing heat pump can have a similar or lower cost per unit of heat. Your tariff, insulation, heating controls and usage also affect the final bill.

Which bill is usually more expensive, gas or electric?

In a typical dual-fuel home with gas central heating, gas spending can be higher during winter because space heating uses substantial amounts of energy. However, the answer depends on the household’s heating system, electricity consumption, tariff and how much energy is used.

Will electricity become cheaper than gas?

Electricity remains more expensive per kWh, and there is no confirmed date when that will change. Recent policy changes have narrowed the price gap, but future electricity and gas prices will depend on wholesale markets, government policy and the energy price cap.

Is gas central heating being phased out?

The UK is moving towards lower-carbon heating, particularly in new homes. However, there is currently no general requirement for homeowners in existing properties to remove a working gas boiler. Requirements for new-build heating systems are separate and should be checked against the latest government guidance.

When will the gas standing charge be removed?

The government plans to remove the gas standing charge in 2027, or as soon as possible after, with the cost moved onto the gas unit rate instead. No exact date has been confirmed yet, but MoneySavingExpert expects it to coincide with a price cap change on 1 October 2027 or 1 January 2028. Electricity standing charges stay for now.

What are the disadvantages of electric heating?

The main disadvantage of direct electric heating is the higher electricity unit price compared with gas, which can make running costs higher. However, electric heating doesn’t require a gas flue or involve on-site combustion, and some systems offer individual room controls. The right choice depends on the property, tariff and heating requirements.

Is electric heating right for your home?

Electricity is still more expensive than gas per unit, but the gap is narrowing. For homeowners considering a heating upgrade, look beyond the unit price and think about how much heat the property needs, which rooms are used and how effectively the heating can be controlled.