23/05/2014
When the chill sets in across the UK, keeping your home warm and cosy becomes a top priority. With heating costs often making up over half of household energy bills, understanding your options is crucial. For many, especially those not connected to the main gas grid, oil central heating presents a viable solution. But what's the real cost of keeping your home warm with oil, and how does it stack up against other popular heating methods like gas and electricity? This comprehensive guide delves into everything you need to know, from initial installation expenses to ongoing running costs, alongside practical advice on making your heating more efficient and affordable.
Understanding Oil Central Heating Costs
Opting for an oil central heating system involves two primary cost considerations: the upfront installation and the ongoing running expenses. Both factors are influenced by various elements, making a precise figure difficult without a specific survey, but we can provide robust estimates and insights.
Installation Costs of an Oil Central Heating System
Installing a new oil central heating system from scratch can be a significant investment. Unlike gas, which is piped directly into your home, oil requires the installation of a storage tank, typically in your garden, which adds to the complexity and cost. For a complete oil-fired boiler system, including the boiler itself, pipework, radiators (if needed), and the oil storage tank, you could expect to pay in the region of £4,000 to £6,000. This figure can fluctuate based on the size of your property, the type of boiler chosen, and the specific installation requirements for your tank, such as groundwork and accessibility for deliveries.
Running Costs: Oil Per Kilowatt-hour (kWh)
The cost of heating oil per kilowatt-hour (kWh) is a key metric for understanding your ongoing expenses. As of April 2023, and reflecting the UK Government’s Energy Price Guarantee, the average price of heating oil has been cited as cheaper per kWh than gas. Historically, in November 2021, oil was around 4.82p per kWh in England, Scotland, and Wales. It's important to remember that these prices fluctuate with global demand and supply, so checking current market rates is always advisable. However, the general consensus is that oil remains a more affordable option than electric heating.
Oil vs. Gas vs. Electric: A Cost Comparison
To truly appreciate the cost of oil central heating, it's essential to compare it with its main competitors in the UK market: natural gas and electricity.
Gas Central Heating
Gas central heating is the most prevalent heating method in the UK, used by approximately 23 million homes. Its popularity stems from its convenience and historical affordability.
- Running Cost: Historically, gas has been the least costly option, priced at around 4.65p per kWh (November 2021).
- Installation Cost: A gas combi boiler installation typically ranges from £2,500 to £4,000. However, if your home isn't on the National Grid, connecting can be prohibitively expensive or even impossible.
- Advantages: Piped directly into your home, no storage needed, simple to control, and modern condensing boilers are highly efficient.
- Disadvantages: It's a fossil fuel contributing to global warming, new gas boiler installations are being phased out (no new ones after 2025), annual servicing is essential, and there are potential dangers from leaks.
Electric Central Heating
Electric heating is less common for whole-home heating due to its higher running costs, though it's often used in properties without gas mains access.
- Running Cost: Significantly higher than gas or oil, at around 20.06p per kWh.
- Installation Cost: Generally less costly than gas or oil systems, with electric storage heaters costing approximately £150 - £700 per heater. Underfloor electric heating can be more expensive to install.
- Advantages: Most homes can connect to the electricity grid, minimal maintenance, silent operation, and compatible with smart technology. Energy plans like Economy 7 or Economy 10 can offer lower rates during off-peak hours.
- Disadvantages: High electricity bills, and a significant portion of grid electricity is still generated from gas-fired power stations, meaning higher carbon emissions.
Oil Central Heating
For homes off the gas grid, oil remains a popular and often cost-effective choice.
- Running Cost: As mentioned, around 4.82p per kWh (November 2021), generally cheaper than electricity.
- Installation Cost: £4,000-£6,000 for a full system.
- Advantages: Can be delivered anywhere, efficient with modern boilers, less explosion risk than gas, and the ability to stock up when prices are low.
- Disadvantages: Like gas, it's a fossil fuel with high carbon emissions. The UK government plans to phase out new oil boiler installations after 2025 as part of the net-zero carbon by 2050 target. Requires space for a large storage tank and regular monitoring of oil levels. Annual boiler and tank maintenance is necessary.
Installation Cost Comparison Table
Here's a quick overview of approximate installation costs for various heating systems:
| Heating System Type | Approximate Installation Cost (UK) |
|---|---|
| Electric Storage Heating (per heater) | £150 - £700 |
| Gas Combi Boiler | £2,500 - £4,000 |
| Oil Fired Boiler System | £4,000 - £6,000 |
| Air Source Heat Pump | £2,000 - £9,000 |
| Ground Source Heat Pump | £14,000 - £19,000 |
Factors Impacting Oil Heating Costs
Beyond the per-kWh price of oil, several factors can significantly influence your overall oil heating bill:
Boiler Efficiency
An older, inefficient oil-fired boiler can consume far more fuel than a modern condensing model. While oil is an efficient fuel, the boiler itself plays a huge role in how much of that energy is converted into heat for your home. Upgrading to a newer, more efficient boiler can lead to substantial long-term savings.
Regular Servicing
Both your oil boiler and storage tank require annual maintenance. Professional servicing ensures your boiler operates at peak efficiency, preventing costly breakdowns and extending its lifespan. It also helps identify any potential issues with your tank, such as cracks or leaks, before they become major problems. Neglecting servicing can lead to higher running costs and expensive repairs.
Oil Tank Condition and Placement
The condition of your oil tank is crucial. Cracks or damage can lead to leaks, which not only waste expensive fuel but can also cause environmental damage and require costly clean-up. Ensuring your tank is well-maintained and appropriately sized for your needs can save money in the long run. The location of your tank also needs to allow for easy access for delivery lorries.
Bulk Buying
One of the unique advantages of oil heating is the ability to buy in bulk. When oil prices are low, you can fill your tank to take advantage of more favourable rates, potentially saving money over the winter months when demand (and often prices) are higher. This requires careful monitoring of market prices and having sufficient storage capacity.
5 Ways to Save Money on Your Heating Bill
Regardless of your heating system, there are universal strategies you can employ to reduce your energy consumption and lower your bills.
1. Switch to a Better Energy Tariff
Many households remain on default, often expensive, energy tariffs long after their initial fixed-term deals expire. Regularly comparing energy suppliers and switching to a more competitive tariff can lead to significant savings. Even if you don't use mains gas or electricity for primary heating, you still consume these for other household needs.
2. Take Control of Your Heating
Being mindful of how and when you heat your home can dramatically cut costs and carbon emissions.
- Lower Your Thermostat: Even a one-degree reduction in your thermostat setting can make a noticeable difference to your bill and carbon footprint. If every UK household lowered their thermostat by just one degree, it could prevent millions of tonnes of carbon from entering the atmosphere annually.
- Time Your Heating: Use your heating controls to ensure your system is only on when you need it. There's no point heating an empty home. Set timers to come on before you arrive home and turn off after you've gone to bed.
- Zone Your Rooms: Not all rooms need to be at the same temperature. Use thermostatic radiator valves (TRVs) to adjust the heat in individual rooms, keeping living areas warm and bedrooms cooler, for example.
3. Track Your Energy Use with a Smart Meter
A smart meter, coupled with an In-Home Display (IHD), provides real-time insights into your energy consumption. This immediate feedback helps you identify energy-wasting habits and make informed decisions to reduce your usage, leading to direct savings on your bills.
4. Insulate Your Home
Effective insulation is one of the most impactful ways to make your home more energy-efficient. Loft insulation, cavity wall insulation, and draught-proofing are relatively inexpensive and offer quick returns on investment. More significant investments like external wall insulation and double-glazing can also drastically reduce heat loss, though they have longer payback periods.
5. Get a Smart Thermostat Installed
A smart thermostat offers enhanced control over your heating system, allowing you to adjust temperatures remotely via your phone, tablet, or other devices. Many smart thermostats also learn your habits and can optimise heating schedules, further improving efficiency and reducing waste.
Green Alternatives to Traditional Heating Systems
As the UK moves towards a net-zero carbon future by 2050, exploring low-carbon heating solutions is becoming increasingly important. While oil boilers are being phased out for new installations after 2025, there are several greener alternatives to consider:
- Air Source Heat Pumps: These extract heat from the outside air, even in cold temperatures, and use it to heat your home and hot water. Installation costs range from £2,000 to £9,000, and government grants may be available to help with the upfront expense.
- Ground Source Heat Pumps: Utilising the consistent warmth of the earth, these systems are highly efficient and low maintenance. However, they come with a higher installation cost, typically between £14,000 and £19,000, due to the need for groundworks. Grants can also help offset these costs.
These solutions represent a significant step towards more sustainable home heating, reducing reliance on fossil fuels and lowering your carbon footprint.
Frequently Asked Questions (FAQs)
Does gas have any advantages over heating oil?
Yes, gas offers the convenience of being delivered on-demand directly into your home via the National Grid, meaning no need for a storage tank or the associated maintenance and refilling vigilance. However, its major disadvantage is its limited availability to homes not connected to the grid.
Can you change oil heating to gas?
Converting from an oil heating system to gas is possible if your home can be connected to the National Grid. This process can be costly, involving the expense of connecting to the gas mains, purchasing and installing a new gas boiler, and the removal of your old oil system and tank.
How do oil and gas prices compare to electric heating?
Historically and currently, both oil and gas heating are cited as significantly cheaper per kWh than electric heating for warming an entire home. Electric heating tends to be the most expensive method for primary home heating.
Why are gas prices so high when oil prices are down?
Gas and oil prices are influenced by different market dynamics, although both are impacted by global events. Gas prices have remained high due to higher demand, especially in Europe where Russia is a major supplier. Limitations caused by geopolitical events mean more countries are competing for a smaller supply pool of gas, driving prices up. While Russia is also a key oil supplier, there are generally fewer constraints on global oil supply as more countries produce domestic kerosene heating oil compared to gas.
Wrapping It Up
Understanding the costs associated with oil central heating is vital for UK homeowners, particularly those off the main gas grid. While installation can be a significant investment, oil generally offers a more economical running cost than electricity and can be comparable to gas, especially with recent market fluctuations. By focusing on boiler efficiency, regular maintenance, smart energy management, and comprehensive insulation, you can significantly reduce your heating bills. Moreover, as the energy landscape evolves, exploring greener alternatives like heat pumps will become increasingly important for a sustainable and cost-effective future.
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