Oil vs gas vs heat pump running costs

Why published comparisons mislead

A comparison of heating costs has to hold something constant, and what gets held constant determines the answer.

• They assume a building. Usually a notional, reasonably insulated one. If yours is a solid-wall Norfolk cottage, the assumptions do not hold.
• They assume a system efficiency. For a heat pump in particular, efficiency depends enormously on the flow temperature your emitters require – which is a property of your building, not of the heat pump.
• They use a price snapshot. Electricity and heating oil prices move independently and the ranking can change.
• They ignore standing charges and tariff structure, which matter considerably for electricity.
• They ignore the existing system’s actual condition. An untuned oil boiler is not performing at its rated efficiency.
• They compare fuel cost per unit of energy rather than cost per unit of useful heat delivered, which is the only meaningful measure.

None of that makes them dishonest. It makes them a starting point that needs your numbers substituted in.

The method

1. Establish your building’s annual heat demandFrom a room-by-room heat loss calculation plus an estimate of annual hours, or from actual fuel consumption if you have records. The second is more reliable if you have it.
2. Establish what flow temperature your emitters needThis is the crux. A house that can be heated at a low flow temperature is a completely different proposition for a heat pump from one that needs high temperatures.
3. Work out each system’s real efficiency in your buildingAn oil or gas boiler’s seasonal efficiency, corrected for whether it actually condenses at your flow temperature. A heat pump’s seasonal coefficient of performance at your required flow temperature and your climate.
4. Convert heat demand to fuel inputDemand divided by efficiency, in the units each fuel is sold in.
5. Apply current pricesIncluding standing charges, and any tariff structure that applies.
6. Compare cost of delivered heatNot cost per unit of fuel.
7. Consider hot water separatelyIt has a different demand profile and, for a heat pump, a different efficiency because it needs a higher temperature.

What dominates the answer

What the tool will and will not do

It will take your building’s demand, your emitters’ required flow temperature, and current prices you enter, and produce a comparison of delivered heat cost across the options.

It will not publish fuel prices. We have no licensed source for heating oil price data, and we will not publish figures we cannot stand behind – see what things cost. You enter the prices you can actually obtain, which is more accurate anyway.

It will not tell you what to do. Running cost is one input among several – capital cost, disruption, carbon, resilience, hot water performance and how long you are staying all matter.

The honest summary for Norfolk

Without publishing numbers, this is the shape of it for the housing stock in this county:

• A well-insulated house with generous emitters that can run at a low flow temperature is a good heat pump candidate, and the running cost comparison is genuinely competitive.
• A solid-wall house with small radiators needing high flow temperatures is a poor heat pump candidate on running cost, and a good candidate for fabric work first.
• An untuned oil boiler in a poorly insulated house is the most expensive option of all, and improving it is the cheapest saving available.
• Flow temperature is the hinge. Everything turns on it, and it is determined by your emitters and your building rather than by the heat source.
• The middle path – improve the system now for a lower flow temperature, run the existing boiler on it, and leave the house heat-pump-ready – is a genuinely sensible position for a lot of properties.

See oil vs heat pump for an off-grid Norfolk home for the full comparison.