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With energy bills rising, chances are you’re looking for ways to spend less on fuel. So, what are your options and how do you balance comfort, cost and environmental impact? Whether you’re wondering: Is oil cheaper than gas? or you’re joining the electric boiler versus oil boiler debate, read on for domestic heating facts and tips.
What fuels are available for heating?
There’s no single way to keep your home cosy. You’ve got a choice of fuels - and you can also use a combination.
- Natural gas - a fossil fuel made of living matter that existed millions of years ago. UK gas comes from the North Sea, Norway, the Middle East and North Africa
- Electricity - includes renewable sources, nuclear power, burning fossil fuels and some imported electricity
- Oil - also a fossil fuel and tends to be more expensive than gas. The two main kinds are kerosene (the most efficient) and gas oil (less common)
- LPG (liquid petroleum gas) - either propane or butane
- Coal-based solid fuels - includes smokeless coal, bituminous or ‘house coal’ (the most common) and anthracite, the highest grade
- Biomass - a renewable source of organic matter in solid or gas form e.g. wood pellets, animal waste, methane
- District heating - uses hot water mains to deliver heat directly into homes. Not used often in the UK.
If you want to spend less on your heating fuel, think about:
- The cost of equipment installation
- Monthly charges
- The cost of servicing
- Convenience
- Availability
- CO2 emissions.
What domestic fuel is most commonly used in the UK?
Natural gas is the most widely-used heating fuel in the UK and is also the cheapest option available to consumers. However, not all homes are on the gas network.
Gas is a fossil fuel, which means it was formed from the remnants of living matter from millions of years ago. It's the cleanest of the fossil fuels - for each unit of energy or heat delivered, the CO2 emissions are half that of oil, and a third of those produced by coal.
Where does natural gas come from?
Britain's gas comes from its own gas fields in the North Sea, and from Norwegian gas fields. It also comes to coastal terminals from the Middle East and North Africa in compressed or liquefied form.
Is gas a cost-effective domestic fuel?
There are a number of gas suppliers and this competition helps ensure that gas is competitively priced. It's also easy to compare gas and electricity prices (though the current energy market means not many deals are available) and switch to get the best deal for your needs.
Because gas is so popular, equipment that uses it — like boilers and hobs — are typically cheaper than similar equipment for other fuels. Gas is also easy to control — you can turn it on and off, and it delivers heat quickly when required.
Advantages and disadvantages of gas
Gas unit rates are much cheaper than electricity unit rates.
CO2 emissions of gas are half that of oil and a third of coal.
Gas delivers heat quickly and is easy to control.
If you’ve got a smart meter, you only pay for the gas you actually use.
Prices of gas can fluctuate, meaning your bills can go up.
Gas leaks can be very dangerous.
Gas is a fossil fuel that will run out.
Is oil heating cheaper than gas?
Around 1.5 million homes rely on domestic heating oil. It’s generally more expensive than gas, but may be the cheapest option for rural homes without a gas supply.
That said, oil prices fluctuate with wholesale markets so always compare heating oil prices and the latest gas deals if you want to spend less on fuel.
There are other factors that can impact the cost of oil heating too, including the efficiency of your boiler and the condition of your storage tank. Leaks can be expensive.
Servicing a gas boiler tends to be cheaper than an oil boiler service. Modern gas condensing boilers are also more energy efficient than the average oil boiler.
Gas prices are subject to Ofgem’s energy price cap, a limit on the unit rates and standing charges that energy suppliers can charge for standard variable tariffs. This is reviewed every three months and has an impact on current gas prices.
Advantages and disadvantages of oil
Oil can be delivered anywhere, providing a constant source of fuel.
Oil is less explosive than gas and therefore safer.
When prices are low, you can buy oil in bulk.
Oil's carbon emissions are two-thirds less than those of coal.
Oil has around double the carbon content and emissions of gas per unit of heat delivered.
Oil needs to be delivered in bulk and stored. You may also need to monitor your usage so you know when to order more.
It can make budgeting more difficult as payments are often made on delivery, although some suppliers allow you to spread payments.
You need room for the storage tank with plenty of ventilation space around it.
An oil-fired boiler is typically more expensive than the gas equivalent, so oil-fired central heating is rare.
How can I get the best heating oil deals?
The best way to secure relatively cheap domestic oil prices is to keep an eye on wholesale prices.
Oil prices tend to be more flexible than gas prices, so wait for cheaper rates before signing up to an annual contract.
Typically, oil suppliers make a minimum profit of around 4p per litre, so if the price you secure is anything like wholesale costs + 4p, then you’ve got yourself a good deal.
LPG or oil - which is better?
Liquid petroleum gas (LPG) is another off-grid option, though not often used. But it is an alternative to oil in rural areas where there’s no mains gas.
There are few suppliers, Calor Gas being the best known. Delivery is either into a tank or in bottles, and the cost is similar to oil, although typically slightly higher.
Some gas central heating boilers, gas fires and cookers burn LPG as well as gas, giving LPG an advantage over oil. LPG also has lower carbon emissions than oil.
Electric boiler vs oil boiler - which is right for you?
Electric boilers are an option if you’re off the gas grid. Because there’s no flue, you also have more flexibility over where you install them.
Compared to oil boilers, electric boilers are:
- Easy to install and maintain
- Designed for smaller homes
- Flexible enough to allow you to take advantage of cheaper time-of-use tariffs
- Often a greener choice.
An oil boiler could be the better choice if:
- You’re looking for lower installation costs.
- You have more than one bedroom and over ten radiators
- You want to pay less each month. Oil is typically cheaper than electricity.
How do electric storage heaters work?
Storage heaters use cheap, off-peak electricity -- available with an Economy 7 tariff -- to heat up high thermal capacity bricks inside the storage heaters, and this heat is then released the following day.
The difficulty with storage heaters is that there is very little control over the release of the heat, and if it's insufficient it has to be topped up with heat produced from peak-rate electricity.
However, if the topping up is kept to a minimum, storage heaters offer a cost-effective means of warming a home if it doesn't have a gas supply.
How do Economy 7 and time-of-use tariffs work?
Time-of-use tariffs like Economy 7 give a set number of hours of cheap electricity through the night, with electricity used during the day charged at a higher peak rate. Find out more about Economy 7.
Is electricity a green energy option?
Around 50% of electricity comes from zero-carbon sources, making it a potential green energy source.
Renewable electricity sources now make up 43% of the UK supply, but 35% is still generated by burning fossil fuels including natural gas, oil and LPG.
However, the government aims to eliminate carbon emissions and achieve net zero by 2050, as part of its energy security strategy.
Are there more eco-friendly ways to use electric heating?
Due to the amount of waste heat produced in electricity-generating power stations, electric heating comes with a high carbon footprint. It’s around three times that of gas and twice those of oil-fired central heating, per unit of heat delivered.
Heat pumps, an alternative to traditional boilers, have given electric heating a greener outlook. All new-build properties from 2025 onwards will have a heat pump (or other low-carbon heating system) installed.
What is a heat pump?
There are three kinds of air pump, which all extract heat from natural sources and transfer it to your home. These include:
- Air source heat pumps (ASHP) - the most common, relatively small and easy to install. Costs around £14,000.
- Ground source heat pumps (GSHP) - you’ll need a garden or large outdoor space. Costs £28,000 to £57,000.
- Water source heat pumps (WSHP) - a kind of ground source heat pump which draws heat from a nearby water source. Costs £6,000 to £11,000.
Heat pumps generally produce around three times more energy than they take in – 300% efficient, according to Energy Saving Trust. In some instances, heat pumps may produce fewer CO2 emissions than gas.
Find out how much heat pumps cost.
Government grants of up to £7,500 are available to make the cost of installing an air pump more manageable. The amount you get depends on where you live.
How do air source heat pumps work?
Reducing your carbon footprint by 13% a year, air source pumps absorb heat from the environment and transfer it into your home - even in freezing temperatures.
Find out more about air source heat pumps.
How do ground source heat pumps work?
Ground source heat pumps are more energy efficient, drawing heat from fairly consistent below-ground temperatures. Although upfront costs are high, ground source heat pumps need little maintenance and can be cost-effective to run if you’re not on a gas network.
Find out more about ground source pumps.
How do water source heat pumps work?
Water source heat pumps use the heat energy from water to provide heating and hot water for your home.
They’re either:
- closed loop systems, which use lakes, lochs, or large ponds as the water source
- open loop systems which use boreholes near rivers or areas with the right geological conditions.
Is coal still an option for heating?
A few decades ago, coal was the default choice of domestic fuel in the UK, but its use has fallen with the development of modern central heating systems. However, it's still used in smokeless forms in solid fuel stoves, which tend to be used as a feature in living rooms.
As with oil, coal presents some issues with storage and it can be cumbersome to move it from its storage place to feed a boiler, although some coal-fired boilers have gravity feed options to lessen the need for topping up.
The introduction of smoke control areas — previously known as smokeless zones — means that only smokeless varieties can be burnt.
What does biomass mean?
Biomass as a fuel consists mainly of wood. Wood is a low energy density fuel — you get less energy from a greater quantity — so a lot of storage space is needed if you have a biomass boiler.
This type of boiler is a feasible option if you live near woodland or you have access to waste wood, otherwise it can prove to be expensive. If you have to buy wood that has been transported considerable distances then it's no longer zero carbon.
Wood is often used as an additional or secondary fuel in a home - either burnt in a solid fuel stove or a traditional open fire.
Wood chip is available also for use in domestic boilers, where an auto-feed facility can provide heat lasting for a few hours.
What are the advantages of district heating?
District heating involves the supply of hot water through hot water mains to homes and businesses - the hot water feeds into the domestic pipework to warm radiators and provide hot water in the home. It eliminates the need for an individual boiler in the home, but a heat exchanger is required.
Popular in northern and eastern Europe, examples of district heating schemes in the UK are currently limited, but more are likely to be constructed over the next few years.
District heating uses large centralised boilers that can also generate electricity. Therefore, the cost of both electricity and heat can be reduced, and carbon emissions are considerably reduced as well.
Are there other natural ways to heat my home?
Sunlight naturally heating your home through windows is called solar gain. To maximise its potential as a heat source, you need large, south-facing windows.
During the day building materials such as concrete, stone, brick and tiled floors absorb and store heat from the sun. Then they release it later. The more effectively they do this, the higher their thermal mass. In conjunction with good home insulation, it’s a natural way to keep inside temperatures comfortable.
Solar gain and thermal mass are free, but taking advantage of them may require some major refurbishment.
To be even greener, you can use solar panels or choose a green energy supplier. The Uswitch Green Accreditation will help you make the right choice.
