Oil Boiler vs Heat Pump Calculator
Should you keep your oil boiler or switch to a heat pump? Compare running costs, installation expenses, and payback periods based on your property and current energy prices.
Oil Boiler vs Heat Pump: Key Factors to Consider
Oil Boiler Advantages
- Lower upfront installation cost (£3,000-£5,000 for replacement)
- Works well with existing radiator systems
- Reliable performance in all weather conditions
- Familiar technology with widespread engineer support
- Can use HVO (renewable liquid fuel) as a drop-in replacement
Heat Pump Advantages
- Lower running costs (300-400% efficient vs 90% for oil)
- Government grants available (up to £7,500 via BUS)
- Significantly lower carbon emissions
- No fuel storage tank required
- Can provide cooling in summer (reversible models)
Oil Boiler Considerations
- •Oil prices can be volatile (though you can time purchases)
- •Higher carbon footprint than heat pumps
- •Requires regular servicing and tank maintenance
- •Future regulations may favour low-carbon alternatives
Heat Pump Considerations
- •High upfront cost (£10,000-£18,000 for ASHP)
- •May require larger radiators or underfloor heating
- •Efficiency drops in very cold weather (below -5°C)
- •Best suited for well-insulated homes (EPC C or better)
What the Headlines Don't Tell You About Heat Pumps
While our calculator uses manufacturer efficiency ratings, real-world surveys paint a different picture. According to recent reports in The Independent and The Times:
- Two-thirds of heat pump users report higher running costs than their previous heating system
- Many homes require £5,000-£15,000 of insulation upgrades before a heat pump works effectively
- Real-world SCOP ratings are often lower than laboratory tests, especially in older homes
Concerned about the so-called "oil boiler ban"? Read our full analysis of what the 2026 regulations actually mean for your existing system.
Stick with Oil Heating If...
- ✓ Your boiler is relatively new (<10 years old)
- ✓ Your home has poor insulation (EPC D or below)
- ✓ You don't plan to stay long-term (payback >10 years)
- ✓ You prefer to time oil purchases for best prices
- ✓ You're considering HVO (Hydrotreated Vegetable Oil) as a greener alternative
Worried about the "2026 oil boiler ban"? It's not what you think →
Consider a Heat Pump If...
- ✓ Your home is well-insulated (EPC C or better)
- ✓ Your boiler is old and needs replacing anyway
- ✓ You can access the £7,500 BUS grant
- ✓ You're planning home improvements anyway
- ✓ Reducing carbon footprint is a priority
Our Data Sources
Our calculator uses real data from trusted UK sources, updated regularly to reflect current prices and efficiency ratings:
- Ofgem - Current electricity price cap rates (January 2026: 24.50p/kWh)
- BoilerJuice / OilCompare - Average UK heating oil prices (currently ~55-65p per litre)
- Energy Saving Trust - Heat pump efficiency ratings (SCOP), installation costs, and running cost comparisons
- GOV.UK Boiler Upgrade Scheme - Current grant amounts (£7,500 for heat pumps)
- DESNZ Conversion Factors - CO₂ emission factors for heating oil and grid electricity
- OFTEC - Oil boiler efficiency standards and installation guidelines
- MCS (Microgeneration Certification Scheme) - Heat pump performance data and installer standards
Frequently Asked Questions
How much does it cost to run an oil boiler per year in the UK?
The average UK home using oil heating consumes around 1,500-2,000 litres per year. At current prices of 55-65p per litre, this equates to approximately £825-£1,300 per year in fuel costs. However, actual costs vary significantly based on property size, insulation quality, and heating habits. Well-insulated homes may use as little as 1,000 litres, while older, poorly insulated properties could use 2,500+ litres annually.
Is a heat pump cheaper to run than an oil boiler?
Yes, in most cases. Heat pumps are typically 3-4 times more efficient than oil boilers, producing 3-4 kWh of heat for every 1 kWh of electricity used (300-400% efficiency). Despite electricity being more expensive per kWh than oil, this high efficiency means heat pumps usually have 30-50% lower running costs. However, the savings depend heavily on your home's insulation and the heat pump's Seasonal Coefficient of Performance (SCOP).
What is the payback period for replacing an oil boiler with a heat pump?
The payback period varies from 7-15 years depending on several factors. With the £7,500 Boiler Upgrade Scheme grant, a typical air source heat pump costs £7,000-£10,500 after the grant (from a total of £14,500-£18,000). If you save £400-£600 per year on running costs, the payback is around 12-18 years. However, if your oil boiler needs replacing anyway, the payback improves significantly as you're comparing against the cost of a new oil boiler (£3,000-£5,000).
Can I replace my oil boiler with a heat pump?
Most homes with oil boilers can switch to a heat pump, but some factors affect suitability. Heat pumps work best in well-insulated homes (EPC rating C or better) and may require larger radiators or underfloor heating because they operate at lower temperatures. You'll also need outdoor space for the unit. Ground source heat pumps require significant garden space for ground loops. An MCS-certified installer can assess your home's suitability.
What grants are available for heat pumps in 2026?
The Boiler Upgrade Scheme (BUS) offers £7,500 towards air source heat pumps and £7,500 for ground source heat pumps in England and Wales. Scotland has the Home Energy Scotland Grant and Loan scheme offering up to £7,500 in grants plus interest-free loans. You must use an MCS-certified installer to qualify. Check GOV.UK for current eligibility criteria.
How much CO₂ does a heat pump save compared to oil heating?
A typical home switching from oil to a heat pump reduces carbon emissions by 50-70%. Heating oil produces around 2.54 kg CO₂ per litre burned. A home using 1,800 litres of oil annually produces about 4.6 tonnes of CO₂. With a heat pump (using grid electricity at ~0.207 kg CO₂/kWh) providing the same heat, emissions drop to approximately 1.5-2 tonnes per year. As the UK grid gets greener, heat pump emissions will continue to fall.
Do heat pumps work in cold weather?
Modern air source heat pumps work effectively down to -15°C to -25°C, though efficiency (SCOP) decreases as temperatures drop. At 7°C, a typical ASHP achieves a COP of 4.0 (400% efficient). At -5°C, this may drop to 2.5-3.0 (still 250-300% efficient). In the UK's relatively mild climate, this isn't usually an issue. Ground source heat pumps maintain more consistent efficiency year-round as ground temperatures are stable at 10-12°C.
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