Alternatives to liquid fuel

There is currently only a narrow range of low carbon heating alternatives to heating oil. In this section we briefly compare them before looking in more detail at heat pumps, the government’s preferred option.

Low carbon heating for oil heated homes – how do the costs compare?

With the exception of HVO, converting to low carbon alternatives to oil heating means replacing your existing heating system. The current average installation cost of the three main alternatives is:

Technology Average installation cost
Air Source Heat Pump £10,918
Ground / Water Source Heat Pump £22,507
Biomass Boiler £16,114

Unlike boilers, heat pumps work most efficiently when supplying heated water at relatively low temperatures. This means underfloor heating downstairs and/or larger radiators may be necessary to maintain comfortable room temperatures. Avoiding heat loss is also important, so these systems benefit from installation in well-insulated homes.

A biomass boiler is the closest match for an oil heating system, and the existing radiator system can usually be retained. The appliances are often bulkier than a typical oil system, and the solid fuel (i.e. wood pellets) needs to be stored close to the boiler, so a dedicated boiler room and fuel store will usually be needed.  

The government’s preferred option is to convert most rural homes to using heat pumps – a type of electric heating. Heat pumps are extremely efficient, but for many households they could be costly and disruptive to install.

Are heat pumps the right solution for your home?

Fact 1

Costs

Installation costs between £9,000 and £19,000

Fact 2

Running costs

Vary with size and energy efficiency of your home

Fact 3

How they work

Heat pumps operate differently to boilers

Fact 4

Radiators

Existing radiators and pipework may need upgrading

Fact 5

Insulation

Your home needs to be well insulated

Fact 6

Hot water

You will need a hot water tank

Fact 7

Noise and size

Heat pumps are sited outdoors and aren’t silent

Fact 8

Electricity

Heat pumps are only as green as the electricity they use

Heat pumps may be an excellent choice for some of these homes, particularly those that are already energy efficient or when installed as part of a larger renovation project. However, households who already have efficient traditional heating will see little improvement to their quality of life to be motivated to invest in these low carbon alternatives.

We think many households would welcome other, cheaper and simpler low carbon options such as HVO that are better suited to their individual circumstances.

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Fact #1 - Cost

Installation costs between £9,000 and £19,000

A typical air source heat pump system costs between £9,000 and £11,000 to install and a ground source heat pump around £14,000 to £19,000. The process takes about two to three days although significant planning time should be allowed.

If you live in a property with low levels of insulation, you will also likely need to fund additional energy efficiency improvements to your home to bring it up to an adequate standard for effective heat pump use (EPC Band C). This work could take several weeks depending on the level of upgrade. See also Fact 5 – Insulation.

Fact #2 - Running costs

Vary with size and energy efficiency of your home

Running costs will largely depend on the size and how well insulated your home is.

In a newer, well insulated property, running costs may be comparable to oil heating but in homes with poor insulation, installing a heat pump could lead to higher heating bills.

Fact #3 - How they work

Heat pumps operate differently to boilers

Heat pumps source heat from the outside air or ground and boost it to a higher temperature – much like a refrigerator in reverse.

In colder weather a heat pump will need to work harder to heat your home, reducing its effectiveness. This means a well insulated property is essential for adequate heat performance.

Heat pumps also aren’t as responsive as boilers – you can’t adjust the heating so easily and can underperform in very cold snaps like the Beast from the East.

Fact #4 - Radiators

Existing radiators and pipework may need upgrading

Most heat pumps produce heat at cooler temperatures than traditional boilers when working efficiently. You may therefore need to install larger radiators and/ or underfloor heating to maintain comfortable levels.

Your pipework may also need upgrading. If you live in a newer property which has microbore pipes buried in the wall, this process can cause considerable disruption.  

Fact #5 - Insulation

Your home needs to be well insulated

When operating efficiently, most heat pumps produce heat at cooler temperatures than traditional boilers. So it is important to reduce heat loss from your property for effective performance.

If you live in a property with an EPC rating E-G, this will likely mean installing energy efficiency measures such as double glazing, extra loft insulation, cavity wall insulation or external wall cladding, and underfloor insulation, to bring your home up to a suitable standard (EPC Band C).

Government figures estimate the average cost to do this is £12,300 for EPC Band E homes and £18,900 for EPC Band F and G properties.

Fact #6 - Hot water

You will need a hot water tank

If you have a combi boiler, you will need to find space to fit a separate hot water tank. If you already have a hot water tank, the cylinder may need to be upsized to adequately heat the water.

Usually, heat pumps don’t heat water to a safe enough temperature to stop legionnaires disease or other bacteria so the hot water tank will need to use a electric immersion heater to bring the water temperature up to a suitable level.

Fact #7 - Noise and size

Heat pumps are sited outdoors and aren’t silent

Heat pumps are fixed outside your home and may need planning permission is situated close to a neighbour as they can be noisy.

Heat pumps produce a similar noise to air conditioning units (around 40-60 decibels from one metre away so similar to rainfall or a conversation) so you will need to consider whether this would disturb you or your neighbours.

Fact #8 - Electricity

Heat pumps are only as green as the electricity they use

Because you still need electricity to drive a heat pump, these technologies can’t be considered carbon free unless this is provided by a fully renewable electricity. In 2020, approximately 40% of electricity generated in the UK was from wind, solar or biomass.

Additionally, larger heat pumps may require an upgrade to a 3-phase supply as they may not be able to run on your normal single phase electricity connection.