Are oil boilers expensive?

Heating oil and LPG are really common ways to heat a home if you live off the gas grid. The question is, how does it stack up in price terms? It can be a little tricky to know what you are spending, as there are no meters.

How much does oil cost?

This is obviously going to vary depending on your supplier, your location, perhaps the size of your tank. A DEFRA report states a typical price in 2012 of 7.9p/kWh, which puts it much cheaper than electricity, which can be as much as 15p/kWh, and more expensive than gas, which is typically around 4p.

That is why you don’t see oil boilers in towns – there is no sense in it because the cost is about twice as much as gas, which is widely available in built up areas. Out of town however, it is a viable option and there are thousands of these boilers all over the country.

Space needed for fuel

Another reason for not seeing oil boilers in towns is that the fuel storage tanks are usually pretty large – enough to last you through a whole month in winter for instance. There just isn’t the sort of space for this in towns. Although electricity is more expensive, it is found often in flats simply because it takes up so little room in a property that already has space restrictions.

Is oil heating reliable?

Oil boilers work in a very similar way to gas boilers, and you can expect the same sort of breakdown frequency as you would for a gas system. That means that they are usually fairly reliable and produce a good level of heat, suitable for any home. There are cheaper ways to heat the home however, so how does it stack up when compared to the competition?

Alternatives to oil

There are a few different options that could be used in place of oil:

  • Heat pumps – These run off electricity, but because of their taking advantage of the inherent heat in the atmosphere, they are actually a lot cheaper to run than an electric heater. We estimate that an air source heat pump will cost around 5p/kWh, whilst a ground source heat pump will be even cheaper, getting down to around 4p/kWh. You will also benefit from the Renewable Heat Incentive (RHI) payments. They will cost more to install than an oil system however!
  • Infrared – This is another form of electric heating that relies on the efficiencies of radiant heating. It will cost around 12-15p/kWh, depending on the price of your electricity, but the way it heats a room means that you will need less electricity than a convection heater.
  • Biomass – This is a wood burning or pellet burning boiler. The advantage is a low 4p/kWh cost of the fuel, and an easy integration into your central heating. The major disadvantage is the space requirement and the regular maintenance and fuel delivery, although this is something oil boiler owners have to deal with anyway.
  • Storage heaters – These are a little outdated nowadays, but they can still be used to heat your home. They are money saving because they take advantage of the cheaper night time tariff, but they can be difficult to control, and they are not really ideal for those who are out all day, as the stored heat disperses over the course of the day, heating your property when you don’t need it.

Here is a little table that illustrates the advantages and disadvantages of each type of system:

Initial Cost Running Cost Maintenance Hot Water
Oil Boiler Moderate Moderate Moderate Yes
Heat Pump Moderate to High Low Moderate Yes
Biomass High Low High Yes
Infrared Low Moderate Low No
Storage Heaters Low Moderate Low No
Electric Rads Low High Low No

There isn’t really a one-size-fits-all solution. Some people may want to minimise their upfront cost, whilst others use a lot of hot water and want a solution that maximises their savings on hot water. Others want to take advantage of the RHI and can produce good returns this way. Some have the space for a biomass system whilst others don’t and want to minimise the space their heating uses up.

What you can be sure of is that there probably is a better solution than oil heating for your property.

Installing a new boiler

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