Is it cheaper to heat my home with gas or electricity?

Is it cheaper to heat my home with gas or electricity?

Is it cheaper to heat my home with electricity or gas?

We get asked this question on a regular basis – and on the face of it, it has a very simple answer.

To buy one unit of mains gas (measured in kWh) you will pay about 4p / kWh. Conversely, one unit of electricity from the mains (also measure in kWh) will cost you about 15p / kWh.

This means that gas is about 3-4 times cheaper than electricity per kWh.

However, there are other factors at play making the comparison far less black and white.

Gas boilers are not 100% efficient

This is the first thing that slightly complicates direct comparisons; while an electric radiator will turn 1 kWh of electricity into 1 unit of heat (i.e. they are 100% efficient), boilers won’t – even a brand new boiler will only be about 90% efficient.

Even though the efficiency of a new gas boiler is not as high as an electrical equivalent, based on the fact it is so much cheaper for each unit of gas, mains gas still wins! It doesn’t really make a difference to the equation.

What if you can’t access mains gas?

Of course, many properties across the UK don’t have access to grid gas. These people can still run their home on gas, but it will be in the form of LPG (discussed below), and will almost certainly be more expensive than accessing it from the mains.

What can you do if you don't have one of these? Gas Meter

What can you do if you don’t have one of these? Gas Meter

However, it is more common for households living without mains gas to heat their homes using either heating oil or electricity as the fuel source. Recently there has even been a shift that has seen more people using biomass as a heating source. This has become an attractive option since it includes a subsidy payment for every unit of hot water produced – this is known as the Renewable Heat Incentive.

What is LPG gas?

If you live off mains gas, and still want to run a gas boiler, you will have to use LPG. LPG stands for liquefied petroleum gas and is produced from a mixture of hydrocarbon gases (e.g. butane and propane) compressed to form a liquid. The benefit of compressing the fuel into a liquid is that you can store more of it (compared to a gas), and therefore you will get away with a smaller storage tank. LPG tanks can be dug into the ground so as not to ruin the appearance of your garden.
LPG Gas TankLPG is a very reliable and versatile heating solution for homes, provided you remember to refill the tank as required! In addition, the majority of popular central heating boilers come in a version that runs off LPG instead of mains gas, so if you are used to a mains gas boiler you can be confident in the knowledge that you will get identical functionality.

Is heating oil or LPG cheaper than electricity?

Heating oil has a cost of around 6p / kWh, whilst LPG is generally a little higher at 7.6p / kWh.

Once again then, if you need to choose between either of these and the flat rate electricity, then both the LPG and heating oil are a cheaper option.

Of course, if you are on an Economy 7 tariff, paying around 6p / kWh for the night rate and 16p / kWh for the day rate, with a storage heater system, the cost of heating with electricity starts to become more attractive. However, due to the increased day cost of electricity any appliance run throughout this period will be higher. This means that you will have to use around 40% of your electricity at night to make the numbers work, highlighting the fact that Economy 7 isn’t for everyone.

Is bottled gas cheaper than electricity?

Bottled gas can come in the form of butane or propane, and is typically used with portable gas fires. Costs vary wildly depending on the volume you buy, but the typical sizes of gas bottle range from small 6kg canisters to larger 47kg bottles. As with most commodities, the more you buy, the cheaper the cost. But how does bottled gas compare to electricity as a heating fuel?

In this section we are going to look at the cost of three different sizes of bottled gas canister. These prices were all found on the Internet and are all Calor gas canisters (a brand that we hope most people will be familiar with).

So before we start we have to bear in mind two things:

  1. The energy contained in propane is 46.44 megajoules per kg and
  2. 1 kWh is equal to 3.6 megajoules

So for a 6kg Calor gas refill costing £24.50:Calor

6 x 46.44 / 3.6 = 77.4kwh in 6kg

£24.5 / 77.4kWh = 31.6p / kWh

For a 13kg Calor gas refill costing £33.00:

13 x 46.44 / 3.6 = 167.7kwh in 13kg

£33 / 167.7kWh = 19.7p / kWh

For a 47kg Calor gas refill costing £85.00:

47 x 46.44 / 3.6 = 606.3kwh in 47 kg

£85 / 606.3kWh = 14p / kWh

So buying Calor gas to heat your home is a lot more expensive than pretty much any other option, especially when you factor in an efficiency rating of less than 100%. If you can buy the larger Calor containers, you will be paying around the same as electric heating, but due to other options generally being available, we tend to advise people to stay away.

Renewables vs. Electricity

If you can afford the upfront cost, either a biomass boiler or a heat pump could be the best heating option for your home. Both of these technologies are considered renewable sources of heating, therefore entitling them to the Renewable Heat Incentive scheme, which pays the owner an amount for each kWh of hot water produced – more on this scheme can be found here.

A heat pump will have a coefficient of performance (COP) of approximately 3.5. This means that for every 1 unit of electricity used it produces 3.5 units of useful heat. So if one unit (kWh) of electricity costs 15p, every unit of useful heat works out at just over 4p. This brings it very much in-line with mains gas heating.

With the biomass boiler, while the cost of the fuel is relatively high, the renewable heat incentive makes this a winner, numbers-wise. In one property we saw, the RHI over the seven years equated to £49k worth of subsidy on a £22k biomass boiler install – now this was a huge house, but the numbers are still attractive even with far smaller properties.

The FINAL VERDICT – Is it cheaper to heat your home with gas or electricity?

Mains gas is the winner – it is cheaper to heat your home with gas than electricity, provided you can get it from the mains. LPG and heating oil are the runners up, with electricity and bottled gas lagging behind in last place. The Renewable Heat Incentive obviously skews these figures particularly in relation to heat pumps which run off electricity, but as you can see from above, if a home is well insulated it will actually be by far the most effective.

Hopefully this will put to bed the common misconception that heating your home with electric heaters is cheaper than using a combination of gas boiler and radiators.

Table of heating costs in the average home

    • Mains Gas – 4p / kWh
    • LPG Gas – 7.5p / kWh
    • Heating Oil – 6p / kWh
    • Bottled Gas – 14p – 32p / kWh
    • Electricity – 15p / kWh

Installing a new boiler

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