Energy crisis: air source heat pump vs. oil boiler running costs

by Mars

I had massive concerns in February 2021 about the potential running costs of air source heat pumps (which I expressed in this post) as electricity tariffs started to edge up. As it turns out my fears of electricity at 17p per kWh were way off the mark, and little did I know that 18 months later our tariff would be 29p/kWh, 52p/kWh as of October, and probably over 70p/kWh by this coming January.

With OFGEM’s latest announcement, as we head into the winter, the situation is more worrying than ever. So let’s break things down because we’ve been inundated with questions about the running costs of air source heat pumps and how the rising electricity tariffs impact them, and how it compares to running an oil (kerosene) boiler.

Looking at our data from January 2021 (which was a cold month for us) when we heated the house exclusively using our heat pump, we consumed 2,231 kWh of electricity, just for the air source heat pump, equating to around 72kWh per day.

To put things in context, our property is around 400 square metres with a mixture of UFH and radiators, and we set our target temperature at 21C. In January 2021, which feels like an eon ago, we were paying 11p per kWh.

In January 2022, we primarily ran off HVO which in heating output terms is virtually identical to kerosene – it’s just much cleaner as a fuel with 88% less CO2 emissions. This gives us a great comparison to work from. We were getting through around 500-550 litres per month to heat the entire house and water. It’s worth mentioning that we ran our system with a flow temperature of 45C and maintained a target temperature of 21C.

So let’s do some basic maths. Using our heat pump data from January 2021, if we heated the house using the heat pump exclusively on the newly announced tariff of 52p/kWh (the UK average) this would cost us a staggering £1,160 per month.

By comparison, 500 litres of kerosene would cost us around £425 per month based on the most recent price of £0.85 per litre from our local oil club. Just for context, HVO would cost us between £1,200-£1,400 per month which is largely due to the UK government’s perplexing reluctance to remove duties and levies off this fuel for home heating.

As a result, HVO won’t be a financially viable option for most rural households in the UK this winter, but organisations like OFTEC and UKIFDA are hard at work and are also trying to get import tariffs lifted off US HVO (the United States is now the largest HVO producer) which would increase competition and reduce prices.

We have no point of reference on heating our property with gas, but the European gas benchmark now trades at what would be an equivalent of $410 per barrel of crude oil, which will be of definite concern to many households across the UK, and it’s this inflated price that has had such a devastating economic impact on much of Europe and the UK.

But we digress. If you currently heat your home using kerosene and are considering a heat pump, it’s going to be a tough decision to make. In our case, it’ll be much cheaper to run off kerosene. It’s not good for the planet, but it’s not going to drain the bank account. The heat versus eat dilemma is real, with millions of households that are bound to fall into fuel poverty this winter.

We’re massive believers in being green, but we need to be realistic, and the other factor that has to be considered is the source of electricity. It’s far from green most of the time, especially when the wind stops blowing.

Looking at our electricity sources for the past few weeks it’s been a steady source of gas, up to 95% on certain days. In most parts of England it’s been gas, nuclear and coal is gaining in traction. So the air source heat pump is not that clean a lot of the time, especially if you’re solely powering it from the grid.

In my opinion, this is going to be biggest challenge for heat pump owners this year. For us, the heat pump must run 24/7 when temperatures drop into single digits. When it does, the house remains cosy. If we turn it off for a few hours or have a power outage, the heat-losses kick in, and the house cools. If we leave the heat pump off for a day, it’ll take us 24-36 hours to get the house back to temperature if the outside temperature is under 7C. It’s not ideal, unless you have HT air source heat pump, which we don’t.

Just like gas, kerosene and HVO work much faster. We can get cold rooms to temperature in a couple of hours still using a flow temperature of 45C. If we raise that to 50C, the coldest rooms (where we have K3 rads) are warm again in 30-60 minutes.

If the scheduled blackouts that are predicted in the UK come to fruition, this’ll have an impact on homes heated by heat pumps. With kerosene or HVO you also have the option of turning the heating off on milder winter days, which saves fuel. That’s not really realistic for our heat pump and our house.

Obviously, if you’ve invested in batteries, PV and are on a time of use tariff, this can be more favourable when it comes to running an air source heat pump, but that is a significant investment.

So we’re all faced with serious decisions to make this winter. How are we going to stay warm and not drain the bank account? Do you use a log burner to supplement your heating? Do you turn the thermostats down and invest in thermals and wooly jumpers?

We’ve now insulated the house as much as we can and we’ll be using the log burner to help heat our kitchen and living room. We’ll move our TV into the living room and turn down the thermostats in rooms we don’t use. We’ll also run our heat pump bivalently, and it’s going to be an exercise in heating efficiency, coupled with wearing mohair socks and thermals.

One thing that is undeniable is that environmental sustainability, climate change and the well-being of the planet will take a back seat this winter as many homes will burn fossil fuels to heat their homes in one way or another.

Let us know what your heating strategy is for this coming winter by leaving a comment below.

Notify of
Inline Feedbacks
View all comments

You may also like