Which type of heating is the most efficient in the UK? Here we compare gas and electricity and common appliances.
With the ongoing energy crisis, households across the country are keen to ensure their heating is as efficient as possible. Especially if you’re still waiting on the coal merchant, it’s time to get more efficient.
With a plethora of options, it can be hard to know what is cheaper, whether you’re considering gas vs. electricity or renewables (e.g., solar panels or heat pumps) vs. gas boilers.
Of course, it’s cheapest to have no heating, but in the dead of winter, this usually stops being an option.
This guide will compare a range of heating solutions and clarify the differences between energy efficiency as well as average running costs.
Let’s begin!
Most Efficient Heating Key Takeaways:
Efficiency relates to how much fuel is converted into heat energy.
Heat pumps are the most efficient heating systems - they can be as high as 400%
Despite being more efficient, electricity is more expensive than gas, so gas boilers are ultimately cheaper to run.
Other heating systems like ground source heat pumps may be cheaper to run than gas boilers but their upfront costs are considerably more expensive.
Improving your home’s energy efficiency can help keep the heat in and lower your heating bills.
If you have an old natural gas boiler, simply replacing it with a new boiler can help to reduce your heating bills.
Your father was right - you can also wear a jumper around the house to improve efficiency.
Gas vs. Electricity in the UK - Which is Cheapest?
Currently, the average cost of natural gas is 10.3p per kWh, whereas electricity generally costs 34p per kWh.
At the moment, these prices are fixed per the Energy Price Guarantee (EPG).
However, the EPG will expire in spring 2024, at which point prices may change, although it’s anyone’s guess how pricing may evolve through 2024 and beyond.
Unfortunately, it is predicted that energy prices will remain above pre-2020 levels for many years to come.
Clearly, gas has remained cheaper than electricity, despite both being exceptionally high when compared with pre-pandemic prices. Who knew your boiler could be affected by COVID-19, too. Perhaps it should have worn the mask, too.
You should also note that pricing does vary depending on a range of factors such as whether you’re on a standard variable tariff, fixed rate tariff etc.
While natural gas is only relevant to gas boiler running costs, electricity applies to both heat pumps and electric boilers.
However, heat pumps generally offer 250-350% efficiency, making them far cheaper to run than electric boilers which provide about 99-100% efficiency. Don’t ever let your boss know there’s an efficiency level past 100%, or they’ll start demanding it from you, too.
Still, pound for pound, right now, gas boilers are untouchable for efficiency gains to combat energy price rises.
What About Oil and LPG?
On average, heating oil costs approximately £0.09 per kWh, making it marginally cheaper than natural gas.
As for LPG, this is priced at about £0.12 per kWh in the current climate.
Please note, however, that oil and LPG boilers require on-site storage. While this makes them well-suited for those of the natural gas grid (which is approximately 15% of the UK), there are added expenses and logistics to consider.
For instance, you’ll need to have your tank refuelled. You’ll also need to consider occasional maintenance costs for the on-site storage.
Nowadays, the average condensing oil boiler offers 92-93% efficiency (similar to natural gas boilers), while modern LPG boilers also tend to provide 90% + efficiency.
So What is the Cheapest Type of Heating in the UK?
Not heating and putting on that jumper. Seriously. Realistically, and focusing solely on running costs, gas boilers are generally the most cost-efficient when it comes to running costs.
Electricity is more than three times as expensive, so in order for the likes of heat pumps to be cost-effective the cost of electricity must be less than 3.2 times the cost of gas.
Currently, the cost of electricity is much higher than gas meaning it has an extremely high running economy, for example, electricity costs 34p per kWh compared to gas’ 10.3p per kWh.
This means that an air source heat pump may not be cheaper to run than a gas boiler, especially in a property with poor thermal efficiency or windows open.
It’s for this reason that environmental campaigners are demanding the government reduce the environmental levy on electricity.
With that said, using renewables can offer an even cheaper way to heat your home in terms of running costs, but you also have to factor in the upfront installation costs.
For example, using solar panels to mostly (or entirely) power an electric boiler could significantly lower your heating bills. Make sure your systems align, because powering a gas boiler with solar will do nothing for your bills.
In some cases, this option could even prove cheaper than running a gas boiler or even a heat pump.
It’s important to note that while solar power only offers 10-25% efficiency at converting the sun’s energy into usable electricity, it costs nothing to run.
Therefore, in this case, low energy efficiency does not mean it is more expensive. This is a rare exception to the rule, however.
Factors That Impact the Cost of Home Heating
Naturally, how much a heating system will cost to run your home will depend on a range of factors, including, but not limited to the fuel type.
Other factors to bear in mind include the following:
Property Size
Naturally, the larger your property, the higher your energy bills will likely be. It’s why we collectively make sure King Charles doesn’t have to worry about paying his energy bill.
This may come in the form of needing a more powerful heating system than those with smaller properties or running it for longer.
Either way, as a general rule of thumb, a larger property equals higher heating costs.
Insulation
You’ll be glad to know that with proper measures it’s possible to improve your home’s energy efficiency, thus reducing your bills. First, close your windows. Then, keep reading.
A home may be better insulated simply by having high-quality, modern loft or/and wall insulation added.
Other forms of insulation include:
Modern and better-insulated doors
Double- or triple-glazed windows
Plastic lining for windows
Thermal curtains
Floorboard insulation
By taking sufficient measures to better insulate your property, you can improve its energy efficiency and potentially lower your heating bills by a substantial margin!
Fuel Type
The most important factor will likely be the fuel type.
As discussed, oil is among the cheapest options with natural gas and liquid petroleum gas (LPG) being somewhat costlier.
Electricity, however, is the most expensive and commonly used heating fuel.
Type of Heating System
Of course, the fuel type used is not all that matters since the type and quality of the heating system determines how efficiently that fuel is utilised. You can wear Usain Bolt’s shoes all day long, but it won’t make you that much faster, either.
For example, heat pumps are significantly more efficient than most options, specifically because they can harness energy from the surrounding environment, producing more energy than they require to run.
However, the quality/efficiency of the specific model also matters.
How Can I Reduce My Heating Bills?
As touched on, there is a range of measures you can take to lower your heating bills.
These may involve improving the energy efficiency of your home or heating system or another measure entirely.
Smart Heating Controls
One popular way of lowering heating bills involves adding smart heating controls to improve the efficiency of your heating system.
Smart thermostats, for instance, can lower bills by around 8-16%, with some going even further.
For example, Tado claims that their smart thermostats can reduce average customer heating bills’ by an incredible 31%!
Energy Tariffs
Another potential solution is to switch energy tariffs when the time is right.
Due to the Energy Price Guarantee and ongoing energy crisis, it would not be a good time to switch currently (as of spring 2023).
However, from April 2024 onwards, you may find that better options exist for your current tariff and supplier.
For example, if you are on a fixed tariff, there may come a time when swapping over to a standard variable tariff (or another fixed tariff) from a different supplier makes financial sense.
Either way, if you someday decide to make the switch, you should proceed with caution and seek professional advice if necessary.
Improved Insulation
You may also want to make your home more energy-efficient through better insulation. It’s the equivalent of putting that jumper on your house.
Most types of insulation setups (e.g., blanket or sheet insulation) come with a price tag of between £200 and £500 for the average property.
However, having high-quality blown fibre insulation fitted tends to cost between £2,000 and £3,000.
As discussed earlier, however, insulation isn’t limited to wall or loft insulation.
You may also want to consider double- or triple-glazing, better-insulated doors or a myriad of other measures, small and big to improve your home’s thermal efficiency.
How Do I Know What Type of Heating Is Right For Me?
In general, a modern gas boiler still remains the cheapest in terms of running costs thanks to the current price of gas.
It's also the most accessible in terms of upfront installation costs.
However, if you simply want to minimize running costs and the budget for the upfront installation is no issue, you may want to consider a ground source heat pump with underfloor heating or an electric boiler with solar panels.
However, given the upfront costs involved, these options may not be viable for you currently (although government supports do exist, such as the BUS).
Among the more cost-friendly heating solutions (in terms of upfront costs), an A-rated condensing natural gas boiler is arguably the best solution for keeping your energy bills lower.
Moreover, you may want to consider underfloor heating to help lower your heating bills further.
After all, electric underfloor heating in particular, while generally more expensive than a gas boiler, is still not in the same pricing ballpark as heat pumps or solar panels.
For those most concerned with the environment, using renewable technology (such as a solar array) to power an electric boiler is not only cost-friendly but arguably the most eco-friendly solution, although it’s technically a roundabout way to use the sun to heat your house.
Alternatively, a heat pump with underfloor heating is another great way to go from an environmental perspective.
If you have an especially large property, a biomass boiler may be a suitable choice, offering not only relatively low running costs but minimal harm to the environment.
It’s important to note though that biomass boilers can be very expensive.
Most Energy-Efficient Heating Conclusion
This guide has explored the most energy-efficient heating solutions in the UK and how their running costs differ.
Whatever heating system you opt for, be sure to find the right installer for the job. That should be someone with the right qualifications and experience.
Ideally, you should seek three or more quotes from suitable professionals in your area before making a decision on who to hire.
Take into account their pricing, experience and online reviews (if available).
