Oil boilers vs heat pumps

Making the switch amid rising oil prices

The escalating conflict in Iran has triggered a significant surge in heating oil prices with the price of oil doubling in the last week alone. This has caused turmoil in the fuel economy and frustration for many homeowners.

This development has caused many homeowners to look for alternative heating solutions to their existing oil boilers. We’ll give a detailed comparison between oil boilers and air source heat pumps, discussing energy efficiency, costs, and suitability in the current energy landscape to help those looking to switch in the future.

Summary

• As a result of the current conflict in Iran and the wider Middle East, rising oil prices have already increased heating costs for many UK homeowners.
• An air source heat pump (ASHPs) offers higher efficiency, reduced emissions, and is not always exposed to oil price swings in the future.
• Whilst oil boilers remain familiar to many homeowners, especially those in rural areas, they lock them into a dependency on fossil fuels.
• This could put homeowners at a higher risk of rising oil prices when global events such as the current conflict take place.

How they work

• Oil boilers work by burning heating oil stored in an external tank to heat water for radiators and taps. When activated, the burner pumps oil into a combustion chamber, mixing it with air and igniting it to create heat. This heat passes through a heat exchanger, warming the water circulating to your home.
• Air source heat pumps (ASHPs) extract heat from the ambient air, even at low temperatures and transfer it to heat the water in your central heating system. This heats home via your radiators or underfloor heating and also heats the water stored in your hot water cylinder for your taps, showers, and baths. 

Efficiencies

• Oil boilers have long been a cornerstone of residential heating systems especially in areas where there is no gas supply. Their design and functionality have evolved over decades, leading to increased efficiency and reduced emissions in modern models. However, g-rated oil boilers are at best 70% efficient due to the way they work. Their dependency on fossil fuels remains a critical concern especially now in times of fluctuating global oil prices.
• Air source heat pumps are renowned for their high Coefficient of Performance (COP), which measures the ratio of heat output to electricity input. With COP values often exceeding 3.0, ASHPs can deliver three units of heat for every unit of electricity consumed. This makes heat pumps one of the most efficient home heating systems you can buy.

Installation costs

• The initial cost of installing an oil boiler system is generally lower than that of an air source heat pump at an average of £3,200
• Air source heat pump costs vary from £3k to £11k primarily due to the complexity and technology involved in their installations, which may require modifications to existing infrastructure. For example, some homes required increased insulation and/or radiator upgrades to ones with larger surface areas.
• Schemes like the Boiler Upgrade Scheme can help eligible homeowners with £7,500 towards installation costs of a new air source heat pump.

Changing oil prices

While oil boilers may have a lower upfront cost, their operating expenses are heavily influenced by fluctuating oil prices. The current conflict in Iran highlights the vulnerability of oil-dependent heating systems to pricing volatility. In contrast, air source heat pumps, despite their higher initial investment, can offer long-term savings especially when coupled with other energy saving measures such as solar panels and heat pump specific energy tariffs.

Green credentials

• The combustion of fossil fuels in boilers results in the emission of carbon dioxide and other greenhouse gases, contributing to global warming. Although modern boilers are designed to minimise these emissions, achieving a net-zero carbon footprint remains a challenge.
• Air source heat pumps are a sustainable heating solution. When paired with other measures such as solar panels and heat pump specific tariffs, some heat pump installations can achieve near-zero carbon emissions.

Q&A

Question: How does the recent rise in oil prices affect UK homeowners using oil boilers?

Short answer: Higher oil prices directly increase the running costs of oil-fired boilers and add volatility to customer heating bills. Because boilers depend on fossil fuels, they expose households to higher market swings than other fuels. In contrast, air source heat pumps (ASHPs) run on electricity and are less tied to fossil fuel price shocks, a benefit that grows as the electricity grid decarbonises.

Question: Which system is more energy efficient?

Short answer: A g-rated oil boiler can only reach up to 70% efficiency making it far less efficient than a heat pump. ASHPs are typically 300% efficient delivering approximately three units of heat per unit of electricity. While oil boiler efficiency hinges on combustion and maintenance, ASHPs leverage ambient air and advanced controls to convert electricity into heat more efficiently overall.

Question: How do upfront and long-term costs compare, and can incentives help with ASHPs?

Short answer: Oil boilers usually have lower upfront costs, whereas ASHPs are costlier to install and may require some modifications such as radiator upgrades and increased home insulation. However, heat pumps often deliver lower lifetime costs thanks to minimal maintenance. Government incentives such as the Boiler Upgrade Scheme can significantly offset ASHP installation costs, strengthening their long-term value.

Question: Will an air source heat pump keep my home comfortable year-round?

Short answer: Yes! In extremely cold conditions their efficiency will drop a little, but they are perfectly suited to the UK climate.

Question: Which option is better for reducing carbon emissions?

Short answer: Oil boilers combust fossil fuels and emit carbon dioxide, so even efficient modern models struggle to achieve net-zero emissions. ASHPs use renewable energy sources from ambient air and, when paired with green electricity, can reach near-zero operational emissions, making them a stronger choice for homeowners prioritising sustainability.