Switching from oil to a heat pump — is it worth it?

Oil prices have been volatile — averaging 70–90p/litre in 2024 — and there is growing political pressure to phase out fossil fuel heating. An air source heat pump (ASHP) offers a plausible alternative, particularly for properties that already have oil heating (which means they are likely off the gas grid).

The Boiler Upgrade Scheme (BUS) currently offers a £7,500 government grant towards the installation of an ASHP. This is applied at the point of installation by a registered MCS installer and reduces the net cost significantly.

A typical ASHP installation costs £10,000–£16,000 including the heat pump unit, hot water cylinder, and any necessary pipework changes. After the BUS grant, the net cost is £2,500–£8,500 — comparable to a premium oil boiler replacement.

For heat pumps to work efficiently, your house must be reasonably well insulated (at least EPC C) and your radiators must be sized for lower flow temperatures (around 45–55°C vs. 70–80°C for oil). This often means larger radiators or underfloor heating — factor in this cost.

Running costs depend heavily on electricity tariffs and your home's heat loss. At current rates (typically 7p/unit for heat pump tariffs vs. 85p/litre oil), running costs are broadly similar — but heat pumps are cheaper to maintain (no annual OFTEC service, no filter changes) and have lower carbon emissions.

Get a heat loss calculation done before committing — a competent MCS installer will produce this as part of a quote (it should be free or included). This tells you exactly what size heat pump you need. Oversizing a heat pump is a common mistake that wastes money and reduces efficiency.