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Cost of Heating A House: A Comparison Between Heating Systems

31 Jan 2022

Have you ever been curious about how much the heating system accounts for your energy bills and how to reduce that cost? If yes, this article is here to help.

The weather of the UK makes central heating systems not even optional for most households. We all depend heavily on them for comfort during chilly days in the winter. While it is inevitable that heating makes up a large yet hidden part of your energy bills, you can always do something about it.

Whether it is buying a better boiler or even doing a complete overhaul by installing a new heating system, there are many ways to reduce the cost of heating your house. Before diving deeper, you should take a look at common types of heating systems in the UK.

  1. Type of Home Heating Systems
  2. Annual Average Cost of Heating
  3. How To Reduce Heating Cost
  4. Conclusion

1. Type of Home Heating Systems

The mechanism behind your home's heating system is very important. It doesn't just determine what kind of equipment you have to install and maintain, but it also has a big impact on your energy bills.

Pipes of an external heating system for gas distribution

Gas Central Heating

Mains gas is the natural gas used to operate the gas central heating systems and also the most common fuel for both cooking and heating. Consisting mainly of methane (CH4), it is distributed directly to more than 21 millions homes in the country through the pipeline infrastructure1.

Gas central heating uses a so-called "wet system" to heat a house. There is a boiler at the centre of the system, which has the job of burning the mains gas and heating the water2. This hot water then circulates through a system of radiators and pipes throughout the house, keeping it warm even on a winter day.


  • Mains gas is a cheap fuel for heating, especially when you compare it to electric systems.
  • You don't need to think about gas storage as it's constantly moved into your house through the pipes.
  • With many technical improvements, modern boilers have a much higher energy efficiency than previous generations (sometimes more than 90%), ensuring a great value for a consumed unit of energy.
  • Gas systems are not affected by power cuts.


  • Natural gas is not a clean source of energy, producing a lot of carbon dioxide when burned.
  • The UK imports most of its natural gas, mainly from suppliers like Norway3. This lack of self-sufficiency means the gas prices can fluctuate depending on the global market.
  • Not every household in the country is in the national mains gas network, and getting a property connected to a gas supply may cost a lot.

Electric boiler installed on a blue wall

Electric Central Heating

Storage heaters, coupled with either Economy 7 or Economy 10 time-of-use tariff, is the most popular setup of an electric central heating system. The heater helps you take advantage of the tariff and save money by using as much electricity at off-peak rates as possible. It's a cost-effective alternative to gas heating if your property doesn't have access to mains gas.


  • The installation and setup of electric heating is much cheaper than a gas-based system as you don't have to pay for the pipework.
  • With few moving parts, an electric storage heater doesn't require much maintenance.
  • Electricity is available for more households than mains gas in the UK.


  • The cost of running an electric heating system is much higher than what you need to pay for gas heating.
  • Multi-rate tariffs like Economy 7 and Economy 10 aren't suitable for people who use a lot of electricity during the day as their daytime rates are much higher than that of regular single-rate tariffs.
  • Electric heating systems are prone to power cuts.

An outdoor gas tank

LPG Central Heating

Many households in the UK opt for liquefied petroleum gas (LPG) when they're not on the mains gas network4. The main difference between mains gas and LPG comes from how the gas is distributed and stored. While mains gas is delivered directly to you through the pipeline, you will need to have LPG tanks shipped to your house.

It's a convenient choice for those off the main grid as they can just hook up those LPG tanks into a conventional gas heating system5. You will need a boiler designed to work with LPG, however.


  • LPG central heating is cheaper than electric systems, suitable for households not connected to mains gas.
  • The heating system could be reused if you decide to connect your house to the mains gas grid later.
  • LPG-fired boilers are highly efficient, giving a good return on the amount of energy used.


  • As LPG tanks need to be delivered to your house by road, your heating system doesn't benefit from a constant supply like mains gas. If you fail to monitor the amount of gas in the tank and order more in time, there is a possibility you run out of gas, and your house's heating system will stop working until the next delivery.
  • More work required to replace the storage tanks
  • Like mains gas, it's not a clean fuel.

Two electric heaters on the ground

Oil Central Heating

Oil is another common choice for people not living near the mains gas network. Most oil heating systems work in the same way as a gas system. Water is heated by an oil-fired boiler before going through the house and heating it via radiators. Both heat-only and combination boilers are available, with the latter storing hot water internally instead of heating it instantaneous on-demand6.

Like LPG systems, you will need to have oil physically delivered to your house in a tank, which is usually put outside and connected to the boiler through pipes. You can either rent or buy these tanks from your supplier.

Most oil heating systems in the UK use kerosene, also informally known as heating oil. It burns more efficiently and cleanly than heavy oils like red diesel.


  • Oil is a great alternative to mains gas if your house is off the grid.
  • The cost of operating an oil heating system is cheaper than an electric one.
  • Though still flammable, oil is less prone to explosion like natural and petroleum gases.


  • Like LPG tanks, you need space in your house to store oil for your heating system.
  • You can’t have a guarantee of a constant fuel supply as oil has to be delivered by road, and you need to keep tabs on the level of oil in the tank.
  • Oil even produces more carbon emissions than natural gas.

Solar water heating system installed on the roof of a house

Renewable Energy Systems

As an emerging form of energy for heating, renewable energy allows you to heat your house without depending on fuel from suppliers. It includes all types of energy sources that produce low or zero carbon emissions.

These heating systems require you to take a long-term view, however, as it still costs a lot to install a new system into your house, even much more than traditional gas and electricity systems.

To encourage the growth of heating with clean energy sources, the UK Government has introduced the Renewable Heating Incentive (RHI)7. This scheme pays eligible households a financial incentive for a period of 7 years to install renewable heating systems, including both non-domestic and domestic buildings. You can apply for this incentive if you have either a solar thermal system, a biomass boiler, or certain types of heat pumps.


  • Renewable energy sources produce zero or a very low amount of greenhouse gases.
  • You're not dependent on a third-party supplier of fuel.
  • You can apply for the RHI scheme to receive payments for the energy you produce for a long period.


  • The upfront cost of a renewable energy heating system is much higher than conventional systems.
  • Not every heating system is eligible for RHI payments.

A blonde woman sits at a desk and works with bills and documents using a calculator

2. Annual Average Cost of Heating

The cost of heating a house depends on the amount of energy needed to power the heating system, its efficiency, and the price of the energy. This table has the fuel prices (pence per kWh) in England, Scotland and Wales as of April 2020, according to Energy Saving Trust8.

SystemPrice per kWh
Gas4.17 p
Oil4.81 p
LPG7.19 p
Electricity (off-peak Economy 7)9.76 p
Electricity (on-peak Economy 7)20.03 p

Based on the data from Odyssee that each UK household uses 10301.31kWh a year for space heating, here are the rough annual average costs of heating a house9:

SystemAverage Annual Cost
Electricity (off-peak Economy 7)£1,005
Electricity (on-peak Economy 7)£2,063

It's pretty clear that heating with electricity is much costlier than running conventional gas and oil systems.

Piggy on a pile of coins

3. How To Reduce Heating Cost

Proper Insulation

It's always better to take the "insulation first" approach when trying to bring down your energy bills. Once your house has been properly insulated to prevent heat loss, the amount of energy required to heat it will go down as a result. Proper insulation means your house can keep as much heat as possible instead of losing it through the walls, doors, windows, and roof.

Use Gas Heating When Possible

Unless your house isn't connected to the mains gas network, or you don't want to introduce more greenhouse gases into the atmosphere with fossil fuels, gas is the optimal choice from the financial perspective. LPG and oil are similar choices if you want to keep the heating cost low, but your house is off the grid.

Switch The Right Tariff

If you have a night storage heater installed, you can switch to multi-rate tariffs like Economy 7 and Economy 10, which charge a lower rate for electricity at night. Remember that these tariffs also mean you have to pay higher rates during the day.

A person adjusting the thermostat valve of a heating radiator

Choose Efficient Equipment

Opt for reliable and efficient heating equipment, such as A-rated condensing boilers for gas heating systems. They might be expensive at first but would result in lower bills and peace of mind in the long run.

4. Conclusion

It's hard to point out exactly the heating cost from your energy bills, but the rule is the same for every household: gas (mains gas and LPG) and oil heating systems are much cheaper than using electric central heating systems. It makes more sense to use such a system to lower your energy bills unless you can’t access gas and oil supply, or you simply prefer an eco-friendly heating system.