Cheapest Way To Heat A Home UK

Last updated: January 19, 2024

With the energy crisis in full force and cost of living at a record high, it’s not surprising you are looking for the best way to save money on your heating bills.

To help we have analysed the numbers on the ten major home heating systems you can use in the UK.

We have summarised the pros and cons of each type of system with a focus on the running costs (and installation costs) of each.

Cheapest Way to Heat Your House UK

The cheapest way to heat your home in the UK is with a natural gas boiler, which will cost you an estimated £11,887 over 10 years (for the average three-bedroom house).

However, you probably won’t have missed the news about the rapid price of gas and so it’s going to be worth investing in solar panels for your home, which has the potential to decrease your energy bills by around 50%.

If the cost of electricity decreases (as some predict to happen over the next 10 years) then it will also become increasingly worth heating your home using an electric boiler.

In addition, the price of heat pumps will need to decrease drastically to make them worth the investment, while the likes of oil boilers face being completely abandoned into the dark ages.

Cheapest Heating System Comparison Table

CheapestHeating systemCost after 10 years*
1stGas boiler£11,887
2ndSolar panels£15,500
3rdOil boiler£15,000
4thElectric combi boiler£22,400
5thAir source heat pump£24,150
6thBiomass boiler£35,544
7thInfrared heating panels£37,233
8thGround source heat pump£40,567
The above figures are based on average quotes and the average sized three bedroom house in the UK.

1. Gas Boiler

A natural gas boiler is the most common method of domestic heating in the country and for good reason, as its currently the cheapest method of home heating.

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However, this is bound to change in the near future with the surging cost of natural gas.

In fact, the energy price cap in announced for October just last week, the price of gas will be increasing from 8p to 15p per kWh.

But gas is not a lot and electricity has also increased in price, jumping from 28p and increasing to 52p per kWh for electricity customers.

If this surging price in gas continues, the gas boiler will lose the cheapest status.

2. Solar Panels (with battery storage)

Solar panels can cost around £6,000, but for a complete home solar system with battery storage you are looking to pay around £15,000.

If you want to use it to your heat your home, you can hook it up to the electric heating system and hot water storage tank for hot water, which costa round £1950 on average in the UK.

The solar compatible heating system will also have to be included in that final cost, so for an electric boiler that will be on average £4,500.

The major benefit of using your solar system with battery storage is that you can get paid for your energy and best of all store it within the battery for use in the evenings – overcoming one of the classic disadvantages of older solar set ups.

3. Oil Boilers

Oil is not the cheapest way to heat your home at present and that trend is set to continue.

On average an oil boiler costs around £3,556, this includes the oil boiler itself and storage tank.

Even though oil is by no means the cheapest, its certainly not the worse method in terms of price, yet we still wouldn’t advise installing one.

Why not?

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The price of oil, like gas has been increasing massively over past year, in fact in the last 12 month period the price of oil has increased by 3 times!

Energy prices are volatile and things are difficult to guess, but one thing is clear, the future trend is renewable energy.

4. Electric Boiler

An electric boiler is like a gas boiler but powered by electricity.

Historically the price of gas has been much lower than gas meaning it has always been cheaper to run a gas boiler.

However, this may soon change and certainly will, especially if the cost of electricity continues to become cheaper.

The best part is that just like a gas combi boiler they can provide on-demand hot water and heating.

So to conclude – even though electric boilers current aren’t popular, only being installed into around 200,000 UK homes, this will very likely surge in the coming years.

5. Air Source Heat Pump

Heat pumps are superior in terms of efficiency, coming out at around three times more than a typical gas boiler making them use one third less in energy.

While air source heat pumps are suitable for almost most UK homes, they are very costly to install. On average, an air source heat pump costs between £7000 to £1500.

They also cost more to run and this won’t change until it becomes cheaper than gas. At present, the cost of electricity is 400% more expensive than gas.

However the good news is that you can now use the Boiler Upgrade Scheme, which can help subside the cost of installing a heat pump by £5,000.

6. Biomass Boiler

A biomass boiler is expensive to install, especially when you start to factor in the wood storage shed.

On average, combined these will cost around £18,500 to install and since the price of wood has also been volatile in the past year, running your home on wood isn’t exactly cheap.

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Again, you can take advantage of the Boiler Upgrade Scheme, which can help subside the cost of installing a biomass boiler by £6,000, however there are better options.

7. Infrared Heating Panels

Infrared heating panels heat objects rather than air. An infrared heater will heat any items in front of it, but a regular heater will just heat the air surrounding it.

In terms of upfront costs, infrared heaters tend to be more expensive than other electrical heaters, but they are by far the cheapest to run.

However, the major downside is that Infrared panels don’t heat your water, meaning you’ll need to pay for more electricity to power this too.

There are under 50,000 solar panels currently installed in the UK, but as electricity continues to decrease, this number is likely to grow.

8. Ground Source Heat Pumps

As the name suggests, a ground source heat pump extracts heat from the ground to use for central heating and hot water.

The main limitation is the cost, which averages around £25,000 for a complete installation.

However, the other main limitation is the amount of space required, a substantial mount is required to create bore holes and trenches for the wires.

Cheapest Way To Heat a home UK

As you can see from our review, the cheapest way to heat a home in the UK is with the gas boiler i.e. the gas combi boiler.

Again, this is based on the initial upfront costs and the cost of gas vs electricity, which factor into the running costs.

Gas boilers are not only one of the cheapest heating systems to install at around £2,500 on average, but they are also cheaper to run.

At present gas remains cheaper than electric, but this will likely change in the coming years, so the likes of solar panels, especially with at home systems will increase in number.