Free heating oil tool
At an example oil price of 70p per litre, a home burning 1,200 litres a year spends about £882 on oil. A heat pump at a realistic SCOP of 2.9 would cost around £1,013 to run, a saving of roughly £-131, with payback of no payback. Enter your own oil price in the calculator to compare your figures.
Take a home that burns 1,200 litres of kerosene a year through a condensing boiler running at 92% efficiency. That delivers about 11,426 kWh of useful heat. At an example price of 70p per litre, the oil costs £882.00 a year including 5% VAT.
To deliver the same 11,426 kWh, a heat pump running at a realistic SCOP of 2.9 would draw about 3,940 kWh of electricity. At the Ofgem cap rate of 25.7p per kWh (1 July to 30 September 2026), that costs £1,012.62 a year. Depending on real world SCOP, running cost falls between £864 and £1,175.
That is a running saving of about £-131 a year. After the £7,500 grant, a heat pump still costs £2,500 to £8,500 to install, versus £2,500 to £4,500 for a replacement oil boiler. Dividing the extra cost by the yearly saving gives a simple payback of no payback. If your saving were smaller, or nil, the honest answer would be that a heat pump is not worth it for you on cost alone.
| Yearly oil use | Oil cost/yr | Heat pump cost/yr | Yearly saving | Payback |
|---|---|---|---|---|
| 900 L | £662 | £759 | -£98 | none |
| 1,200 L | £882 | £1,013 | -£131 | none |
| 1,800 L | £1,323 | £1,519 | -£196 | none |
Assumes a condensing boiler, SCOP 2.9, electricity at 25.7p per kWh and the £7,500 grant. Payback uses the extra install cost over the yearly saving. Figures are averages, not a quote.
heat_demand_kwh = litres * kwh_per_litre * boiler_efficiency
= 1200 * 10.35 * 0.92 = 11426 kWh
oil_cost = litres * ppl / 100 * (1 + vat_domestic)
= 1200 * 70 / 100 * (1 + 0.05) = £882.00
hp_kwh = heat_demand_kwh / scop
= 11426 / 2.9 (field-trial SCOP, verified 2026-07-28) = 3940 kWh
hp_cost = hp_kwh * electricity_p_per_kwh / 100
= 3940 * 25.7p (Ofgem cap 1 July to 30 September 2026) / 100 = £1,012.62
annual_saving = oil_cost - hp_cost = £-130.62
payback = (hp_install_net - boiler_install) / annual_saving
hp_install_net = £10,000 to £16,000 minus £7,500 grant
boiler_install = £2,500 to £4,500
payback range = no payback | Figure | Value | Source | Verified |
|---|---|---|---|
| kerosene kwh per litre | 10.35 kWh/L | UK Government GHG conversion factors 2025, burning oil (net CV) | 2026-07-28 |
| boiler efficiency condensing | 0.92 ratio | SEDBUK band A typical seasonal efficiency, OFTEC technical guidance | 2026-07-28 |
| boiler efficiency noncondensing | 0.78 ratio | SEDBUK band D-E typical seasonal efficiency for pre-2005 pressure jet boilers | 2026-07-28 |
| heat pump scop realistic | 2.9 ratio | Energy Systems Catapult Electrification of Heat field trial, median ASHP SCOP | 2026-07-28 |
| heat pump scop range low | 2.5 ratio | Energy Systems Catapult field trial, lower quartile | 2026-07-28 |
| heat pump scop range high | 3.4 ratio | Energy Systems Catapult field trial, upper quartile | 2026-07-28 |
| electricity p per kwh | 25.7 p/kWh | Ofgem energy price cap, 1 July to 30 September 2026, electricity unit rate, direct debit | 2026-07-28 |
| vat domestic | 0.05 ratio | VAT Act 1994 Schedule 7A Group 1, domestic fuel reduced rate | 2026-07-28 |
| bus grant heat pump | 7500 GBP | Boiler Upgrade Scheme, ASHP and GSHP grant level, GOV.UK | 2026-07-28 |
| ashp install cost low | 10000 GBP | MCS installation cost data, ASHP full system, 2026 | 2026-07-28 |
| ashp install cost high | 16000 GBP | MCS installation cost data, ASHP full system, 2026 | 2026-07-28 |
| oil boiler install cost low | 2500 GBP | Indicative estimate - not independently sourced | 2026-07-28 |
| oil boiler install cost high | 4500 GBP | Indicative estimate - not independently sourced | 2026-07-28 |
| kerosene kgco2e per litre | 2.54 kgCO2e/L | UK Government GHG conversion factors 2025, burning oil | 2026-07-28 |
| electricity kgco2e per kwh | 0.124 kgCO2e/kWh | UK Government GHG conversion factors 2025, UK grid electricity | 2026-07-28 |
Your real SCOP. A heat pump only reaches a good SCOP if the radiators or underfloor system are sized for low water temperatures and the home is reasonably insulated. In a leaky home with small radiators, real SCOP can drop below 2.5, which pushes running cost above oil.
The oil price. Everything hinges on the pence per litre you actually pay. When oil is cheap, an oil boiler wins on running cost easily. When oil is dear, the heat pump gap widens. This is why the tool asks for your own price rather than assuming one.
Your electricity tariff. The default uses the Ofgem cap. A cheaper heat pump specific tariff, or solar panels, can cut heat pump running cost sharply. A standard variable tariff will not.
Install quality and cost. Quotes vary widely. A poorly specified system costs more and performs worse. Get a proper heat loss survey rather than relying on a rule of thumb.
Carbon versus cost. A heat pump usually cuts carbon even where it does not cut cost, because grid electricity is cleaner than burning kerosene. If lower emissions matter to you, that may tip the decision regardless of payback.
Comparing running costs is one thing. If you are staying with oil for now, compare prices for your postcode first.
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