Heating Cost Calculator

Heating Cost Calculator: Heat Pump vs Gas & Oil

This heating cost calculator compares the running cost of a heat pump, gas boiler and oil boiler using your own energy prices, efficiencies and annual heat requirement.

For heat pumps, enter the seasonal performance factor, or SPF, you want to test. The calculator converts each system into the cost of useful heat delivered into your home, giving a like-for-like comparison.

That matters because electricity, gas and oil prices cannot be compared directly. A heat pump can produce several units of heat from each unit of electricity, while gas and oil boilers do not convert all of the energy in their fuel into useful heat.

Enter your electricity price, heat pump SPF, gas price, heating oil price and boiler efficiencies to compare:

• cost per kWh of useful heat
• estimated annual heating cost
• electricity, gas or heating oil required
• the heat pump SPF needed to match the running cost of gas
• the heat pump SPF needed to match the running cost of oil

If you are thinking about getting a heat pump, please visit my Trusted Heat Pump Installers directory, where you will find a hand-picked list created by me.

You may also want to visit the Heat Pumps Explained section of this website for more heat pump-related articles and guides.

Use the Heating Cost Calculator

What does SPF mean?

SPF stands for seasonal performance factor.

It describes how much useful heat a heat pump produces compared with the amount of electricity it consumes over a period of operation.

For example, an SPF of 4 means that for every 1 kWh of electricity consumed, the heat pump has delivered 4 kWh of heat.

That is different from looking at COP, or coefficient of performance, at one particular operating condition or point in time.

A heat pump’s efficiency changes constantly with outside temperature, flow temperature, hot water production, defrosting and other operating conditions. SPF gives us a much better figure for comparing real running costs over a longer period.

Why compare the cost of useful heat?

The unit prices on your energy bill cannot be compared directly.

Electricity may cost considerably more per kWh than gas, but a heat pump does not use one kWh of electricity to produce one kWh of heat.

Likewise, a gas or oil boiler does not convert 100% of the energy contained in its fuel into useful heat.

The better comparison is therefore:

How much does one kWh of heat delivered into the home actually cost?

For a heat pump:

Useful heat cost = electricity price ÷ SPF

For a gas boiler:

Useful heat cost = gas price ÷ boiler efficiency

For an oil boiler:

Useful heat cost = oil price ÷ energy contained in each litre ÷ boiler efficiency

The calculator does those conversions for you.

What is the break-even SPF?

The break-even SPF is the heat pump performance at which its energy running cost matches another heating system.

Because this calculator now includes both gas and oil, it shows two figures:

• SPF needed to match gas
• SPF needed to match oil

If the heat pump achieves an SPF above the displayed figure, its calculated energy cost will be lower.

If it achieves an SPF below that figure, the alternative heating system will have the lower calculated energy cost.

I would not treat the break-even SPF as a performance target.

A better question is what SPF a properly designed and operated heat pump is realistically likely to achieve, and what that would make the cost of useful heat compared with the alternatives available to you.

Comparing a heat pump with gas

Gas is normally sold in pence per kWh, which makes the calculation fairly straightforward.

However, the boiler does not deliver all of that energy into the house as useful heat.

At an assumed boiler efficiency of 85%, buying 1 kWh of gas produces around 0.85 kWh of useful heat.

So if gas costs 8p/kWh:

8p ÷ 0.85 = 9.41p/kWh of useful heat

The calculator defaults to an 85% gas boiler efficiency, but you can change this to suit the assumption you want to test.

Comparing a heat pump with heating oil

Heating oil is normally bought by the litre rather than by the kWh, so another conversion is needed.

This calculator assumes that one litre of heating oil contains 10.35 kWh of energy.

It then adjusts that figure for the efficiency of the oil boiler.

For example, at £1 per litre and 85% boiler efficiency:

10.35 × 0.85 = 8.80 kWh of useful heat per litre

The cost of useful heat is therefore approximately:

£1 ÷ 8.80 = 11.37p/kWh

Heating oil prices are not capped in the same way as domestic gas and electricity tariffs and can move considerably over time.

For that reason, it is better to enter the price you are actually paying, or a current quote, rather than rely on the calculator’s example price.

Why boiler efficiency matters

Boiler efficiency makes a large difference to any comparison.

A boiler rated at 90% does not necessarily operate at 90% efficiency throughout the year.

Actual performance depends on factors including boiler type, system temperatures, controls, cycling and how the heating system is operated.

Modern condensing gas boilers can perform very well when return temperatures are low enough for them to condense effectively.

Older boilers, poorly controlled systems or boilers regularly operating at high temperatures may perform worse.

The same principle applies to oil boilers.

For a simple comparison, this calculator uses 85% as the default efficiency for both gas and oil, but you can change either figure.

What does annual useful heat needed mean?

Annual useful heat needed is the amount of heat that actually needs to be delivered into the home over a year.

It is not the amount of electricity, gas or oil purchased.

For example, if a house needs 12,000 kWh of useful heat:

• a heat pump with an SPF of 4 would need around 3,000 kWh of electricity
• an 85% efficient gas boiler would need around 14,118 kWh of gas
• an 85% efficient oil boiler would need around 1,364 litres of heating oil using the assumptions in this calculator

Changing the annual useful heat figure changes the estimated annual running costs and fuel consumption.

It does not change the cost per kWh of useful heat or the break-even SPF.

If you do not know your annual heat requirement, you can leave the default 12,000 kWh figure in place and use it as an example.

What electricity price should I use?

If you are on a simple flat-rate tariff, enter the electricity unit price you actually pay.

If you use a time-of-use or smart tariff, things become more interesting.

Your heat pump may not pay the headline tariff rate for every kWh it consumes.

For example, some heating may take place during cheaper periods, and hot water may be deliberately scheduled into lower-cost windows.

If you know it, the most useful figure is therefore the average electricity price actually paid for the electricity used by your heat pump.

Do not automatically use your whole-house average if other loads such as an EV, home battery or immersion heater materially change that figure.

The aim is to estimate the price of the electricity actually being used to produce the heat.

What gas price should I use?

Use the unit rate shown on your gas tariff, normally quoted in pence per kWh.

The calculator’s default is based on a representative energy price, but your actual tariff may be higher or lower.

Fixed tariffs, regional differences and changes to the energy price cap can all affect the rate you actually pay.

What heating oil price should I use?

Use the delivered price you are currently paying or have been quoted, including VAT where applicable.

Enter the figure in pounds per litre.

For example:

• 80p/litre = 0.80
• £1/litre = 1.00
• £1.10/litre = 1.10

Oil prices can move quickly, so entering your own current price is much more useful than relying on an old national average.

What is the spark gap?

The spark gap is the ratio between electricity and gas prices.

For example, if electricity costs 26p/kWh and gas costs 8p/kWh, electricity is 3.25 times the price of gas.

That does not mean a heat pump costs 3.25 times as much to run as a gas boiler.

A heat pump produces multiple units of heat from each unit of electricity, while the gas boiler loses some energy during conversion.

The spark gap can still be a useful shorthand when discussing heat pump economics, but the cost of useful heat is the more meaningful comparison.

It also does not translate neatly to heating oil because oil is normally sold by the litre rather than directly by the kWh.

How the SPF calculator works

The calculator uses the following calculations.

Heat pump

Useful heat cost

Electricity price ÷ SPF

Electricity required

Annual useful heat ÷ SPF

Annual running cost

Electricity required × electricity price

Gas boiler

Useful heat cost

Gas price ÷ boiler efficiency

Gas required

Annual useful heat ÷ boiler efficiency

Annual running cost

Gas required × gas price

Oil boiler

The calculator assumes 10.35 kWh of energy per litre of heating oil.

Useful heat per litre

10.35 × oil boiler efficiency

Useful heat cost

Oil price per litre ÷ useful heat per litre

Litres required

Annual useful heat ÷ useful heat per litre

Annual running cost

Litres required × oil price per litre

Break-even SPF

For gas:

Electricity price ÷ gas useful heat cost

For oil:

Electricity price ÷ oil useful heat cost

What isn’t included?

This calculator is intended to compare energy running costs.

It does not attempt to calculate the complete lifetime cost of owning each heating system.

The figures do not include:

• installation cost
• grants or subsidies
• standing charges
• servicing or maintenance
• repairs
• finance costs
• system lifespan
• replacement costs
• other household electricity or fuel use

Standing charges are deliberately excluded because whether they should be included depends on the household.

For example, a home moving completely away from gas may be able to remove the gas standing charge altogether. A household that continues to use gas for cooking or another appliance will still pay it regardless of which system provides the heating.

The calculator is therefore best used for what it says on the tin: comparing the energy cost of producing useful heat.

SPF, running costs and real homes

No single SPF figure tells you whether a heat pump is a good or bad choice.

Running cost depends on the combination of:

• heat pump performance
• electricity price
• alternative fuel price
• boiler efficiency
• the amount of heat the home needs

An SPF of 3 on cheap electricity could cost less than an SPF of 4 on expensive electricity.

Likewise, changes in gas or heating oil prices can alter the comparison without anything changing about the heat pump itself.

That is why I prefer looking at the cost of useful heat rather than chasing one supposedly magic COP or SPF number.

Put your own figures into the calculator and see what the numbers look like for your home.