Air Source Heat Pump vs Oil Boiler: Which is better?

Air source heat pump vs oil boiler: find out which is better. If you’re considering whether it’s a better option to have a new oil boiler, or an air source heat pump installed, then read on.

We’ll talk through exactly what an air source heat pump is, and how it compares to an oil boiler in terms of installation cost, running cost and environmental impact.

An air source heat pump outside a house with pink flowers next to it

What is an Air Source Heat Pump?

The easiest way to describe an air source heat pump is as a kind of reverse refrigerator. It works by using a compressor and two sets of copper coils, one outside your home and one inside. This extracts heat from the air outside. It then converts the heat into energy, which is used to heat your home or your hot water. 

Modern air source heat pumps are so efficient that they can even work when it isn’t that warm outside. The air source heat pump running cost is generally low as they will always generate more energy than they use.

Perhaps the most attractive thing about air source heat pumps is that they are completely renewable.

Check out our Ultimate Guide on Air Source Heat Pumps for a more in-depth explanation.

Will Air Source Heat Pumps Reduce My Carbon Footprint?

According to the Energy Saving Trust Air Source Heat Pumps offer reduced CO2 emissions than traditional heating systems.

The graph below shows how much CO2 (kg / year) can be saved from switching to an air source heat pump. 

A graph that shows how much CO2 (kg / year) can be saved from switching to an air source heat pump.
Source: Energy Saving Trust:

So, you can see that a big plus for switching to an air source heat pump is reducing your home carbon footprint.

What is an oil boiler?

Oil boilers are often used in properties which don’t have a mains gas connection. Properties with an oil boiler will have an oil tank somewhere on their property, which will need to be topped up periodically. They work by burning oil to provide heat.

Oil boilers aren’t renewable, and so many people are looking to replace their oil boilers with greener ways of heating their homes and hot water.

Air Source Heat Pump vs oil boiler

Air Source Heat Pumps can be used to provide all of your hot water and heating requirements. This means that they can be used as a replacement for an oil boiler system. We’ll run through oil boiler cost vs air source heat pump cost below. We hope this will help you decide which is the best option for you.

Oil boiler

Oil boilers are commonly available in three types; combi, system and regular. 

  • Oil combi boilers are the most cost effective type of oil boiler, as they only work when the heating system is turned on or hot water is needed. However, they are often not quite powerful enough for homes with multiple bathrooms.
  • In larger homes an oil system boiler is a better choice as it will keep a tank full of hot water warm at all times, so it’s better able to cope with higher demand.
  • Regular oil boilers are the oldest type of oil boilers, often found in properties with no mains water connection. They take in water from a cold water storage tank, rather than directly from the mains like combi and system boilers. It’s generally recommended that you only have a regular oil boiler installed if you are doing a like for like replacement.

If your home has an oil boiler that was installed over 10 years ago, you’ve noticed a rise in your energy costs or a decline in your boiler efficiency, then it’s probably time to consider a replacement.

The cost of a brand new oil boiler can range anywhere between £1,000 and £4,000 depending on your system set up, and which make you go for. You can then expect to spend another £500 to £2,000 for the cost of actually installing the boiler.

The cost of oil

The cost of oil is quite low at the moment, with 2020 seeing prices drop to £0.36 a litre, which equates to roughly £0.481p/kWh. This makes oil much cheaper than mains electricity, and slightly more expensive than gas. Bear in mind this is based on the current price of oil, which can fluctuate wildly. If you wind up needing to buy your oil at a time when prices are high, you could end up paying much more.

Modern oil boilers are much more efficient than they used to be, but they still aren’t great news for the environment because of their carbon footprint. According to DEFRA, oil boilers produce 0.245kgCO2 per kWh, compared to 0.184kgCO2 per kWh for gas boilers.

Disadvantages of oil boilers:

  • Oil must be purchased in bulk.
  • High carbon footprint.
  • Oil prices are volatile.
  • Requires an oil tank, which can be unsightly if it isn’t underground.
  • Oil deliveries can be delayed by human error or traffic issues.
  • Lower flow rate than other types of heating systems, meaning that it may take longer to heat your home.

Air Source Heat Pump cost

There are two types of air source heat pumps available, either a regular air source heat pump or a hybrid.

Air source heat pumps work as a stand alone unit, used as the sole means of heating your home. 

Hybrids give you the option to use either the air source heat pump, a combination of air source heat pump and boiler, or just your boiler. Hybrids will be installed with an intelligent system that will calculate the most efficient choice for you, based on the temperature outside, your current heating needs and the current cost of electricity.

If you are eligible for the Green Homes Grant then the government will pay up to £5,000 towards the cost of our renewable heating package. This means that you can have a brand new air source heat pump installed for just £2,500.

The air source heat pump running cost is much lower than the cost of running an oil boiler. Although electricity is more expensive than oil, air source heat pumps produce four times the energy that they consume. Therefore your energy goes much further. According to the Energy Saving Trust, you could save between £460 to £545 per year by replacing your oil boiler with an air source heat pump.

Another factor when considering air source heat pump vs oil boiler is the fact that air source heat pumps are renewable, and therefore significantly more environmentally friendly than oil boilers.

Disadvantages of air source heat pumps:

  • You must have enough room outside for them to be fitted, either on a wall or as a standing unit.
  • Air source heat pumps operate at quite a low level of heat, so you may need to get an extra heating element installed for when you need very hot water (for example, doing the washing up). 
  • You must ensure that your home is properly insulated for the air source heat pump to work at its best.

Air Source Heat Pump vs Oil Boiler costs

A side by side comparison of air source heat pump cost and oil boiler cost:

Oil Boiler Air Source Heat Pump
Installation £1,000 – £4,000 £2,500
Boiler/Pump £500 – £2,000 £0
Running cost (p/kWh) £0.481 £0.1085
Annual running cost for an average home (25,000 kW per year for oil, 5,814kWh for pump) £1,202 £879 (£1,011 if very hot water is needed)

Air Source Heat Pump vs Oil Boiler, so which is better?

In terms of cost, impact on the environment and convenience, we would recommend that an air source heat pump is a much better option than an oil boiler.

Not only is the carbon footprint much lower, the running costs are much less too.

If you act quickly you can make the most of the government Green Homes Grant and get your air source heat pump installed for just £2,500 as part of our renewable heating package. This makes the air source heat pump the winner by a mile!

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