The main alternatives to an oil boiler are an air source heat pump, a ground source heat pump, an LPG boiler, a biomass boiler, an electric boiler or storage heaters, and switching your existing boiler to HVO fuel. For most well-insulated homes off the gas grid, an air source heat pump is the cheapest to run, especially with the £9,000 Boiler Upgrade Scheme grant currently available to oil-heated homes in England and Wales. For homes that aren’t ready for a heat pump, a modern oil or LPG boiler is still a perfectly sound choice.
If your oil boiler is getting old, or the past year’s kerosene prices have given you a fright, it is natural to wonder what else is out there. Here are the honest pros and cons of each option, with the costs side by side.
What are the alternatives to an oil boiler at a glance?
| Option | Rough running cost per kWh of heat* | Grant available? | Best suited to |
|---|---|---|---|
| Oil boiler (kerosene) | About 12.6p | No | Homes happy with oil, or not ready for a heat pump |
| Air source heat pump | About 8.8p | Yes, £9,000 for oil homes until March 2027 | Reasonably insulated homes with outdoor space |
| Ground source heat pump | Lower still in most cases | Yes, £9,000 for oil homes until March 2027 | Larger plots with room for ground loops or boreholes |
| LPG boiler | About 8p to 10p, varies by supplier | No | Homes wanting a boiler without oil storage |
| Biomass boiler | Varies with fuel and supply | Yes, £5,000 | Rural homes with space for fuel storage |
| Electric boiler | About 26.3p | No | Small, well-insulated homes or flats |
| HVO in your current boiler | Higher than kerosene | No | Lower carbon without changing the heating system |
*Our approximate calculation using October 2026 prices: kerosene around 117p per litre, the Ofgem price cap for gas and electricity, a 90% efficient boiler and a heat pump efficiency (SCOP) of 3. Standing charges are excluded, and oil and LPG prices change week to week.
Is an air source heat pump a good replacement for oil?
For many homes, yes. A heat pump takes heat from the outside air and moves it into your radiators and hot water, producing around three units of heat for every unit of electricity it uses. That makes it cheaper to run than oil at 2026 prices, and it doesn’t need a tank, deliveries or a flue.
The catch is the upfront cost and the home itself. The median installed price under the Boiler Upgrade Scheme has been around £13,000, so the £9,000 grant for oil and LPG homes brings it down to roughly £4,000 before any extra radiator work. Heat pumps run at lower temperatures than boilers, so draughty homes may need better insulation or some larger radiators. You will also need space outside for the unit and usually room for a hot water cylinder. Our guide to how heat pumps work explains the basics, and the heat pump vs oil boiler comparison goes into the numbers.
What about a ground source heat pump?
A ground source heat pump works the same way but draws heat from pipes buried in the garden or a borehole. It is more efficient than an air source unit, particularly in cold weather, but the groundwork makes it considerably more expensive to install. It qualifies for the same £9,000 grant for oil-heated homes. It makes most sense for larger rural properties with plenty of land.
Is LPG cheaper than oil?
At 2026 prices, often yes per unit of heat, although LPG contract prices vary a lot between suppliers and areas. An LPG boiler works much like a gas boiler, so it is familiar, compact and can be a combi. You swap your oil tank for an LPG tank or bottles, usually rented from the supplier. The trade-off is that you are still on a fossil fuel with no price cap. See our LPG boiler installation page and our comparison of natural gas and LPG boilers.
Should I consider a biomass boiler?
Only if you have the space and are happy to manage fuel. Biomass boilers burn wood pellets, chips or logs and can heat a whole house, with a £5,000 Boiler Upgrade Scheme grant for rural, off-gas properties that meet the emissions rules. They need a large boiler, a dry fuel store and regular ash emptying, so they suit farms and large rural homes better than cottages.
Can I just switch to an electric boiler?
You can, and it is the simplest swap: no flue, no tank and almost silent. But electricity costs roughly twice as much per unit of heat as kerosene does, so running costs are high in all but the smallest, best-insulated homes. It can work well for a flat or a small bungalow, especially paired with solar panels or a cheap overnight tariff. Our electric boiler costs guide and the best electric boilers round-up cover the details.
What is HVO and can my oil boiler use it?
HVO, or hydrotreated vegetable oil, is a renewable liquid fuel often made from waste fats and oils. Trials in 150 homes found it cut carbon emissions by up to 88% compared with kerosene. Most modern oil boilers can run on it after a conversion costing roughly £500, which usually means a new nozzle, filter and oil line and some burner adjustment. It costs more per litre than kerosene, and not every fuel distributor delivers it yet, but it is the least disruptive way to cut carbon while keeping your boiler.
Do hybrid systems qualify for the grant?
No. A hybrid pairs a heat pump with a boiler that takes over in very cold weather. It can work well in homes that struggle to run on a heat pump alone, but the Boiler Upgrade Scheme doesn’t fund hybrid systems, so you would pay the full cost.
Are storage heaters an option?
In smaller homes, yes. Modern high heat retention storage heaters charge on cheaper overnight electricity and release heat through the day. They don’t need any pipework, which makes them handy for flats and cottages. You will still need a separate way to heat hot water, and in larger homes running costs and comfort usually fall short of a heat pump or boiler.
When does staying with oil make the most sense?
When your home isn’t ready for a heat pump, or the upfront cost isn’t right for you at the moment. Old, solid-walled houses with small radiators, listed buildings and homes with no outdoor space for a heat pump are often better served by a modern condensing oil boiler, which can burn noticeably less oil than a tired non-condensing one. It also keeps the door open to HVO later. Our best oil boilers guide compares the current models, and our oil boiler replacement service gives you a fixed price online.
Which areas are most likely to be weighing this up?
Anywhere oil heating is common: Northern Ireland, rural Wales (especially Ceredigion, Powys, Carmarthenshire and Pembrokeshire), Shropshire, East Anglia, the South West, Cumbria, Northumberland and rural Scotland. In Yorkshire, oil is widespread in the Dales, the North York Moors, the Pennine villages and the countryside around Skipton, Harrogate, Wetherby and Selby.
Oil boiler alternatives: quick answers
What is the cheapest alternative to oil heating to run?
At October 2026 prices, an air or ground source heat pump is usually cheapest to run, followed by LPG and mains gas where available. Electric boilers and direct electric heating cost the most.
Can I get a grant to replace my oil boiler?
Not to replace it with another oil boiler. The Boiler Upgrade Scheme in England and Wales gives £9,000 towards an air or ground source heat pump for homes heated by oil or LPG with no mains gas connection, until 31 March 2027, and £5,000 towards a biomass boiler. You must own the property and use an MCS certified installer.
Can I connect to mains gas instead?
Only if the gas network runs close to your home. In most oil-heated areas it doesn’t, and a long new connection can be very expensive.
Is oil heating being phased out?
There is no ban on replacing an oil boiler in an existing home. New-build rules in Scotland and, from 2027, England require low carbon heating in new homes.
With years of experience in boilers and home improvements in general, Myles Robinson is a passionate advocate for making home heating simpler, safer, and more affordable for households across the UK. With years of experience in the heating industry, Myles combines hands-on knowledge with a focus on customer-first service, helping homeowners choose the right boiler, understand their systems, and keep their heating running efficiently all year round. His articles break down complex topics into clear, practical advice you can trust.