How to Cut Your Heating Bills by Switching Fuels in 2026
With heating oil at 103.2p/litre and mains gas at 6.04p/kWh, switching fuels could save hundreds. Here's how to compare your options.
Energy costs remain a major concern for UK households. If you're locked into an expensive heating fuel, now is the time to evaluate alternatives. With heating oil at 103.2p/litre, mains gas at 6.04p/kWh, electricity at 24.5p/kWh, and wood pellets at 7.2p/kWh, the gap between fuels has widened significantly. Switching could deliver meaningful savings—but only if you choose the right fuel for your home.
Understand your current costs
Start by calculating what you're actually paying per kilowatt-hour (kWh) of heat delivered. If you use heating oil, divide your annual consumption by 10.15 (the energy content of one litre) to get kWh. Compare this to the pence-per-kWh rates above. Many oil users pay substantially more than mains gas customers, making a switch worthwhile if your property is connected to the grid.
Check fuel availability for your property
Mains gas is the cheapest option at 6.04p/kWh, but only if your postcode is connected. Use Ofgem's postcode checker or contact your local network operator. If gas isn't available, wood pellets at 7.2p/kWh offer the lowest alternative, though they require a compatible boiler and storage space. Electricity at 24.5p/kWh is expensive for heating unless paired with a heat pump—which delivers 3–4 units of heat per unit of electricity consumed.
Calculate payback periods
Switching fuels involves upfront costs:
- Gas boiler installation: typically £2,000–£4,000
- Oil to gas conversion: £3,000–£5,000 (includes tank removal)
- Biomass boiler: £8,000–£12,000 (eligible for government grants in some cases)
- Air source heat pump: £10,000–£15,000 (often grants available)
If you currently spend £1,500 annually on heating oil and could halve that with gas, you'd recover a £3,000 conversion cost in four years. Use this simple formula: Conversion cost ÷ annual savings = payback period in years.
Take action today
1. Get quotes: Compare heating oil, mains gas, electricity, and wood pellets on HeatYourHome.uk to see live supplier rates.
2. Request a surveyor visit: Most installers offer free assessments and can identify hidden issues (undersized pipes, poor insulation) that affect fuel choice.
3. Check for grants: Government funding for heat pumps and biomass systems changes frequently. Verify current eligibility before committing.
4. Negotiate timing: If switching requires a boiler replacement anyway, bundle the works for better rates.
Energy volatility shows no signs of stopping. Taking control of your heating fuel choice—rather than accepting your current supplier's rates—is one of the most direct ways to protect your household budget.