Switch to Wood Pellets: Save 93% vs Heating Oil This Winter
Wood pellets cost just 7.2p/kWh compared to 99p/litre for heating oil. Here's how to make the switch and cut your heating bills dramatically.
If you're still burning heating oil, you're paying a premium. At 99p per litre, oil heating costs roughly 25p/kWh — nearly three times the price of wood pellets at 7.2p/kWh. For homeowners with oil tanks, switching to pellet heating could save thousands annually.
Why Wood Pellets Beat Oil Right Now
The cost gap has never been wider. While mains gas sits at 6.04p/kWh and electricity at 24.5p/kWh, wood pellets remain the cheapest option for UK homeowners with suitable heating systems. They're also more stable than fossil fuels — pellet prices fluctuate less dramatically than oil, which swings with global crude markets.
Three Steps to Switch
1. Check if a pellet boiler suits your home
Pellet boilers need:
- Space for a storage hopper (indoor or outdoor)
- Annual chimney maintenance
- Access for bulk pellet deliveries
- Typical installation cost: £4,000–£8,000
They work in most properties, from terraced houses to rural cottages. If you have an oil tank, you already have heating infrastructure — a boiler swap is often straightforward.
2. Compare current heating costs accurately
Don't just look at headline prices. Calculate your cost per kWh:
- Heating oil: 99p ÷ 10 kWh per litre = 9.9p/kWh
- Wood pellets: 7.2p/kWh
- Mains gas: 6.04p/kWh (cheapest if available)
If you're off-grid or live where gas isn't available, pellets beat oil decisively. Compare wood pellet suppliers to lock in bulk delivery rates.
3. Calculate your payback period
If you currently spend £1,500 annually on heating oil and pellets would cost £500, you'd save £1,000 per year. A £6,000 installation pays for itself in six years — plus you'll benefit from government support schemes like the Boiler Upgrade Scheme, which may cover up to £5,000 of costs.
Don't Overlook Alternatives
Before committing to pellets, compare other options:
- Mains gas remains cheaper if you're connected (6.04p/kWh)
- Electricity via heat pumps works well in modern, well-insulated homes
- Oil efficiency upgrades (boiler servicing, tank insulation) cost less upfront
Compare all heating fuels side by side to find your lowest-cost option.
Your Action This Week
Request three quotes from pellet boiler installers. Ask specifically about their supplier relationships — some bundled delivery discounts can cut pellet costs by another 10%. Then model your savings using actual quotes, not headline prices.
The maths is compelling: wood pellets are genuinely cheaper for most oil customers right now. The only question is whether installation costs fit your budget.