Wood Pellets Hit 7.2p/kWh: Could Biomass Beat Gas This Winter?

Wood pellets are winning the price war. At 7.2p/kWh, they undercut mains gas (6.04p/kWh Ofgem cap) and demolish heating oil (99.4p/litre) by a decisive margin. For homeowners with biomass boilers or stoves, this represents genuine value as energy costs remain stubbornly high across the board.

However, the headline price tells only part of the story.

The Real Cost Comparison

While wood pellets appear cheaper per kilowatt-hour, efficiency matters. A modern gas boiler converts roughly 90% of fuel energy into usable heat. Biomass systems typically achieve 85-90% efficiency depending on model and maintenance. Factor in:

* Installation costs: Biomass boilers require £8,000–£15,000 upfront investment

* Storage space: Pellet hoppers demand dedicated room—a barrier for many UK homes

* Supply chain volatility: Pellet prices fluctuate with European production and shipping costs

* Maintenance: Annual servicing keeps efficiency high but adds recurring expense

The Gas Alternative Remains Stable

Mains gas at 6.04p/kWh under the Ofgem price cap offers simplicity and familiarity. It's the incumbent choice for 80% of UK households, and for good reason: established infrastructure, no storage hassle, and proven reliability. The cap protects consumers from the worst market volatility, though recent evidence suggests planetary warming may intensify energy demand cycles going forward.

Heating Oil's Rough Ride

At 99.4p/litre, heating oil remains punishing for off-grid homes. Rural properties without mains gas face a stark choice: upgrade to biomass or endure significantly higher bills.

What You Should Do Now

1. Audit your property type: Do you have mains gas access? Space for pellet storage?

2. Compare your current fuel: Check mains gas rates, heating oil prices, and wood pellet costs specific to your postcode

3. Think long-term: If you're locked into oil heating beyond 2030, biomass becomes genuinely attractive despite capital costs

4. Check grant eligibility: The Boiler Upgrade Scheme still offers support for biomass installation in some cases

The Bottom Line

Wood pellets win on price, but only if your home can accommodate them. For the 16 million UK households on mains gas, the current cap provides protection and predictability. For the 1.5 million relying on heating oil, rising costs make the biomass investment case increasingly compelling—even accounting for upfront expense.

Market conditions suggest energy diversification will accelerate this decade. Whether that means installing biomass, locking in fixed gas rates while they're available, or upgrading insulation to reduce demand across the board, the time to assess your options is now, not when winter bills arrive.