Wood Pellets Hit 7.2p/kWh: Is Biomass Now Cheaper Than Gas?
Wood pellet heating costs have fallen to their lowest point in years. We compare the maths against mains gas and oil to help you decide.
Wood pellets are now trading at 7.2p/kWh — undercutting mains gas (6.04p/kWh) when you factor in boiler efficiency, and dramatically cheaper than heating oil at 100.4p/litre. For homeowners considering their heating options in 2026, this represents a genuine cost shift worth investigating.
But before you call a biomass installer, the maths demands closer scrutiny.
The Efficiency Factor
Raw price per unit tells only half the story. Modern gas boilers convert fuel at 90%+ efficiency, while biomass boilers typically achieve 85-90%. This means:
* A gas boiler needs 6.71p/kWh of fuel to deliver 1 kWh of usable heat (6.04p ÷ 0.90)
* A biomass boiler needs 8.0p/kWh to deliver the same (7.2p ÷ 0.90)
On these figures, gas remains cheaper to run. However, installation costs matter enormously. Gas requires mains connection; biomass requires storage space, a chimney, and a £5,000–£10,000 upfront investment.
Why Pellet Prices Have Fallen
The recent drop reflects two trends:
* Increased supply: European pellet manufacturers have expanded capacity
* Reduced demand: Fewer UK homeowners are switching to biomass compared to 2023–2024, when gas prices spiked
This is cyclical. If gas prices rise again, pellet demand — and prices — will follow.
Who Should Consider Wood Pellets?
Biomass heating makes sense if you have:
* No mains gas connection (rural properties relying on oil or LPG)
* Space for a bulk storage hopper (ideally 10+ tonnes of pellets annually)
* Plans to stay in the property for 10+ years (to recoup installation costs)
* Willingness to maintain the system (annual sweeping and servicing required)
For urban homeowners with gas on the street, the economics don't yet stack up.
Compare Your Options Now
The best heating fuel for your home depends on what's available and your long-term plans. Use our comparison tools to lock in current rates:
* Compare wood pellet suppliers
Take action today: If you're in a property without gas, get quotes from two biomass engineers. Calculate the payback period against your current fuel cost. A five-year break-even might justify the switch; a fifteen-year payback probably won't.
Energy markets move quickly. The 7.2p figure today may not hold by winter. Lock in your best rate now, and revisit your heating strategy annually.