Wood Pellets Now Cheaper Than Gas: Should You Switch?

For the first time in months, wood pellets are genuinely competitive with mains gas on a per-unit basis. At 7.2p/kWh against the Ofgem-capped 6.04p/kWh for gas, the gap has narrowed to just 1.16p—and that headline figure masks far more interesting economics underneath.

The Real Maths

Raw pence-per-kilowatt-hour is only part of the story. What matters is total heating cost, which depends on:

• Boiler efficiency — modern condensing gas boilers run at 90%+, but pellet boilers typically achieve 85-90%
• Installation costs — switching to pellets requires a new boiler, flue system, and storage space; expect £8,000–£15,000 upfront
• Delivery and storage — pellets need dry, accessible storage; bulk deliveries are cheaper but tie up capital
• Carbon credentials — if decarbonisation matters to you, this changes the equation

At current prices, a household burning 12,000 kWh annually (typical for oil or gas heating) would pay roughly £864 in pellet fuel costs versus £726 for mains gas. That £138 annual gap would take 60+ years to justify a £10,000 boiler upgrade through fuel savings alone.

Why The Shift Matters

What's genuinely shifted is stability. Mains gas prices are tied to global markets and political instability—see the 4% October price rise just announced by Ofgem. Wood pellets, while still vulnerable to supply chain shocks, come from European forestry operations with more predictable logistics. For homeowners burned by volatile energy costs since 2021, predictability has real value.

Who Should Actually Switch?

Pellet heating makes genuine sense if you:

• Already have off-grid heating (oil or LPG) and face high delivery costs
• Live in a rural property where gas connection is expensive or impossible
• Have substantial upfront capital and a 15+ year horizon
• Prioritise carbon reduction under new Building Regulations
• Own a property where bulk pellet storage is practical

For most urban and suburban gas-connected homes, the numbers simply don't stack up yet.

Your Next Move

If you're on mains gas, focus on maximising what you have: draught-proofing, smart thermostats, and boiler servicing deliver 10-15% savings with minimal outlay. If you're heating with oil or LPG, compare wood pellet options seriously—the comparison is far tighter and potentially worth exploring.

Check your current fuel type and annual usage, then run the sums yourself rather than accepting either extreme position. The "wood is cheaper" headlines are technically true but strategically misleading for most households.