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What is the cheapest way to heat a house?

Image of a radiator in the shape of a house

What's cheaper: gas or electric? We discover the most cost-effective way to heat a home

As the cost of living crisis continues to pinch, finding the cheapest way to heat a house is still as crucial as ever. The Office for National Statistics (ONS) recently revealed that around four in ten (41%) of bill-paying adults have struggled to afford their energy payments, with roughly one in five (19%) having trouble keeping comfortably warm in their own homes.

With the latest price cap from Ofgem, bill payers are finally seeing a slight reduction in their energy prices, but has this impacted which heating is cheapest to run?

We spoke to Stephen Day, the managing director and co-founder of boiler experts iHeat, and to home energy efficiency expert Becky Lane, co-founder and CEO of Furbnow, to find out how the latest price cap update affects us and to get some tips on how improving our home’s thermal efficiency might reduce our heating costs. Let’s get into it.

How much does it cost to heat a home?

The energy price cap update that came into effect in April reduced gas and electricity costs in England, Wales and Scotland. For a typical household, using both gas and electricity and paying by Direct Debit, the cap is now set at £1,690 per year – that’s £238 lower than the previous period’s cost of £1,928.

Currently, electricity costs 24.50p per kilowatt hour (kWh) with a 60.10p daily standing charge, while gas is priced at 6.04p per kWh with a 31.43p daily standing charge.

Although exact energy costs can vary based on a customer’s region and payment method (direct debit being a cheaper method than pay-on-receipt), British Gas estimates that this will average out to £1,258.33 per year for one or two people living in a one-bedroom house, £1,769.46 per year for two or three people in a three-bedroom house and £2,414.50 per year for four or five people in a five-bedroom house.

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Which is cheaper, gas or electric?

Gas has long been considered the cheaper energy option between the two. We spoke to Stephen Day, the managing director of iHeat and a certified heating engineer in his own right, to find out why this is the case.

“When it comes to heating your home, gas is still the cheapest option, being 18.46p cheaper per kW than electricity with the current price cap. This means a 12kW [gas-fired] boiler will take around 72.5p per hour to run, while a 24kW boiler will cost £1.45.”

A man puts his hand against the side of a radiator

Crunching the numbers, a 12kW electric boiler would cost around £2.94 per hour to run, and a 24kW boiler would cost £5.88 per hour, a significant amount more than a gas boiler. So, at least for now, gas central heating is simply cheaper than using a comparable electric boiler, but how does it compare to using electric heaters instead?

For context, electric heaters typically run at 2kW, costing around 49p per hour. “While this is technically cheaper per hour than running your gas boiler”, Stephen says, “this will only heat a very small amount of space in a room and will need to be run for much longer to get anywhere near the same level of heat.”

Electric heaters are great for generating quick blasts of heat, but they are less cost-effective than central heating overall due to their inferior heat distribution. Central heating can heat multiple rooms at once, with better efficiency, making gas-powered central heating the most cost-effective option by far.

What type of electric heater is the cheapest to run?

As we’ve just identified, an electric heater can be helpful if you want to focus some warmth in just one room for a short period. Let’s take a quick look at the different types of heaters:

  • Fan heaters: Noisy, yet easily accessible, electric fan heaters are good for quick bursts of heat in a specific area.
  • Convection heaters: Taking longer to warm up but being less noisy than fan heaters, convection heaters give an even spread of heat.
  • Oil-filled radiators: Once heated they have excellent warmth retention, even after the unit has been turned off.
  • Halogen heaters: Good for heating at close proximity, but not so effective in larger spaces.

Stephen comments that small 0.8kWh oil-filled heaters can cost around 19.6p per hour, while larger 2.5kWh units can cost 61.25p an hour. When you factor in the superior heat retention of these units, the most efficient type tends to be oil-filled heaters.

READ NEXT: Best oil-filled radiators

What can you do to reduce heating costs?

After ‘What heating is cheapest?’, ‘What can be done to reduce heating costs?’ is the follow-up question that everyone is asking. The answer lies in upgrading and updating some of your home’s features, along with a few simple, inexpensive adjustments that you can make. Becky Lane, CEO of energy efficiency firm Furbnow, is here to help.

Firstly, as heat rises, how well your loft is insulated greatly impacts your home’s thermal rating. Becky says, “A minimum of 270mm of insulation can retain heat and save you as much as £70 a year.”

You can improve your thermal efficiency further by continuing to insulate other areas of your home. Becky continues, “Most UK homes have cavity walls, meaning there’s a gap in the middle that can be filled. Some older houses have solid walls, in which case you can insulate these from the inside or outside, saving around £600 per year.”

If you can’t make these changes, some minor tweaks can still significantly impact your comfort and energy costs. To combat draughts, “Weather seals or weather stripping is a brilliant, quick and inexpensive way of insulating windows and costs as little as £3 per roll”, Becky says. “Thermal curtains are also a great option and can be picked up for around £16.”

The strategic placement of furniture can also impact your energy outgoings: “Simply move your big furniture, such as sofas, away from the radiator so it [the heat] can travel around the space evenly – even a partial block will limit the heat.”

Don’t forget that you can always save money on your energy bills by doing things like switching your traditional light bulbs for energy-saving LED alternatives – while it won’t affect the cost of heating your home, it could potentially save you up to £70 per year, based on a typical three-bedroom home.

So, whether it’s switching the type of energy you’re using to heat your home or upgrading your insulation, there are ways to improve your home’s thermal efficiency, combat any future energy price hikes and reduce your energy outgoings.

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