What is the cheapest way to heat your home?

Keeping your home warm and cosy can be expensive, especially as fuel bills rise. So find out what the cheapest home heating methods are here.

Find the Cheapest Heating

When it comes to discovering the cheapest way to heat a house, many people find the seemingly endless choices and decisions confusing. Is the cheapest way to heat a room using gas central heating or a wood-burning stove?  What is the most efficient way to heat your home?

We have explored a variety of options and looked to what is currently the various cheap ways to heat your home. At ServiceMagic we also have access to a range of heating experts, from central heating installers to gas boiler repairers.

Our network of trusted tradesmen will help you learn how to heat your home in the most cost-effective way.  Read on to learn more about the cheapest heating.

Explore Different Cheap Heating Methods

There are varying considerations to bear in mind and benefits to the different ways in which you can heat your home:

  • Firstly, as you wonder about the cheapest way to heat your house, think about the infrastructure first.  Make sure that you have sealed any draughty doors or window and have looked into proper insulation, especially in the roof.

  • A wood-burning stove ‘warms you twice’ once when you chop/collect the wood and again when you burn the wood.  They can be very cheap to run and very warming, but you will need to install a flue.

  • For heating key areas, Calor gas heaters are typically cheaper than electric heating. For some people it proves to be the cheapest form of heating a house.

  • Heating with a boiler – Most homes rely on a boiler for hot water and central heating. The initial purchase can be costly at approximately £2, 500 but they last 12 years on average and there are numerous boiler grants available. By law, if you’re installing a new boiler it must be an A rated condensing model and according to the Energy Savings Trust, and A-rated condensing boiler can save your around £235 a year off of your fuel bills.

The Main Cheap Ways to Heat Your House

Gas – 69% of homes have a gas boiler, says the Department of Energy and Climate Change (DECC), this makes it the most popular fuel choice. It is certainly one of the cheapest home heating methods available. Tim Bartlett, of Eco Hometec Ltd points out: “The most economic thing you can use is a natural gas condensing boiler – gas is about a third cheaper than electric.”

Electric – Not usually the cheapest way to heat a home.  It will cost you more than gas unless you get it from an environmentally-friendly renewable source such as solar PV or wind power.

Oil – This is currently widely used, but is unlikely to remain as one of the cheapest heating sources in the future.   If you live off of the gas mains then an oil-fired boiler may be an option, but oil is getting scarcer, meaning its prices can only rise. Using oil to heat your home is not particularly eco-friendly either.

Wood – Wood-fired boilers or stoves can actually be a fairly low cost, eco-friendly heating option if you replant the trees you burn or get wood from a sustainable local source. That way, the amount of CO2 emitted from burning wood is cancelled out by the amount it has absorbed over its lifetime. Paul Labus, from Bolney Stoves in Sussex says: “On average, a tonne of wood would cost around £100 and you may need around two tonnes for one winter.”

The Cost of Heating a House

What is the most economical way to heat a house?  Take a look at the current average annual fuel costs:

Type of boiler Average annual fuel cost
Wood £510
Electric £870
Non-condensing gas £730
Condensing gas £490
Gas LPG £830
Non-condensing oil £1,100
Condensing oil £740

*Figures are from Which? They are based on the heating and hot water demands of a three bed semi-detached, well insulated home and prices are derived from average fuel bill prices.

heat your home

Further Savings – Renewable Heating Options

There are so many interesting, greener choices when it comes to heating your home.  As we move further into the 21st Century, we need to get more creative about choosing heat sources for homes.

Even though energy is increasing in price and global warming is accelerating, only around 0.6% of household heat is produced by renewable sources in the UK, says the DECC. Installing a heat pump or solar thermal panels in your home may initially cost more than fitting a traditional boiler, but once in place, they are one of the cheapest heating systems available – utilising free energy from the ground, water, air or sun. Grants to install renewable heating may also be available to help with installation costs, so contact the local council as it may make on the cheapest house heating method for you.

Heat Pumps

Heat pumps work by extracting heat from the earth, air or water, depending on the system. The most popular type is the air source heat pump, in fact, a report by Prof David Mackay from the DECC states that they are the best heating choice for most homes in the UK. Air source heat pumps are easy to install, which makes them cheaper than ground or water source options.

Helen Durose, from Evergreen Renewables in Derbyshire explains: “Air source heat pumps are about the size of a fridge and fit neatly onto the back or side of your home.”

Ground source heat pumps are more difficult to fit as you need space in the garden to install the ground loops. However, heat pumps require almost no maintenance and last around 25 years; they can also be used in reverse to cool your home in the summer. Truly one of the great cheap ways to heat a house.

Solar Thermal Panels

Solar thermal panels use the suns energy to provide hot water and heating for the home.   As one of the most effective cheap ways to heat your house, they are very popular.

According to the Solar Trade Association, there are currently around 100,000 solar thermal systems in the UK; “far more than any other renewable technology,” points out Howard Johns, Chairman of the STA. To install solar thermal you will need a cylinder to store water in, the system can be connected to a traditional boiler. Solar thermal costs very little time and money to maintain and will last around 25 years. The downside is that you may still need a backup hot water system; according to the STA, solar thermal panels provide up to 65% of a household’s hot water needs.

“Solar thermal definitely benefits those who use lots of hot water, a family for instance, rather a smaller household,” says Jonathan Mione, from Intelligent Energy Solutions in Leicestershire.

Make Money with the Renewable Heat Incentive (RHI)

The government recently allocated £860 million of funding to the RHI, which was launched in November 2011, to provide cash payments to people who produce clean energy with heat pumps and solar thermal panels. Tariff levels will vary according to the size and type of technology, but it’s thought that those who invest will get fixed yearly payment for between 10 and 23 years – based on a metered or estimated output. It is up and running for businesses and will be open to domestic households from spring 2014.

How much can you save with renewable heating?

The table shows how much money, on average, you could save each year by replacing oil, gas, electric or solid fuel heating with a heat pump or solar thermal panels. It also shows how much you could earn per year under the RHI.

Type Cost Replacing oil heating Replacing gas heating Replacing electric heating Replaing solid fuel heating Potential  annual earning
Ground source heat pump £9000 – £17,000 £160 £70 £530 £370 £1,000 – £2,000
Air source heat pump £6,000 – £10,000 £160 £70 £530 £370 £1,000 – £2,000
Solar thermal £4,800 £55 £50 £80 £60 Up to £400

*Figures are from the EST and are based on installation in a three bed, semi detached house.

Radiators Vs underfloor heating

To make your fuel bills even cheaper, install underfloor heating, which is much more efficient than heating with radiators. Underfloor heating is most cost-effective when installed in a new build property and works especially well with a ground source heat pump. Underfloor heating produces more comfortable, evenly spread warmth at a lower temperature than radiators, which makes it more efficient. Mark O’Brien, who installs underfloor heating in Sussex, says: “I would say that on average, underfloor heating in a modern home would cost around 25-30% less to heat than a home with radiators would.”

Quotes for Cheap Home Heating

Enjoy cheaper heating thanks to some expert advice from ServiceMagic. Use us to research your preferred best way to heat your home and get up to 4 quotes from trusted tradesmen who specialise in heating services in your local area to compare installation prices.

joe says:

I wander if it is cheaper to run water through the underfloor heating ? can you answer, and is it cheap to install

mjackson says:

Hi Joe,
we recommend that you take a look at our cost guide where you can find further information on the benefits of underfloor heating as well as how much it it might cost. You will also have an option on the page, to request official quotes by filling in our online form.

Pat Dixon says:

Which is the cheapest way to heat your home. Have the heating on constantly at a low temperature or on a timer?

mjackson says:

Hi Pat,

Thanks for your post.

Prices are generally on the up as you may have seen however, depending on what energy you use, there are cheaper options.

There are numerous types of fuel available to heat most homes in today’s day and age, which allows you to choose the best and cheapest option for you. Listed below you will find information on several of the various heating methods as well as the benefits of each:

Gas – According to the Department of Energy and Climate Change (DECC), 69% of homes have a gas boiler. A natural gas condensing boiler is far cheaper than electric heat, so is therefore a great option if you live in a larger home.
Electric – Electric heating may be a good idea if you live in a smaller space or if you get it from a renewable source, such as solar PV or wind power.
Wood – While far less popular, wood fired boilers or stoves can heat a home at a fairly low cost and are an eco-friendly option.

So after looking at all of the different forms of heating, which is the cheapest? Unfortunately, there is not one option that is the overarching “winner” when it comes to cost. The cheapest heating method will vary per household, as it is dependent upon what kind of property you have, whereabouts in the UK you live, and how much money you are willing to spend up front and long-term. However, the above information should give you a better idea of what is the best choice for you and it will help you decide the best way to heat a home tailored to your specific needs.

Should you decide on what energy would be best for you and require quotes for any work, please feel free to visit our heating section and we will try and match you with 4 local professionals who will each contact you to arrange the quotes.

We hope that this information helps.

Mark @ ServiceMagic

Elaine says:

I would love to try the renewable heat incentive. But, and this is a big BUT, I do not have the money for the installation, and, because I do not claim benefits, but I am on low wages, because I work full time hours, I do not qualify for any of the “free” offers. Something I have noted is that one of the conditions for these so called free offers are that you must be a home owner, there are few people who claim benefits who are home owners, but the home owners who would benefit from varying levels of help to install such heating sytem in their homes slip through the net on the grounds that they do not claim benefits. So surely it would make sense to have these schemes means tested and offered free for those who have an income of less than say £20,000 per year, but those who have higher incomes pay a different percentage towards the cost of installation of such a system. The same applies to solar panels….if government and suppliers screwed the bobbin they’d realise that they are aiming “free” installation at the wrong group of people, and this will explain why take up of these offers is so low.

mjackson says:

Hi Elaine,

Thanks for your post.

You could take a look at the Solar feed in tariff that was introduced in 2010 however there could be costs involved so its best to find a a list of local suppliers in your area.

For further information , we recommend that you visit the Energy savings trusts ”finding an installer” section.

Who can claim the tariffs?
Anyone who installs a renewable energy system producing electricity is eligible to claim the tariffs as long as they produce less than 5MW of power. Virtually every property in England, Scotland and Wales is eligible.

How much are the tariffs?
The main amount paid by the Feed-In Tariffs varies depending on the size and type of system.

We hope that this information helps.

Mark @ ServiceMagic

Justine.Walker@rocketmail.com says:

Is it cheaper to leave heating on with rad on low thermostat settings or heat the house when needed?

mjackson says:

Hi Justine,

This one divides opinion. The Energy Saving Trust and British Gas say you’ll save energy, and therefore money, by only having the heating on when it’s required. Using a timer is best, because your thermostat is designed to turn your heating system on and off to keep your home at the temperature you set it.
However, another school of thought says it is best to keep it on at a low temperature all day and turn all radiator valves to the max, and the boiler down to the minimum. So it’s a grey area – Yet as a balance, if you go down the route of having the heating on only at certain times, you could switch the timer on a little bit earlier, so the house will be nice and toasty when needed, but you’re not pumping out energy all day.

We hope that this information helps.

Mark @ ServiceMagic

Attila says:

The problem is that a decent insulation method does not seem to exist in the UK.

Cavity walls are a joke.
As well as the cavity wall insulation.

The great way would be the external wall insulation, but it does not seem to exist in this country. And it would also make the houses nicer, but people are insisting on the red brick look tradition.

d mcmartin says:

with electric immersion heater is it better to run once or twice a week or to run for an hour a day every day?

mjackson says:


Thanks for your post – this would depend on your usage requirements so we suggest taking a look at the Energy saving trust website which will have further information on how to save money on your energy usage.

We hope that this helps.

Mark @ ServiceMagic

Tackroyd says:


How much should it cost to install 25 sq m of electric underfloor heating inc labour to existing house.

Also what would be the running costs per hour viz a vie a gas radiator. We are having a new kitchen and I want to get it right!!



mjackson says:


Thanks for your post.

Please complete our online heating form in order to be contacted by up to 4 local contractors who will each provide you with a free no obligation quote for any work you need doing.


Mark @ Servicemagic

vince says:

We have a very old (40 years) warm air heating system run on gas.
We are looking to replace but we don’t know what with. (Warm air or gas central heating)



mjackson says:

Hi Vince,

Thanks for your post.

I recommend you take a look at our Warm Air Central Heating Advantages and Disadvantages article as it will give you some really useful information that may help you decide which one is best for you.

We hope this helps.

Mark @ Servicemagic

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