'Urgent change to heat policy required'

Published:  05 December, 2016

OFTEC is calling for an urgent change to the UK's low carbon heat policy, as data shows oil is still the cheapest domestic heating fuel.

Despite the average cost of heating a typical home on oil rising over the last quarter, the latest industry figures from the Sutherland Tables reveal that oil remains the cheapest of all major domestic heating fuels, trumping mains gas on price by some 18%.

According to the latest quarterly data, the average annual cost of heating a three-bedroom home in Great Britain with an oil condensing boiler is currently £818 per year - up 9% on last quarter.

However, heating oil is still 18% less expensive than mains gas, which is the second cheapest option at £967 per year to heat the same average home. It is also 42% cheaper than an LPG condensing boiler at £1,402 per annum, and 49% cheaper than electric storage heaters at £1,600 per annum.

According to the Tables, running an oil condensing boiler also remains cheaper than any renewable heating options; currently being 44% less expensive than air source heat pumps (with radiators) at £1,453 per year, and 37% cheaper than biomass (wood pellets) at £1,301 per annum.

While oil prices have increased since the summer period, costs have once again stabilised, despite heading into the main heating season.

OFTEC chief executive officer Paul Rose said: "With oil remaining so competitively priced, it's no surprise that consumers are choosing to stick with, or even switch to oil. This has led to sales of oil condensing boilers reaching a nine-year high at a time when purchases of gas boilers are static. There has also been a marked increase in oil boiler replacement work for technicians and OFTEC is receiving a growing number of enquiries from gas technicians looking to expand into the oil sector."

Although OPEC has agreed to cut oil production for the first time in eight years to reduce market oversupply, which will inevitably result in price increases, OFTEC believes it is unlikely that the cost of heating oil over the coming months will rise to anywhere near the highs seen in Spring 2013.

Mr Rose said: "With the UK looking almost certain to miss its EU 2020 targets for renewable energy, a change in heat policy is urgently needed. Cost remains the key driving factor for most consumers, so a policy that focuses on carbon reduction and energy efficiency, and which is both practical and affordable, must be implemented.

"OFTEC has long championed the idea of a universal boiler replacement scheme to help consumers upgrade to modern condensing models. Our independently verified research shows this approach would, for the same government spend, prove five times more effective in reducing carbon emissions than the domestic Renewable Heat Incentive scheme – and cut energy bills too.

"We were heartened to see such an initiative launch in London this spring and hope a similar scheme will now be rolled out across the UK."

OFTEC has written to the new government ministers suggesting a number of principals which should be adopted in new policy and is awaiting a response.

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