Should I Replace My Gas Boiler?

Over the 10 years that we have been installing heat pumps, customers off the mains gas grid (oil, LPG, solid fuel, and electric boilers or storage heaters) have had incentives and fuel saving returns that provide a clear economic benefit for installing a heat pump.

For those consumers with a mains gas connection then the economic returns have been more marginal. The price of electricity has generally been 350% to 400% more than the gas price per kWh meaning that there has been little if any running cost saving for mains gas customers.

The Energy Price Guarantee from 1st October will freeze prices for 2 years at 10.3p per kWh for gas and 34.0 p per kWh for electricity (Martin Lewis 12th Sept 2022).

These prices mean that if you install a good quality heat pump with a Seasonal Coefficient of Performance in excess of 3.5 then the average home will save around £500 per year by switching from a gas boiler to a heat pump (with caveats around how you use your heating).

Further we believe the relationship between electricity and gas prices will continue to change fundamentally in the coming years – swinging the balance still further in favour of heat pumps:

• The retail electricity price is artificially inflated because it is tied to the wholesale price of gas – even though on average 50% of electricity is generated by renewable sources (most renewables investors are rubbing their hands…). In September 2022 Ofgem are actively consulting on removing this link to the gas price – such a move is supported by large parts of the energy supply industry.
• The government chooses to load the cost of its energy saving and renewable measures onto the electricity price and not the gas price – penalising renewable electricity generation whilst rewarding the burning of fossil gas. 
• The continued uptake of renewables and nuclear for electricity generation to decarbonise will continue to reduce the electricity price relative to gas.
• The geopolitical situation is driving up fossil fuel prices. 
• Energy supply concerns will push governments to further develop independent renewables and nuclear.
• The government will continue to incentivise the domestic uptake of renewable heatingsystems (but at a lower level) and will bear down on the use of fossil fuels for heating purposes through regulation – this is already evident from proposed changes to building regulations for new build properties.