Heat Pump vs LPG Boiler: Cost and Efficiency

LPG users often pay more for heating than mains gas customers, with no price cap and no ability to shop around while tied to a rented tank. Switching to a heat pump can cut running costs when your LPG price is above about 7.9p per kWh, and the £9,000 BUS grant for LPG-heated homes without mains gas (until 31 March 2027) brings the upfront cost close to that of a new LPG boiler.

If you heat your home with LPG (liquefied petroleum gas), you are paying some of the highest heating costs in the UK. LPG has historically cost more per unit of heat than mains gas, the price is not capped, and it can rise sharply with global energy markets and seasonal demand. Prices vary by supplier, so use your last delivery price when comparing.

Switching to a heat pump eliminates this expense and volatility. This guide provides a complete comparison of heat pumps versus LPG boilers for UK homes — covering cost, efficiency, practicality, and the specific considerations for rural properties where LPG is most commonly used. For a broader fuel-type comparison, see our heat pump vs gas boiler pillar guide.

Why LPG Users Have the Most to Gain

Among all heating fuels commonly used in the UK, LPG produces the weakest financial case for continuing. Here is why:

Gas and electricity at the Ofgem price cap for 1 October 2026 to 31 December 2026 (7.97p and 26.32p per kWh). There is no capped LPG price: use the price per kWh (or per litre) from your last delivery.

A heat pump at standard capped electricity rates produces heat for about 8.8p per kWh. If your LPG costs more than about 7.9p per kWh of fuel, the heat pump is already cheaper per unit of heat, and a heat pump tariff can widen the gap.

Installation Cost Comparison

LPG Boiler Replacement

• LPG boiler replacement: £2,500 to £4,000 installed
• LPG tank rental: £80 to £150 per year (ongoing)
• LPG tank purchase (if owned): £1,500 to £3,000

Note that LPG customers often rent their tank from the gas supplier, which ties them into that supplier's pricing. This lack of choice further reduces your ability to control costs.

Heat Pump Installation

• Before grant: £10,000 to £14,000 (typical rural property)
• After the BUS grant (£9,000 for air-to-water or ground source heat pumps replacing LPG in homes without mains gas, 21 July 2026 to 31 March 2027, England and Wales): about £1,000 to £5,000

After the grant, the net cost of a heat pump is comparable to or only slightly more than a new LPG boiler — especially when you factor in ongoing tank rental costs that the heat pump eliminates. For a detailed breakdown of heat pump costs, see our dedicated guide.

Running Cost Comparison

Running costs depend on the price you pay for LPG, which varies by supplier. The worked examples below show the heat pump cost at the current electricity cap and the LPG figure to multiply by your own price.

Worked Example: Three-Bedroom Rural Cottage

Annual heat demand: 14,000 kWh

The break-even point is an LPG price of about 7.9p per kWh: above that, the heat pump is cheaper to run before you even count tank rental. LPG prices vary by supplier and are not capped, so use the price from your last delivery bill. A heat pump or time-of-use electricity tariff can lower the heat pump figure further (check the supplier's current rates). Rates last reviewed October 2026.

Worked Example: Four-Bedroom Detached Farmhouse

Annual heat demand: 22,000 kWh

For larger properties with higher heat demands, every penny of LPG price above the break-even point is multiplied across more kWh, so the potential saving is larger. See our running costs guide for more scenarios.

Efficiency Comparison

An LPG boiler operates at 88-92% efficiency — similar to mains gas. It burns fuel and extracts heat from the combustion gases. It can never exceed 100% efficiency.

A heat pump operates at 250-350% efficiency (COP 2.5-3.5), delivering two and a half to three and a half times more heat energy than the electricity it consumes. This fundamental efficiency advantage is why a heat pump can be cheaper to run despite electricity costing more per unit than LPG. For a deeper dive into efficiency metrics, read our lifespan and efficiency guide.

Rural Property Considerations

LPG heating is most common in rural properties that are not connected to the mains gas grid. These properties have specific characteristics that are relevant to the heat pump comparison.

Advantages for Rural Heat Pump Installations

• Space: Rural properties typically have ample outdoor space for the heat pump unit — there is no issue with cramped gardens or proximity to neighbours
• Noise: With fewer neighbours nearby, the modest noise from a heat pump is rarely a concern
• Existing systems: Many LPG-heated homes already have system boilers with radiators and hot water cylinders, which makes conversion easier
• Planning: Rural properties often have fewer planning restrictions for permitted development

Potential Challenges

• Older buildings: Some rural properties are older with solid walls and less insulation. This increases heat demand and may require a larger heat pump. However, many can still be heated effectively
• Listed buildings: If your property is listed, you may need listed building consent for the outdoor unit. This is usually achievable with careful placement — see our listed building guide
• Electricity supply: Some rural properties have limited electrical supply (single phase, lower amperage). Most heat pumps work on standard single-phase supply, but very large systems may need an upgrade

Use the suitability checker to assess your property's readiness for a heat pump.

What Happens to the LPG Tank?

When you switch from LPG to a heat pump:

• If you rent the tank: Contact your LPG supplier to arrange collection. You will need to give notice (typically one to three months). Any remaining gas should be used or can sometimes be refunded. Once collected, your rental payments stop.
• If you own the tank: You can have it drained and removed by a specialist. This costs £300 to £600.

Either way, you reclaim a significant area of your property — LPG tanks are large and the exclusion zone around them further limits use of the surrounding space.

Locked-In Contracts and Switching Freedom

Many LPG customers are tied to their supplier through tank rental agreements, making it difficult or impossible to shop around for better gas prices. This is a significant disadvantage — you are effectively a captive customer.

Switching to a heat pump breaks this dependency entirely. You buy electricity from the open market, where you can switch supplier, negotiate rates, and take advantage of competitive tariffs. Combined with solar panels, you can generate your own electricity and reduce costs even further.

Environmental Impact

LPG produces approximately 241g of CO2 per kWh of heat (accounting for boiler efficiency). A heat pump at COP 3.0 produces approximately 50g of CO2 per kWh of heat.

Switching from LPG to a heat pump reduces your heating emissions by roughly 80%. For a property using 14,000 kWh of heat per year, that is a saving of approximately 2,700 kg of CO2 annually. Read our environmental impact comparison for deeper analysis.

Our Verdict

For LPG users, switching to a heat pump is the most financially rewarding move available. If your LPG price is above about 7.9p per kWh, the heat pump is cheaper to run, and the £9,000 grant keeps the net installation cost low. Work out your own figures using your last delivery price.

Beyond the financial case, you eliminate tank rental costs, supplier lock-in, delivery logistics, and the environmental risk of gas storage. You move to a cleaner, simpler, more predictable heating system.

If your LPG boiler is approaching the end of its life, now is the time to act. Government funding for the BUS grant is confirmed to 2029/30, though the £9,000 off-gas rate runs only until 31 March 2027, and heat pump installation is zero-rated for VAT until 31 March 2027. Request a heat pump quote to see your specific costs after the grant, or use the calculator for an initial estimate.

Frequently Asked Questions

How much can I save by switching from LPG to a heat pump?

It depends on what you pay for LPG, which varies by supplier and is not price-capped. At the 26.32p/kWh electricity cap, a heat pump at COP 3.0 delivers heat for about 8.8p per kWh. If your LPG costs more than about 7.9p per kWh of fuel (check your last delivery bill), the heat pump is cheaper to run, and you also stop paying tank rental (typically £80 to £150 a year).

Is the BUS grant available for replacing LPG boilers?

Yes. If your home has no mains gas connection and is heated by LPG, the Boiler Upgrade Scheme grant is £9,000 for an air-to-water or ground source heat pump (21 July 2026 to 31 March 2027, England and Wales), instead of the standard £7,500. Your MCS-certified installer applies and deducts the grant from your quote.

Can I switch supplier if I'm in an LPG tank rental contract?

When switching to a heat pump, you will need to end your LPG contract. Review the terms for any early termination fees. In most cases, these are modest and are quickly offset by the savings from the heat pump. Some suppliers will waive fees if you are decommissioning entirely.

Will a heat pump work in my rural property?

Almost certainly yes. Rural properties are often well-suited to heat pumps — they have space for the outdoor unit, existing heating systems with radiators and cylinders, and fewer noise concerns. Check your suitability.

What heat pump tariffs are available?

Several energy suppliers offer heat pump or time-of-use tariffs with cheaper off-peak rates. Rates are regional and change often, so check each supplier's current rates (last reviewed October 2026). Ask potential energy suppliers about heat pump tariffs when planning your switch.

Do I need three-phase electricity for a heat pump?

No. Most domestic air source heat pumps operate on standard single-phase electricity supply. Only very large systems (16 kW+) may require three-phase power, which is uncommon for typical residential properties.