The Off-Grid Heat Pump Revolution: Replacing Oil and LPG

There are approximately 1.5 million homes in the UK that are not connected to the gas grid, according to DESNZ data. These off-grid properties — heated by oil, LPG, or electric storage heaters — represent the fastest-growing segment of UK heat pump adoption. The reason is simple economics: oil costs have been volatile and are trending upwards, LPG is consistently expensive, and the Boiler Upgrade Scheme now pays £9,000 towards an air-to-water or ground source heat pump that replaces oil or LPG in a home without mains gas (21 July 2026 to 31 March 2027, England and Wales). This is the off-grid heat pump revolution, and it is already well underway.

Why Off-Grid Homes Are Switching Fastest

According to MCS installation data, off-grid properties account for approximately 40% of all domestic heat pump installations despite representing only 5-6% of UK housing stock. This massive over-representation tells a clear story: the economics of switching from oil or LPG to a heat pump are significantly better than switching from mains gas.

There are several reasons for this:

• Higher fuel costs — oil and LPG are consistently more expensive per kWh of heat than mains gas, making the savings from a heat pump proportionally larger
• Price volatility — oil prices can spike dramatically (as in 2022), while heat pump electricity costs are more stable and predictable
• No gas grid option — these homes cannot switch to a cheaper gas boiler, so the comparison is always against expensive fuels
• Policy priority — the government has signalled that off-grid homes will be required to switch away from oil and LPG by 2035, making early adoption sensible
• Larger properties — off-grid homes tend to be larger detached properties with more garden space for heat pump units and ground loops

Oil vs Heat Pump: The Economics

Oil heating is inefficient and increasingly expensive. A typical oil boiler operates at 85-90% efficiency, meaning 10-15% of the oil you buy is wasted. By contrast, a heat pump delivers 3-4 units of heat for every unit of electricity consumed — an efficiency of 300-400%.

Worked example: 15,000 kWh of heat a year. Oil at about 11.4p/kWh (roughly 117p per litre including VAT, October 2026, indicative BoilerJuice average; heating oil is not price-capped and rose sharply in 2026 according to DESNZ) in an 85–90% efficient boiler. Heat pump at a seasonal COP of 2.8–3.5 on electricity at 26.32p/kWh (Ofgem price cap, 1 October 2026 to 31 December 2026). Maintenance figures are indicative. Use your own last oil delivery price for your home.

The key insight is that heat pump economics against oil are significantly better than against gas. Against mains gas the running-cost saving is small: on our standard example (11,500 kWh of heat, COP 3.2, 90% gas boiler) a heat pump costs about £946 a year on unit rates against about £1,018 for gas. Against oil, the worked example above saves about £720 a year on fuel at a seasonal COP of 3.2. With the £9,000 off-gas grant, the median net installed price is about £3,900 (DESNZ, 2026 Q2), so that saving pays it back in roughly five to six years, sooner if you would otherwise be replacing an old oil boiler.

LPG vs Heat Pump: The Economics

LPG (liquefied petroleum gas) is not price-capped, and we have not found a reliable current national price for bulk domestic LPG, so we do not quote one. Prices vary by supplier, contract and location. To compare, take your last delivery price per litre, divide by about 7 (LPG holds roughly 7 kWh per litre) and then by your boiler efficiency. Compare the result with a heat pump's cost of about 7.5–9.4p per kWh of heat (26.32p/kWh at a seasonal COP of 2.8–3.5).

LPG users also face the additional burden of tank rental fees (typically £50-100/year) and delivery premiums for remote locations. Eliminating these costs further improves the heat pump business case.

For properties currently using electric storage heaters, the savings are even more dramatic. Storage heaters turn one kWh of electricity into roughly one kWh of heat, so each kWh of heat costs whatever you pay per kWh on your Economy 7 or standard tariff (check your bill), against about 7.5–9.4p for a heat pump. For large homes on storage heating the saving can be substantial.

Grants and Funding for Off-Grid Homes

Off-grid homeowners have access to several funding streams that can dramatically reduce the upfront cost of a heat pump.

BUS values checked against GOV.UK, October 2026. Other schemes change often: check the scheme's own website for current amounts and eligibility.

For low-income off-grid households, it is possible to receive a heat pump and insulation at zero cost through the Home Upgrade Grant. Even for households above the income threshold, the £9,000 off-gas BUS grant covers about 70% of the median £12,908 installed price of an air source heat pump (DESNZ, 2026 Q2).

The Electricity Supply Question

One concern unique to off-grid properties is whether the electricity supply is adequate for a heat pump. Rural properties sometimes have limited electrical connections — single-phase supplies with lower capacity than urban homes.

The good news: most domestic heat pumps draw relatively modest amounts of electricity. A typical 8-12kW air source heat pump has an electrical input of 2-4kW — less than an electric shower or kettle. A standard 100A single-phase supply is sufficient for the vast majority of domestic installations.

Properties with older or limited electrical supplies may need an upgrade from their distribution network operator (DNO). This is usually free or low-cost for domestic connections, but can take 4-8 weeks to arrange. Your MCS installer should check your electricity supply capacity during the site survey and arrange any necessary upgrades before installation.

The Solar + Heat Pump Combination

Off-grid properties are often ideal candidates for solar panel installations — they tend to be detached houses with unshaded south-facing roofs. Combining solar panels with a heat pump is one of the most powerful energy saving strategies available.

A typical 4kW solar panel system generates approximately 3,400-4,000 kWh per year of free electricity. A heat pump consuming 3,000-4,000 kWh of electricity per year can therefore run largely on free solar power during daylight hours. Smart controls that prioritise solar electricity for the heat pump can reduce running costs by 30-50%.

Adding a battery (5-10kWh) allows solar electricity to be stored for evening and overnight use, further reducing grid electricity costs. The combined system — heat pump + solar + battery — can reduce heating costs to as little as £200-400/year for a well-insulated property. Compare that to £2,000+ on oil or LPG, and the savings are transformative.

What Happens to Your Oil Tank

Once your heat pump is installed and running, you need to deal with your oil tank. There are three options:

Option 1: Keep It Temporarily

Some homeowners keep the oil tank and boiler as a backup for the first winter. This provides reassurance but is rarely needed — modern heat pumps are reliable and work in all UK temperatures. If you keep the tank, you are still responsible for its condition and insurance implications.

Option 2: Decommission and Remove

The recommended approach. A specialist company will drain any remaining oil, clean the tank, disconnect it, and remove it from your property. Cost: £200-500 depending on tank size and accessibility. This frees up garden space, removes an environmental liability, and eliminates ongoing insurance requirements for oil storage.

Option 3: Repurpose

Some homeowners repurpose old oil tanks as rainwater storage or garden features. Check with your local authority regarding any planning or environmental regulations.

If your tank is underground, decommissioning is more complex and may cost £500-1,500. Underground tanks can be filled with an inert material and left in place, or excavated and removed. Your installer or a specialist tank removal company can advise on the best approach for your situation.

Example Off-Grid Scenarios

These are illustrative scenarios, not reports from specific homeowners.

Insulated farmhouse: oil to air source

A larger detached home that already has loft and cavity wall insulation is a strong candidate. It may need a bigger heat pump (around 12–16kW, set by the heat loss calculation), and it qualifies for the £9,000 grant if it has no mains gas and the heat pump replaces oil (until 31 March 2027). Because it uses more heat than the worked example above, the fuel saving is usually larger. Budget for removing the oil tank.

Rural cottage: LPG to ground source

A small cottage with a large garden could use a ground source heat pump with horizontal loops. Ground source usually runs more efficiently than air source but costs considerably more to install, so compare both. Replacing LPG off the gas grid, it qualifies for the £9,000 grant until 31 March 2027. Adding solar panels can offset part of the electricity use.

Highland bungalow: oil to air source plus solar

In colder parts of Scotland, size the heat pump for the local design temperature and expect a somewhat lower seasonal COP than in the south. The Boiler Upgrade Scheme does not apply in Scotland; check Home Energy Scotland for grants and loans. Solar panels generate least in winter, so treat them as a year-round offset rather than a winter heating source.

Challenges Specific to Off-Grid Properties

Installer Availability

Remote rural properties can struggle to find MCS-certified installers willing to travel. heat pump installation guide in Wales, the Scottish Highlands, and parts of southwest England. Getting multiple quotes may require casting a wider geographical net.

Electrical Supply Upgrades

As discussed above, some rural properties need electrical supply upgrades. This is usually straightforward but can delay installation by several weeks.

Older Building Fabric

Many off-grid properties are older, solid-wall constructions that need insulation improvements before a heat pump will work efficiently. The cost of insulation can be substantial — but the long-term savings and improved comfort make it worthwhile. The Home Upgrade Grant can cover insulation costs for eligible households.

Property Size

Off-grid homes tend to be larger than average, requiring bigger (and more expensive) heat pump systems. A 4-5 bedroom detached farmhouse may need a 16-20kW system, costing £2,000-4,000 more than a typical 8-12kW domestic unit. The BUS grant is a fixed amount regardless of system size: £9,000 when replacing oil or LPG off the gas grid (until 31 March 2027), otherwise £7,500.

Frequently Asked Questions

How much can I save switching from oil?

It depends mainly on how much heat your home uses. Worked example at October 2026 prices: 15,000 kWh of heat a year costs about £1,954 with oil (about 11.4p/kWh, roughly 117p per litre, in an 87.5% efficient boiler) and about £1,234 with a heat pump (seasonal COP 3.2, electricity at 26.32p/kWh), a fuel saving of about £720 a year. Larger homes that use more heat save more. Heating oil is not price-capped, so use your own last delivery price.

Can I get the BUS grant for replacing oil or LPG?

Yes, and it is higher. In England and Wales the Boiler Upgrade Scheme pays £9,000 towards an air-to-water or ground source heat pump replacing oil or LPG in a home without mains gas, from 21 July 2026 to 31 March 2027. Otherwise it is £7,500. You must use an MCS-certified installer.

Do heat pumps work in remote rural locations?

Yes. Air source heat pumps work anywhere in the UK. You need a standard electrical supply — which your installer should verify during the site survey.

What happens to my oil tank?

It can be decommissioned and removed for £200-500. Some homeowners keep it temporarily as backup, but most remove it once confident in their heat pump.

Is the electricity supply strong enough?

Usually yes. A typical heat pump draws 2-4kW of electricity — less than an electric shower. If your supply needs upgrading, your installer can arrange this.

Can I combine a heat pump with solar panels?

Absolutely. Solar panels can generate the electricity your heat pump needs, reducing running costs by 30-50%. This is one of the most effective energy-saving combinations available.