How long will a new boiler take to pay for itself?

Greenow

I have this week had a visit from a Warm Front Engineer (I am eligible as I receive Pension Credits).

My boiler, (I think it is a "Potterton Kingfisher 11") he described as being 25% energy efficient (i.e. 75% of the heat generated was lost up the flue). He said that newer boilers are up to 93% energy efficient, and only lose 7% of the heat generated.

That sounds like a huge difference.

Warm Front will not replace my boiler though because it is working. He did say that if it stops working, then they would come out and replace it quite quickly (but the thought of losing my boiler in the middle of winter and having to wait for Warm Front to get organised and come out to do the work scares me a little - they haven't seemed particularly efficient or well organised in my dealings with them).

He did say that a modern replacement would cost between £3,000 and £5,000.

Looking back over my accounts, I have spent £4,096 on LPG since 1st January 2010. So I'm guessing my consumption is between about £2,500 and £3,000 each winter/year. I did switch at the beginning of that to Flogas and from what I can see, my rate is reasonably competitive - my last delivery was 38p per unit (it was 30p per unit when I switched). I am out of contract soon and able to shop around again (though that is a different story).

So my question: does my maths below work? Does the logic follow?
- I spend about £2,750 per year on fuel for a 25% energy efficient boiler, so actually receive about £687 worth of heat.
- If I had a 93% energy efficient boiler, I could generate £687 worth of heat for about £740
- A new boiler would save me approximately £2,000 per year in fuel costs and therefore if I paid for a £4,000 installation myself, it would pay for itself within 2 years and show a profit from the 3rd year onwards.

If those numbers are accurate, it seems a pretty simple decision to get a new boiler, but I find it hard to believe my figures, or my conclusions, can be accurate.

HappyMJ

He is lying to you. No boiler is only 25% efficient. Do you have the exact model number? The ones I have found are 65% efficient.

What have they recommended?

£2,750*0.65/0.90=£2,000 You should save £750 per year on the LPG. New boilers have a lifespan of 10-15 years so £4000/15=£267 per year replacement costs. The lost interest on £4,000 is about 3%. £120 per year. So your final savings will be £363 per year. So £4,000/£363 means you'll be in profit after 11 years.

Cardew

At last some proper economics!!!

In fact it is doubtful if condensing boilers ever do reach the claimed 90% in the real world!

Greenow

Thanks HappyMJ and Cardew for the responses.

WarmFront didn't give me any specific recommendations with regards to the boiler (the work they decided to do was increasing the loft insulation).

Its pleasing that my methodology for the maths appears to have been right (even if the numbers were wrong). If a boiler has a lifespan of 10-15 years, and the payback on a new boiler is 11 years, then it seems to me not worthwhile at this stage to replace the boiler, so I'll probably take a chance and leave it, especially if the efficiency figures in reality are likely to be less. (I've had no specific recent problems with it)

I cannot find an exact model number on the boiler (I'll have another look tomorrow when there is more light - it is in an outside boiler room). My understanding is that it is at least 25 years old!!!

Greenow

Just to add too - my cost of capital is 4.24% (the current cost of my mortgage) - so that adds about £50 per year onto my interest, and therefore the time to pay back the cost of the boiler is nearer 13 years for me than the 11 years you suggested.

Pincher

Greenow wrote: »

I have this week had a visit from a Warm Front Engineer (I am eligible as I receive Pension Credits).

Greenow wrote: »

So I'm guessing my consumption is between about £2,500 and £3,000 each winter/year.

Does not compute. £2,500 on LPG and you can afford to fork out £4,000 for a new boiler, and Pension Credit?

Greenow wrote: »

My boiler, (I think it is a "Potterton Kingfisher 11") he described as being 25% energy efficient (i.e. 75% of the heat generated was lost up the flue). He said that newer boilers are up to 93% energy efficient, and only lose 7% of the heat generated.

There is a metal plate on the boiler, which gives you input and output power in BTUs. Kingfisher II CF100 Input 31.2kW(106,600BTU), Output 23.4kW(80,000BTU), which is exactly 75% efficient. Soot build up and lack of service can make it less, naturally.

So it's 75% efficient, and LOSES 25% of the heat.
Assuming that is the case, you should wait till the boiler fails, and get Warmfront to pay for it. Look at my posts on upgrading my Kingfisher II CF100 (floor standing). Roughly speaking, I paid £4,000, and got £400 Scrappage.

Don't go for floor standing unless you have a good reason.

Greenow

Pincher wrote: »

Does not compute. £2,500 on LPG and you can afford to fork out £4,000 for a new boiler, and Pension Credit?

I am a foster carer, and the HMRC "Simplified Method" of calculating allowable expenses leaves me with zero taxable income. http://www.hmrc.gov.uk/individuals/foster-carers.htm
I alos have a flexible mortgage and can draw equity from my house when the need arises.

Pincher wrote: »

There is a metal plate on the boiler, which gives you input and output power in BTUs. Kingfisher II CF100 Input 31.2kW(106,600BTU), Output 23.4kW(80,000BTU), which is exactly 75% efficient. Soot build up and lack of service can make it less, naturally.

So it's 75% efficient, and LOSES 25% of the heat.
Assuming that is the case, you should wait till the boiler fails, and get Warmfront to pay for it. Look at my posts on upgrading my Kingfisher II CF100 (floor standing). Roughly speaking, I paid £4,000, and got £400 Scrappage.

Don't go for floor standing unless you have a good reason.

Thanks - I'll have a look for that.

Glenp

Hi All.

We purchased a new Glowworm boiler last year and the chap from GW told us that we would be able to save upto £240 a year.

I haven't been able to work it out exactly yet, but our gas bills have definitely gone down.

Yes we had to stump up cash to replace our old clapped out model, but I must say I'm relieved to know that this one won't break down in the middle of winter!! I guess no appliances (fridge freezers, TVs etc ) are designed to last forever, but as long as we get a reasonable run from this boiler I'll be happy.

Glen.

ziggyman99

It always amazes me how boilers and solar panels have to have a pay back time but never for that new kitchen, car, carpet, sofa, etc.

Pincher

ziggyman99 wrote: »

It always amazes me how boilers and solar panels have to have a pay back time but never for that new kitchen, car, carpet, sofa, etc.

Have you ever tried to get a sofa to pay you back?

Ben84

ziggyman99 wrote: »

It always amazes me how boilers and solar panels have to have a pay back time but never for that new kitchen, car, carpet, sofa, etc.

Well, if you buy a new boiler to improve the heating of the house then maybe payback isn't an issue. However, if your boiler heats the house perfectly well but isn't as efficient as a new one, then the only reason to be changing it is to save fuel, so payback becomes the main deciding factor.

As for this boiler, 75% is a decent rating really. With the new technology available I wouldn't buy a 75% efficient gas boiler today, but if I had an existing one that worked and was heating the house well I'd be happy enough with it for now. You can still do work with insulation to save gas and install some thermostatic radiator valves too.