Bit nervous about buying house with Oil heating and an immersion heater

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  • lohr500lohr500 Forumite
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    Our house is on oil heating and we have lived here now for 30 years.
    We replaced the old boiler last year with a high efficiency new oil boiler.
    The oil boiler dated back to the mid 80's and had a claimed efficiency of 70%. The new one has a claimed efficiency of 94.5%.

    To try and help you with the relative costs of oil water heating vs electric, here is my attempt :

    I litre of kerosene heating oil yields 10.35kWh. And todays oil price in our area is £1.00 a litre including the 5% VAT.

    So with 100% efficiency every kWh costs £0.097. At 70% efficiency that's £0.138 and at 94.5%, £0.102.

    The April standard variable tariff for electricity in our area is £0.274 per kWh. The Economy 7 tariff is £0.316 for peak and £0.181 off peak.

    Even if the boiler in the house you are buying is an old inefficient one, running at 70%, it will still be cheaper to heat the water on oil vs electric.

    Per kWh :

    Oil: £0.138
    Economy 7 electricity : £0.181
    Single tariff electricity : £0.274 

    In practice, the difference wont be as great as shown above, because there will be some heat loss from the pipework leading from the boiler to the immersion tank. With an immersion heater you are applying the heat direct to the water inside the tank.

    Also, the boiler will heat the whole tank, but the immersion heater may only heat part of the tank depending on the length/position of the heating element. S it is important to make sure the tank is very well lagged to retain the heat once the water has been heated.

    But at today's oil price it definitely makes sense to use oi for heating the water and not electricity.

    The only exception would be if you can get an electric vehicle off peak electricity tariff like Octopus Go/Go faster  which have a £0.075 off peak rate for 4 or 5 hours.

    We only use oil now for our hot water.

    It is pure speculation, but my view is that oil prices will fall back over the next few months, whilst electricity is going to increase with the October cap. Longer term, who knows and also who knows what assistance the Govt may provide later in the year to help with the cap increase. If assistance is given, then I suspect it won't cover oil usage.

    Depending on your location, a good oil boiler engineer shouldn't charge more than £100 for an annual service, so maintenance costs shouldn't be high.

    I would try to establish the make and age of the boiler though as if it is old, it may need replacing. (The same could be said of a gas boiler in a property as well).
    Check also the age and type of oil tank at the property. Old steel tanks can rust through from the inside (ask me, I know!!) and more modern plastic ones do go brittle with age and can need replacing.

    Hope this helps along with the excellent input from others who have replied.
  • t1redmonkeyt1redmonkey Forumite
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    Really useful replies, I've read through them all and feel a lot more comfortable with moving into a house with oil heating and an immersion heater now and more knowledgeable on how I should use them, thank you!
  • QrizBQrizB Forumite
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    Thank you, the seller of the house is quite elderly so possibly just something she has thought for decades without comparing.  She did say to me that other people had told her to get rid of the immersion heater and just use the oil boiler for heating the water instead, but she thinks it’s cheaper to use the immersion heater for that which is why she still has it.
    It's possible that if the seller lives alone, and if the HW tank is large, that it costs less to heat a fraction of the tank with the immersion than it would to heat the whole tank with electricity. But that's an edge case.
    More generally, even with oil pushing £1/litre (which is exceptionally high by historical standards), heat from an oil boiler will be approx. 1/3rd the cost of standard-rate mains electricity.

    N. Hampshire, he/him. Octopus Go elec & Tracker gas / Voda BB / Virgin mobi. Ripple WT2 member.
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  • lohr500lohr500 Forumite
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    @QrizB Probably closer to 1/2 of the cost of standard rate mains electricity based on my calculation and assuming the house has an old, non condensing, oil boiler.

    But still a no brainer to use the boiler to heat the water so long as the tank is well insulated.
  • Reed_RichardsReed_Richards Forumite
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    lohr500 said:
    ....But still a no brainer to use the boiler to heat the water so long as the tank is well insulated.
    And if it isn't well-insulated?  It's not clear to me how that makes a difference.
    Reed
  • QrizBQrizB Forumite
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    lohr500 said:
    ....But still a no brainer to use the boiler to heat the water so long as the tank is well insulated.
    And if it isn't well-insulated?  It's not clear to me how that makes a difference.
    Imagine you've got a 200-litre tank and the oil boiler heats the full volume but the immersion heater only heats the top 50 litres. Also imagine you're living alone and only use about 50 litres of hot water a day.
    If the tank is poorly insulated (or, taking this to extremes, uninsulated) you'll find yourself heating 200 litres of water from cold(ish) every day. In this case the immersion is likely to be a cheaper option.
    N. Hampshire, he/him. Octopus Go elec & Tracker gas / Voda BB / Virgin mobi. Ripple WT2 member.
    2.72kWp PV facing SSW installed Jan 2012. 11 x 247w panels, 2.5kw inverter. 27MWh generated, long-term average 2.6 Os.
    Ofgem caps explained - October 2021 and April 2022
  • Reed_RichardsReed_Richards Forumite
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    But there are a lot of implicit assumptions there.  You assume that the immersion heater is towards the top of the tank, which is usually true, but not necessarily.  You assume that the thermostat on the immersion heater is set to a similar temperature to the tank thermostat that controls the oil boiler.  You assume that the tank is poorly insulated but not so poorly insulated that it requires a top-up with day rate electricity.  You assume that the water manages to remain stratified even when the water close to the walls of the tank is cooling quite rapidly.  For me those are too many assumptions to inspire confidence in the conclusion.       
    Reed
  • QrizBQrizB Forumite
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    But there are a lot of implicit assumptions there.
    I agree entirely. But you asked "And if it isn't well-insulated?" and I gave an example where itcould be relevant.

    N. Hampshire, he/him. Octopus Go elec & Tracker gas / Voda BB / Virgin mobi. Ripple WT2 member.
    2.72kWp PV facing SSW installed Jan 2012. 11 x 247w panels, 2.5kw inverter. 27MWh generated, long-term average 2.6 Os.
    Ofgem caps explained - October 2021 and April 2022
  • Reed_RichardsReed_Richards Forumite
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    Fair point, @QrizB .
    Reed
  • t1redmonkeyt1redmonkey Forumite
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    QrizB said:
    Thank you, the seller of the house is quite elderly so possibly just something she has thought for decades without comparing.  She did say to me that other people had told her to get rid of the immersion heater and just use the oil boiler for heating the water instead, but she thinks it’s cheaper to use the immersion heater for that which is why she still has it.
    It's possible that if the seller lives alone, and if the HW tank is large, that it costs less to heat a fraction of the tank with the immersion than it would to heat the whole tank with electricity. But that's an edge case.
    More generally, even with oil pushing £1/litre (which is exceptionally high by historical standards), heat from an oil boiler will be approx. 1/3rd the cost of standard-rate mains electricity.

    The seller does live alone, and she said to me she usually just turns it on for 30 mins in the morning and uses that water for a shower and to do the dishes so you could be right 🙂
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