How much does it cost to convert an oil-heated home to a heat pump?

Against that, the Boiler Upgrade Scheme pays £9,000 towards an air-to-water or ground source heat pump in eligible off-gas grid properties heated by oil or LPG⁴. That is a £1,500 uplift on the standard grant, aimed at households and small businesses reliant on heating oil⁵. One analysis of the scheme puts the balance a consumer must fund at around £5,500⁶.

So the answer is not a single number. It is a range set by the property, the heat pump type, the installer's quote and the grant, and the grant is the part of the equation a household can pin down most exactly.

Who the conversion cost applies to

The £17,000 figure applies to homes on oil heating, which in practice means homes off the mains gas grid. Oil boilers are the main heating method for 5% of homes, according to the government's public attitudes tracker for winter 2025⁹. That national share understates the concentration: in Northern Ireland, more than two thirds of homes use oil boilers as their main source of heating¹⁰.

Oil heating suits a particular kind of property. Independent guidance describes oil boilers as better for lower installation costs, homes with more than one bedroom and over ten radiators, and cheaper monthly running costs than electricity¹¹. They typically use kerosene delivered to the home¹², stored in a tank that needs refilling every few months¹³. That delivery dependence is the thing a heat pump removes, replacing a tanker with a grid connection.

The grant side of the equation is narrower than the cost side. The Boiler Upgrade Scheme operates in England and Wales¹⁴, and the £9,000 off-grid rate is for properties heated by oil or LPG⁴. The standard rate is up to £7,500 for a ground source or air source heat pump replacing fossil fuel heating¹⁵. Households in Scotland and Northern Ireland are outside the scheme, so the £9,000 does not apply there, and the conversion cost falls more heavily on those households.

What drives the figure up or down

The gap between the £17,000 consultation estimate and the £11,290 to £14,300 range estimated for replacing gas and oil heated homes' heating systems¹⁶ comes from what each figure counts. The consultation estimate covers the transition of an oil heated home, which can include the wider work an off-grid property needs. The lower range covers the heating system replacement itself.

Independent cost guidance for air-to-water heat pumps puts installation at around £11,000, with the Boiler Upgrade Scheme providing a grant of £7,500 at the standard rate¹⁷. For a medium property, one estimate gives £11,745 before grant and £4,245 after £7,500 from the scheme¹⁸. An average heat pump is around £11,600, which official legislation notes is currently four times more expensive than a gas boiler¹⁹.

The comparison that matters most for an oil household is not against gas, which it does not have, but against a new oil boiler. Installing a new oil boiler typically costs between £1,620 and £5,500 including the boiler unit and labour⁸, with oil boilers generally at £3,300 to £4,000²⁰. That is the counterfactual: the conversion cost is the heat pump figure minus the grant, set against the cost of keeping oil.

Conditions and exceptions

The grant has conditions. If a property already has a heat pump, the grant cannot be used to replace it, and the property must not have had a grant or other public funding for a heat pump or biomass boiler, including through the ECO scheme²¹. Those exclusions decide whether the £9,000 is available at all.

There is also a route that keeps oil hardware in place. Hydrotreated vegetable oil works in existing oil heating systems following a simple £500 conversion²², which is a different proposition from a full heat pump conversion and does not attract the Boiler Upgrade Scheme grant. For rural properties where peak heat demand cannot be met by a heat pump without upgrading the electricity supply at disproportionate cost, biomass boilers are treated as an exception case²³.

The running cost picture is not settled. At an oil price of £0.97 per litre, one maker's guidance describes modern oil boiler and heat pump running costs as comparable for an example home with 12,000 kWh annual heat demand, but notes they would quickly move apart if domestic oil prices went up again⁸. Oil boilers use between 1 and 2.5 litres of oil for every hour the heating is on⁸, so the exposure to price is direct.

How the conversion is done

The conversion replaces a combustion boiler and its fuel store with a heat pump and, usually, a hot water cylinder. The oil tank and its pipework come out; the heat pump and cylinder go in. For the tank side of the old system, installation labour to pipe a tank into a heating system and test the connections runs at around £400 to £800²⁴, which gives a sense of the plumbing scale involved, though removal rather than installation is the relevant task here.

The choice of heat pump type follows the property. Air-to-water and ground source units both qualify for the £9,000 off-grid grant⁴. Air-to-air heat pumps attract a lower £2,500 grant once available under MCS²⁵. Ground source systems need land for a loop or borehole, which many rural oil heated properties have, and the standard grant for a ground source heat pump replacing gas or oil heating is up to £6,000²⁶.

The scheme's scale gives context for how many conversions are expected. The Boiler Upgrade Scheme's £450m funding was expected to help install 90,000 heat pumps over three years²⁷. The £1,500 uplift for oil users is intended to make the transition more affordable for that group⁵.

What it means for energy independence

A heat pump conversion moves a household off delivered fuel and onto the electricity grid. That ends the tanker dependency, the tank refilling every few months¹³ and the exposure to oil price movements that the running cost comparison turns on⁸. It does not end dependence: the household still relies on a supplier and the grid, and on the manufacturer for parts and support.

The remaining dependence is different in kind rather than absent. Oil is bought in bulk and stored on site, which gives a household a buffer but ties it to a delivery chain and a volatile price. Electricity is bought continuously, which removes the storage requirement but ties the household to the grid and to whatever tariff it is on. Neither is self-sufficiency.

For an oil heated home, the conversion cost is the price of that switch. The consultation estimate of £17,000¹, the £9,000 grant for eligible off-gas grid properties⁴ and the around £5,500 balance⁶ together describe the transaction. The conditions, the territorial split between England and Wales on one side and Scotland and Northern Ireland on the other¹⁴, and the grant deadline of 31 March 2027⁷ decide whether a given household can use it.