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Electric or Gas?

Running Costs of Heating Your Home

Key Factors
In general the running costs of heating a dwelling and stored hot water depend on several factors:
* Cost of fuel
* Efficiency of heating equipment
* Responsiveness of the controls
* Insulation thickness of water heating and storage vessels
* Occupier management of heating and comprehension of controls.

To illustrate the interaction of these factors, compare two heating systems for the same new 2 bedroom terraced house:

Example 1 – Gas Central Heating Installed
Typical annual running costs:
Energy Cost=£49.73, Stdng Charge=£36.46, Operational¹=£8.76, Total excl.Maint.=£94.95, Maint.²=£77.00, Total=£171.95
2 bed terrace
Example shown above is for a 2 bedroom 79m2 mid-terraced house, complying with elemental method of calculation, as defined by Building Regulations Part L1, with maximum permitted U-Values and a boiler with a 78% seasonal efficiency. An appropriate gas boiler with fan assisted flue, heating radiators and a hot water cylinder has been assumed.

¹ Operational Costs: Central heating pump: 131kWh/year at peak rate: £6.56. Boiler fan: 44kWh per year at peak rate: £2.20

² Maintenance: Based on British Gas Annual Safety and Performance Inspection (£59.00) and Safety Certificate (£18.00)

Example 2 – Electric Heating Installed
Typical annual running costs:
Off Peak Energy Cost=£97.07, Peak rate Energy Cost=£11.78, Stdng Charge†=£19.05, Total excl.Maint.=£127.90, Maint.=£0.00, Total=£127.90
2 bed terrace
Example shown above is for a 2 bedroom 79m2 mid-terraced house, complying with target U-Value method of calculation, as defined by Building Regulations Part L1. A mixed system of storage and direct acting heaters with a 210 litre Maxistore hot water system has been assumed.
†Difference between Economy 7 and general domestic tariff annual standing charge. The general domestic standing charge is common for both gas and electric systems.

The examples above clearly illustrate that although the fuel cost for an electric heating system is higher, significant savings are made in the cost of annual maintenance.

True running costs
When comparing running costs, total ownership costs must be considered, including costs of regular maintenance, safety checks and service life. (See ‘Maintenance’ article in this section for further information relating to these additional hidden costs.)

Reducing running costs
Considering the examples above, running costs could be reduced by:

* Increasing the efficiency of the heating equipment.
* Improving the level of the fabric insulation to reduce the heat load.
* Increasing the insulation level to the hot water cylinder.
* Reducing air infiltration rates.

For example, to reduce running costs of an electric heating system:

* Use a lower cost off peak tariff, using a balanced mix of storage heaters and supplementary panel heaters to optimise comfort and flexibility.
* Install fan assisted storage heaters in order to optimise comfort levels and running cost.

Further improvements could be made by improving the fabric insulation or reducing the air infiltration.
(See also article on Innovation and Building type v heating type under heading ‘Building Design Issues’)

Comparing the dwellings in the examples used, it should be noted that: Electricity from the national grid costs (low tariff) about twice as much as gas per kWh – but:

* Not all of the energy from a gas boiler is converted directly into heat
* The house with electric heating equipment requires a lower heat load because the same house with electric heating must have better insulation levels to pass Building Regulations (target u-value method) than if it had gas central heating.

Electric or Gas?