LPG Heating Costs vs the Alternatives: 2026 Running-Cost Comparison

Quick answer: bulk LPG typically delivers heat at around 10–12p per kWh at mid-2026 prices — making it the most expensive fossil fuel to heat with. A well-installed air source heat pump comes in around 7.5p per kWh at the July–September 2026 electricity cap (26.11p/kWh, Ofgem), and LPG-heated homes qualify for the £9,000 Boiler Upgrade Scheme uplift from 21 July 2026. If you heat with LPG, you have more to gain from switching than almost anyone else.

What LPG heating actually costs in 2026

Bulk LPG contracts vary widely, but most domestic customers pay somewhere around 60–75p per litre once you account for tank rental and standing charges (prices are contract-specific — check your own statement). At 6.6 kWh per litre and a 90% efficient boiler, that is roughly 10–12p per kWh of delivered heat. Cylinder users fare worse still: 47kg bottles often work out at 14–18p per kWh, the most expensive gas heating there is. Two structural problems compound the price: you are locked to a single supplier while their tank sits in your garden, and prices move with international propane markets rather than the domestic price cap — LPG is not covered by Ofgem’s cap.

Annual cost comparison: a typical off-grid 3–4 bed home

Assuming 15,000 kWh of useful heat per year (space heating plus hot water):

Figures on this page are estimates based on the July–September 2026 Ofgem price cap (electricity 26.11p/kWh) and typical fuel prices in early July 2026. Your costs will vary with your tariff, home and usage — estimates, not guarantees.

On those numbers a heat pump could save an LPG household roughly £500–£700 a year in running costs — a materially stronger case than for oil homes, where savings against cheap kerosene can be slim. Real-world performance matters enormously though: a badly designed system running at SCOP 2.5 erodes most of the gap, which is why a proper heat-loss survey beats a brochure promise. See what UK homeowners actually pay to run heat pumps.

The £9,000 grant makes the switch cheaper than a new LPG boiler for some homes

Between 21 July 2026 and 31 March 2027, homes currently heated by LPG (bulk or cylinder central heating) qualify for £9,000 — rather than the standard £7,500 — towards an air-to-water or ground source heat pump under the Boiler Upgrade Scheme (GOV.UK, updated 9 June 2026). A typical £10,500–£12,500 installed quote becomes £1,500–£3,500 net — within touching distance of a like-for-like LPG boiler swap at £2,000–£4,000, before you count the annual running-cost gap. The full mechanics, eligibility list and timing rules are in our complete £9,000 uplift guide.

Things LPG households should check before switching

• Tank contract exit terms — most suppliers must remove their tank when you end the contract, but notice periods and removal fees vary; check yours before booking an installation date
• Electricity supply headroom — heat pumps draw 3–5kW; rural single-phase supplies almost always cope, but your installer should confirm
• Radiator sizing — LPG boilers run hotter than heat pumps; some homes need a few radiators upsized, typically £150–£300 each fitted
• Insulation first — if your EPC flags loft or cavity wall gaps, cheap insulation improves any option you choose; see the insulation cost guide

Why LPG sits outside the price cap — and what that means

Ofgem’s price cap covers mains gas and electricity only. Bulk LPG is a private contract for a delivered fuel, so there is no regulator smoothing the peaks: when international propane prices spike, your next fill-up simply costs more, and winter deliveries land at exactly the wrong moment. Contracts also commonly include tank rental, minimum annual purchase clauses and auto-renewal terms. Under Competition and Markets Authority rules you are entitled to switch bulk LPG supplier — typically after your initial contract period, with the new supplier handling the tank transfer or replacement — and quotes between suppliers for the same tank can differ by several pence per litre. If you plan to stay on LPG even two more winters, running that comparison is the single quickest saving available.

Frequently asked questions

My LPG boiler is a modern condensing combi — do I still qualify for the £9,000?

Yes. The uplift is defined by the fuel, not the boiler’s age or efficiency: any home currently heated by LPG (or oil) qualifies for the higher rate in the application window. Whether switching makes financial sense for you still depends on your contract price and how well the heat pump is designed.

What happens to the tank if I switch?

A rented tank belongs to your supplier — give notice per your contract and they arrange collection (check for removal fees). If you own the tank, decommissioning and removal typically costs a few hundred pounds, and buried tanks cost more than above-ground ones.

If you are staying on LPG for now

Shop your bulk contract at renewal (switching LPG supplier is legally protected and can cut several pence per litre), keep the boiler serviced annually, and heat to a schedule rather than on-demand blasts. But run the switch numbers at least once: the uplift window closes on 31 March 2027, and there is no announced successor. Estimate your own home with the free savings calculator or read the heat pump guide. Want quotes when our comparison service launches? Register your interest.