Off-Grid Heating in Cornwall: Oil vs. Heat Pump — 10-Year Total Cost Analysis

Cornwall's Off-Grid Reality: The Structural Problem in Numbers

The debate about switching from gas to a heat pump, for most UK homeowners, starts from a mains-connected baseline: replace the gas boiler, retain the radiator circuit, claim the £7,500 Boiler Upgrade Scheme grant. For Cornwall, the premise is entirely different — and demands a fundamentally different financial analysis.

51% of all homes in Cornwall are completely off the mains gas grid, more than double the England-wide average. Of those, roughly 20% rely on delivered heating oil (kerosene) or Liquefied Petroleum Gas as their primary heating fuel. A further 32% use direct electric heating, operating in a region where grid electricity carries the highest unit rate in England at 27.58p/kWh (Q2 2025 Ofgem cap). Fourteen percent of all Cornish households are formally classified as fuel poor — a figure that more than doubles the national average.

The housing stock compounds the problem. Thirty-one percent of Cornish homes were built before 1930, frequently using solid stone masonry that resists simple cavity-fill insulation methods. Approximately 43,500 properties (16% of the county's stock) retain at least partial single glazing. A 1970s Cornish detached farmhouse — the archetype this analysis models — combines a high-heat-loss building envelope with full commodity market exposure. Its detached form factor means heat escapes simultaneously from all four exterior elevations, and its maritime location means Atlantic wind speeds strip heat from saturated masonry, largely cancelling the mild-temperature advantage Cornwall theoretically enjoys over northern England.

What Kerosene Actually Costs: A Six-Year Verified Price Record

Sound 10-year financial modelling cannot begin from today's price and assume it holds. The kerosene market between 2020 and 2026 has demonstrated a volatility range that makes any single-year snapshot dangerous as a planning baseline. The following data is verified for the South West region:

At the Q1 2026 price of approximately 59p/litre, kerosene delivers heat at 5.70p/kWh — marginally cheaper than the projected Q2 2026 mains gas cap of 5.74p/kWh. This near-parity is historically anomalous. More importantly, it is structurally fragile: the 2022 crisis demonstrated that kerosene can surge from 65p to £1.37/litre in under eight weeks. At that peak price, the typical Cornish farmhouse fuel bill would have reached £4,233 in a single year — more than double today's cost — and oil households received no equivalent of the Ofgem cap protection extended to gas-grid consumers.

LPG: The More Expensive Off-Grid Alternative

For the minority of Cornish homes on bulk LPG rather than kerosene, the economics are structurally worse at every price point. Bulk LPG averaged 88p/litre across 2025 (historical range: 65p low in early 2021 to 108p peak in September 2024). LPG's lower volumetric energy density — 7.08 kWh/litre versus kerosene's 10.35 kWh/litre — produces a significantly higher per-kWh cost:

LPG households face a permanent 110% premium over mains gas on a raw energy basis. The case for ASHP transition is considerably stronger for LPG properties than for kerosene properties — they are escaping a structurally more expensive baseline, so the running cost crossover occurs faster.

Annual Consumption: The 1970s Cornish Detached at Three Demand Levels

A national average kerosene-heated home consumes approximately 26,000–27,000 kWh of thermal energy annually. Adjusting for the 1970s Cornish detached archetype — 120–150m², unfilled or poorly insulated cavity walls, partial or failing double glazing, exposed Atlantic-facing elevations — requires applying a 15–20% thermal penalty against the national baseline. Three occupancy profiles emerge:

The True Cost of Oil: Maintenance, Logistics, and the Tank

The fuel bill alone understates the total annual cost of oil heating in three structural ways.

First, the mandatory annual OFTEC service. An oil boiler service in the South West costs an average of £110 (verified range: £75–£127), compared to £85–£120 for gas. The premium reflects the OFTEC registration requirement (far less common than Gas Safe), extended rural travel times between isolated properties, and the labour-intensive nature of oil burner maintenance: nozzle replacement, heat exchanger de-sooting, fuel line inspection, and flexible hose replacement. An unmaintained boiler pays for its neglect with compounding efficiency losses — a 5% efficiency drop forces burning of approximately 154 extra litres of kerosene annually. At 59p/litre, that wasted fuel costs £90.86 — effectively the entire cost of the service that would have prevented it.

Second, delivery logistics. Properties with poor road access face premium per-litre charges. Rural Cornish minimum order requirements can force purchasing during winter peak-price periods rather than cheaper summer off-season windows (when prices typically fall to 46–50p/litre).

Third, the oil tank itself. Single-skin steel tanks typically require replacement after 20–25 years with a bunded plastic unit costing £800–£1,500 — a capital expense that appears unpredictably and cannot be avoided.

ASHP Running Costs: The Cornwall Arithmetic

An ASHP retrofit into a 1970s Cornish property requires accompanying insulation work to achieve the low flow temperatures (35–45°C) at which a heat pump operates efficiently. Without loft insulation, draught-proofing, and glazing upgrades, the ASHP runs at higher flow temperatures to compensate for the building's heat loss — compressing its seasonal efficiency and inflating running costs. Modelling a realistic post-retrofit scenario with moderate insulation improvements reducing annual heat demand from 32,000 kWh to approximately 20,000 kWh, and using the field-proven SPF of 2.80:

The 10-Year Comparison: What the Numbers Actually Show

With running costs established for both paths and verified kerosene data available, a rigorous 10-year total cost of ownership comparison is now possible. The oil path uses a moderate escalation assumption — escalating from 59p/litre today toward a 67p/litre average over the decade, well below the 2019–2026 historical average of 72p/litre (itself heavily influenced by the 2022 crisis):

At moderate oil price escalation, the 10-year totals are approximately equal — the oil path's zero upfront capital is offset by accumulating fuel costs. This near-parity is the honest baseline. What it does not capture is the asymmetric risk of oil price volatility. A single crisis year equivalent to March 2022 (£1.37/litre) would add approximately £2,300 to the oil total in a single year, while the ASHP path's running costs would be entirely unaffected. One such event shifts the 10-year oil total to ~£24,600 — a £2,800 penalty against the ASHP path that no amount of today's stable pricing can insure against. Oil households cannot opt into the Ofgem price cap mechanism that shielded gas households from the 2022 crisis.

Grants Available for Cornwall's Off-Grid Households

Several overlapping grant and loan mechanisms specifically target Cornwall's unique off-grid profile:

• Boiler Upgrade Scheme (BUS): £7,500 toward ASHP or GSHP installation. No outstanding EPC insulation recommendations required (rule change March 2024). MCS-certified installer applies directly on the homeowner's behalf.
• Warm Homes Local Grant: For households with income below £36,000 and EPC rating D–G, Cornwall Council can fund fully subsidised ASHPs, solar PV, glazing, and insulation. Waiting lists are active — early registration is essential.
• Home Upgrade Grant 2 (HUG2): Central government funding explicitly targeting low-income households off the gas grid with poor EPC ratings. Given that over 51% of Cornwall is off-grid, HUG2 is among the most applicable grants in the county.
• ECO4: Energy Company Obligation funding for fuel-poor households — insulation, heating upgrades, and solar measures are all covered for eligible residents.
• Lendology Green Home Improvement Loan: Cornwall Council-backed low-interest loans from the UK Shared Prosperity Fund, specifically for fuel-poor households, those with poor credit histories, park home owners, and families with children under 16.

The 10-Year Verdict

At Q1 2026 kerosene prices — which are historically low and near mains gas parity at 5.70p/kWh — the 10-year financial case for ASHP plus solar versus continued oil is approximately break-even under moderate price escalation assumptions. This is the honest baseline. The decision rests on three asymmetries that the simple cost comparison does not capture:

• Tail-risk exposure: A single year at 2022 crisis prices adds £2,300+ to the oil total and permanently tips the decade-scale calculation. Oil households have no regulatory protection equivalent to the Ofgem cap.
• Grant time-sensitivity: The BUS £7,500 grant and 0% VAT on solar and batteries are both time-limited. Neither is guaranteed beyond current legislative windows. The capital benefit of acting now is not recoverable later.
• Carbon compliance trajectory: The government's off-grid fossil fuel boiler phase-out deadline is currently set at 2035. Properties remaining on oil by that date face mandatory replacement without any grant guarantee at that point.

For Cornwall's 51% off-grid housing stock, the ASHP-plus-solar path is not a dramatically cheaper option at today's kerosene prices — it is a price-risk hedge, a grant-capture opportunity, and a carbon-compliance position that becomes more compelling each year oil prices drift upward from their current anomalously stable baseline.