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Impending oil boiler ban will affect many rental properties

An oil boiler ban would prevent all new oil boiler sales to homes in off-the-grid areas - that is homes without access to mains gas - by 2026. It is part of the government's plan to speed up its route to net zero emissions by 2050.

The ban would force households who cannot use mains gas boilers – primarily those in rural areas - to look to alternatives, mainly those in the Government’s energy efficiency proposals, meaning heat pumps.

Ten years early

So according to the Government’s intention, new oil boilers would be banned from off grid homes in 2026, that’s a full 10 years before oil boilers in other locations are to be banned.

Under the Government’s plans, originally set out in 2021, these off grid homes are seen as a viable early target because of their relatively high emissions and use of expensive fuels.

Many of these oil boilers in rural areas tend to be older more inefficient types creating higher emissions than modern boilers. The Government agency also saw this move as a way to boost the lagging uptake of heat pumps.

However, older properties of the type normally fitted with these older systems tend to be the ones least suited to being heated by heat pumps – they are often of solid wall stone or brick construction, lacking any kind of wall insulation.

The search for alternatives

The ban, if it goes through, will affect 6% of all UK households, forcing them to find alternative heating solutions - this means air source or ground source heat pumps heat pumps costing many thousands of pounds more than a replacement boiler. Or alternatively, liquid petroleum gas (LPG) gas, which again will cost more to install and more to run.

Another alternative, should the ban proceed, is that the considerable number of rural households who currently rely on oil for their heating and hot water could modify their existing oil boiler to consume a more eco-friendly heating fuel.

More insulation needed

Heat pumps are more efficient as far as emissions go, but as they use more electricity so they are usually no cheaper to run. What’s more, unless the house is insulated to modern building standards, something that’s difficult to achieve in some older properties, they cannot reach and sustain the required minimum heat levels in winter.

The ban is set to be included in an Energy Security Bill, currently progressing through Parliament.

Around 1.1 million homes in England are not connected to the gas grid and use fuels that produce higher levels of emissions than gas or some other alternatives. Most, around 80 per cent, use heating oil, while approximately 13 per cent use LPG liquid and nine per cent use coal. It means that these predominately rural properties account for around 25 per cent of UK household heating emissions.

Far higher costs

Higher carbon emissions of these heating methods are behind the Government’s rationale for targeting these properties earlier, by introducing a 2026 cut-off date for all new installations in these off-grid homes.

The problem the occupiers have with this is that running alternative fuels means a higher initial cost of system installation, as well as in many cases, higher running costs. Some of these alternative fuels have seen particularly high spikes during the recent energy crisis.

Also, many off-grid properties are situated in conservation areas, which means they may face planning restrictions on the necessary insulation measures when fitting, in particular, air source heat pumps installations.

Government support grants

The Government is backing conversions to ground or air source heat pumps as its preferred alternative for when households switch away from oil, They run on electricity, which is seen as increasingly green as more renewables forms of generating electricity come on-stream.

Rural, off-grid homes have long been the target market for heat pumps, as owners look to switch to a cleaner and cheaper heating system.

A Government scheme currently offers grants of £5,000 for air source heat pumps, and £6,000 for ground source heat pumps, a scheme which is due to end in 2028. But actual costs range from £7,000 to £13,000 for Air Source, and between £14,500 and £45,000 for Ground Source heat pumps, a considerable extra investment over the cost of a new oil boiler.

Problems with heat pumps

Add to all the above the extra measures needed to bring draughty rural properties up to modern insulation standards needed fro heat pumps to heat efficiently, and the specialised maintenance often needed for these systems, so a lot more expense will be borne by owners.

What’s more installing a heat pump system in older properties – retrofitting the systems – is not always straightforward. More space is needed for radiators which need to be twice the capacity and inside storage tank space is needed. The ideal for these systems is underfloor heating but this is not always possible or the costs can be prohibitive.

Because the cost of electricity is high, compared with oil – something the Government plans to change in the future - running a heat pump system is currently more expensive than an existing oil boiler system.

Low grid capacity – particularly in remote areas – is also likely to be an issue. Some rural households already being asked to pay for electricity infrastructure upgrades before they can install generators and heat pumps.

All of these extra costs will be of great concern to country dwellers especially as many do not earn the higher wages of city dwellers, and farms are often struggling to make ends meet, so fuel poverty is higher compared to urban areas.

There is a Government subsidy scheme available for fuel-poor households to install energy efficiency measures, including heat pumps, but there is a £950 million funding shortfall compared to the Government’s original manifesto commitment on this.

Another challenge to the roll out of heat pumps across the nation is the lack of installers, with apparently only around 4,000 currently trained up in the UK, which compares with over 30,000 projected to be needed by 2028.

More concern is the complexity of these relatively new systems when things go wrong. Getting maintenance work done to a good standard, as has been reported can be problematic in some cases, would be exacerbated in rural areas, where engineers may have to travel long distances in emergencies.

Landlords will be reluctant to install heat pump systems in their rental properties for many of these reasons listed above: even when they are able and willing to make the investment needed, do they want to risk the possibility of tenants incessantly complaining about inadequate heating, or delays for repairs if things start to go wrong?

Government facing considerable opposition to an early ban. Plans for oil boiler ban from 2026 have been dubbed “ULEZ” for country households. Consequently the Government is facing significant opposition to its plans.

There is a possibility the plans will be revised before the Bill goes through Parliament and some are predicting the plans will be watered-down before the Energy Bill becomes law.

Replace your oil boiler now before a ban comes in?

One option is to start off with a new efficient oil boiler before a ban comes in. You will only be forced to switch to an alternative heat source if your oil boiler breaks after 2026 – so some property owners will replace an old boiler earlier than planned, to avoid this outcome.

Oil boiler will cost between £1,500 and £5,000 and they tend to last on average between 15 and 30 years. That all depends on the quality of boiler you buy in the first place and whether the supplier is around to supply parts for that length of time. So in theory, a new oil boiler purchased now could last beyond the 2050 net zero target date!

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