LPG (liquid petroleum gas) such as Calor Gas can be used as a way to provide heat and hot water for homes. Read our guide to LPG and try our tips to save money.
LPG is a common and versatile energy source often used when camping and caravanning. However, it's also a method of heating homes and hot water. This is particularly relevant to the millions of UK households unconnected to the mains gas network.
LPG is created as a by-product when crude oil is refined. It can also be extracted from natural gas streams or petroleum.
It's considered a fairly clean fuel to burn compared to other fossil fuels - it emits less carbon than oil, for example - but it still does contribute to air pollution.
Other downsides include the fact it’s one of the most expensive heating options and can be inconvenient.
If you use so-called bulk LPG, you’ll have a tank on your property to store the gas, which may be above or below ground.
This is likely to be cheaper and more convenient than relying on cylinders. Cylinders are typically only used when there are problems arranging delivery of bulk LPG, or space restrictions on storage.
The Office of Fair Trading (OFT) published a report in 2012 detailing its investigation into the off-grid energy market. It highlighted that only 3% of the major suppliers' customers ended their supply arrangements every year. Just 0.5% of major suppliers' customers switched to an alternative LPG supplier. The Competition and Markets Authority noted in 2018 that while there have been improvements since the OFT investigation, switching levels are still low, at around 4%.
Although LPG storage tanks are typically sited on your land, the tank itself is likely to be owned by the supplier.
The LPG supplier will have agreed to your use of the tank in return for an exclusive contract to supply domestic bulk LPG. Such an exclusive contract may be expected to last for two years.
The supplier is required to make sure that the tank is safe to receive and store the LPG.
Cylinder LPG is used for home heating where bulk LPG can't be supplied, for example due to space constraints. It typically involves the use of large 47kg propane cylinders.
The large cylinders require careful handling, and customers usually need to organise delivery and collection themselves. It's also important to understand that the cylinder remains the property of the supplier, and will need to be returned when finished with.
It's considered one of the more expensive ways to heat a home - even more expensive than bulk LPG.
Cylinder LPG users have several challenges when looking for the best price:
In view of these challenges, you should shop around for the best deal, make your energy usage as efficient as possible and check whether there are any government grants available.
A further challenge to switching and/or getting a competitive deal is found on park or holiday home sites (so-called metered estates). The estate owner may have entered their own contract with the LPG supplier for the whole estate.
If you’re in this situation you could get together with other estate residents to ask the estate owner to switch suppliers to get a better deal.
Despite the challenges, there are still ways for you to save on your LPG energy bills.
Here are some top money-saving tips to consider:
If you’re connected to the main gas network, switching to a gas boiler and heating system should be relatively straightforward. Although initially expensive, some modern boilers burn mains gas as well as LPG. This can help cut switching costs.
Mains gas should be cheaper than LPG. It’ll also make shopping around for energy more straightforward. A mains gas boiler could also add value to your property.
If you’re not connected to mains gas, there are other options:
Heating oil is one of the cheaper options, although it's not one of the more environmentally friendly choices.
While it's not necessarily a cheaper option, electrical heating may be more convenient and easier to budget and shop around for. Electric may also be a better long-term option with the rise of time-of-use tariffs, the Smart Export Guarantee (SEG) and smart meters.
Other alternatives include solid-fuel options like coal-fired and biomass boilers.