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The price of heating oil has risen 17% since the beginning of July. Those who installed a ground source heat pump this summer will be saving more money than they expected this winter.

Heat pumps use less energy than most heating systems because they simply move heat from outside (in the ground or water) into your building, rather than using the energy directly for heating (like burning oil).

Oil prices are notoriously volatile, responding to market forces as well as global geopolitical events. The tremendous dive in the crude oil price in 2014-15 was caused largely by a small amount (~2%) of oil oversupply in the market. At other times, tension in oil-producing regions such as the Middle East have driven price hikes. All this means substantial uncertainty for those reliant on heating oil for their central heating.

In contrast, electricity prices are relatively stable. Although they have tended to rise in recent years, there are signs that power is getting cheaper. A recent government auction for fixed-price contracts for two offshore wind farms demonstrated that offshore wind is now cheaper than building new gas generation. Off shore wind joins onshore wind and solar generation in undercutting fossil fuel generation. Furthermore, a report from the Carbon Trust and Imperial College London found that implementing the smart, flexible grid needed for renewables may save the UK £40 billion by 2050.

Heat pumps already save energy and money and, as electricity prices fall in real terms, they make an increasingly good investment.

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