The electric storage heaters are usually the most energy-efficient heating systems, with 100% energy being used for producing heat rather than being wasted. However, the electricity costs might be on the higher spectrum, which results in higher energy bills.
However, due to their high heat retention and dual terrif optimisation, the running costs can be optimised and managed. We have compiled this guide to help homeowners understand how they can reduce their energy costs using Economy 7 tariffs and more.
How Storage Heaters Actually Work (And Why Most People Get This Wrong)
Storage heaters are sneaky. They charge up at night when electricity is dirt cheap, then release that heat during the day. Simple, right?
Not quite. The magic happens between midnight and 7 am. That’s when ceramic bricks inside your heater soak up energy at rock-bottom rates. Come morning, you’re coasting on last night’s cheap electricity whilst everyone else pays peak prices.
Modern units hit 90% off-peak usage. Your gran’s ancient storage heater? Probably wasting half that heat before breakfast.
The Off-Peak Window: Your Money-Saving Sweet Spot
Economy 7 gives you seven hours of cheap electricity. Economy 10 stretches it to ten hours across three windows. Miss these windows and you’ve just turned an economy heater into an expensive radiator.
Current off-peak rates sit around 20–26p per kWh. Standard rates? You’re looking at 40–60% more. That gap is your entire business case for storage heating.
The Numbers Don’t Lie: Running Cost Breakdown
Want specifics? Here’s what a 2kW storage heater actually costs:
Daily charging cost (7 hours off-peak):
- Energy used: 14 kWh
- Cost at 20p/kWh: £2.80
- Cost at 26p/kWh: £3.64
Compare that to running a convector heater for just seven hours: £3.69 at standard rates. Run it all day and you’ll hit £12.65.
How Storage Heaters Stack Up Against Everything Else
| Heating Type | Daily Cost | Annual Cost (1960s Home) |
| Old storage heater | £2.70 | £985 |
| Modern Quantum heater | £2.04 | £745 |
| Basic electric radiator | £3.83 | £1,399 |
| Gas central heating | £0.76 | £278* |
*Based on 90% efficiency, excluding standing charges. Notice that gas figure? That’s the elephant in the room.
When Storage Heaters Make Sense (And When They’re Stupid)
No mains gas? Storage heaters are your best friend. Have gas available? You’re throwing money away.
The brutal truth: gas central heating costs three to four times less than electric storage heating. Even with Economy 7 shaving 50% off your electricity costs, gas still wins.
Three Scenarios Where Storage Heaters Actually Work
- Scenario 1: Off-Grid Properties Rural cottage with no gas line? Installing gas would cost £5,000+ before you even buy a boiler. Storage heaters make sense.
- Scenario 2: Low Upfront Budget. New storage heater installation runs £200–£400. Gas boiler? Try £2,000–£4,000 plus radiators and pipework.
- Scenario 3: Future-Proofing Without Gas Renewable tariffs are pushing night rates below 10p/kWh. Octopus Snug hits 7p. That’s when storage heating starts competing properly.
When You Should Walk Away
Got mains gas? Use it. Planning to be out all day? Storage heaters charge overnight whether you need heat or not. Living in a poorly insulated home? Fix the insulation first; heating any home badly is expensive.
The Tariff Trap: Why Economy 7 Isn’t Always a Win
Here’s what energy companies won’t tell you: Economy 7 only saves you money if you shift 40% of your total electricity use to off-peak hours.
Just running storage heaters isn’t enough. You need to time your washing machine, dishwasher, and EV charging overnight. Otherwise, the higher daytime rate eats your savings.
Economy 7 Reality Check:
- Off-peak rate: 20–26p/kWh
- Peak rate: 35–40p/kWh
- Standard tariff: 27–30p/kWh
Do the math. If 60% of your usage hits peak hours, you’re losing money.
Smart Tariffs Are Changing the Game
Octopus Snug drops to 7p/kWh overnight. That’s a 75% discount on standard rates. British Gas’s similar offerings hover around 9p/kWh. These tariffs make storage heating genuinely competitive, if you can access them.
Modern vs Old Storage Heaters: The 45% Cost Gap
Your 1980s storage heater is bleeding money. Modern high-heat-retention models with smart controls cut running costs by 45–47% compared to older units.
What’s changed? Insulation technology. Automatic temperature sensors. WiFi control. Older heaters dumped heat all day, regardless of temperature. New ones only release heat when rooms actually need it.
What You’ll Pay for an Upgrade
- Basic replacement: £400–£700 per unit
- Premium smart models: £700–£1,000 per unit
- Installation (replacement): £70–£150
- New installation with wiring: £200–£400
Payback period on a modern unit? Roughly three to five years if you’re replacing an ancient heater.
Heat Pumps: The Real Competition
Let’s address the alternative everyone’s talking about. Heat pumps cost £8,000–£15,000 installed. They’re expensive. They’re complicated. They’re also dramatically cheaper to run.
A heat pump with a coefficient of performance of 3.0 costs roughly £1,289 annually for the same heating that costs £985 from old storage heaters. Factor in a 15–20 year lifespan and the math shifts.
But here’s the catch: heat pumps need proper insulation, suitable radiators, and space for an outdoor unit. Miss any of those and efficiency tanks.
Practical Tips That Actually Cut Costs
Control your input dial: Higher in winter, lower in spring. This isn’t rocket science, but 70% of users get it wrong.
Master your output dial: Low at night when you’re asleep, higher when you’re home. Releasing heat into an empty house is just stupidity.
Insulate first: Cavity wall and loft insulation cut heating requirements by 30–40%. Every pound spent on insulation saves three pounds on heating.
Heat occupied rooms only: Why are you heating the spare bedroom? Use weather forecasts: Smart storage heaters let you dial down charging before mild days. Old heaters charge blindly.
The Environmental Angle (If That’s Your Thing)
Storage heaters produce zero direct emissions. Charge them on a renewable tariff during off-peak hours and you’re running on wind power. Compare that to burning gas in your boiler.
Renewables generate surplus power overnight that would otherwise go to waste. Storage heating soaks up that excess capacity. It’s actually a clever grid solution, though you’re probably more interested in saving money than saving the planet.
The Bottom Line
Storage heaters beat every other electric heating option on cost. They lose to gas. They’re perfect for off-grid homes with Economy 7 or better tariffs. They’re wrong for properties with mains gas unless you’re ideologically opposed to fossil fuels.
Modern units with smart controls are worth the upgrade if you’re stuck with storage heating, and you may even be able to offset the cost through ECO4 Funding if you meet the eligibility criteria. But if you’re choosing a new system from scratch, with gas available? Go gas.
