Faced with rising energy prices, more and more people in Luxembourg are thinking about changing their heating system. Electricity, gas, oil, wood... Here's a price comparison to find out which method is the cheapest.
Contents:
What criteria define an economical heating system in Luxembourg?
Here are the different factors you need to analyse to find the cheapest heating method:
- Purchase price and installation cost : There are big differences between the different types of boiler. You also need to take into account any Luxembourg government grants in the calculation.
- The price of the energy used : Electricity, gas, heating oil and wood tariffs evolve differently in Luxembourg. In 2026, wood remains the cheapest energy sourcefollowed closely by the electricity used by heat pumps (thanks to their excellent efficiency). However, installing a chimney can be very expensive (not least because of the lining and structural work required).
- System performance The more efficient a system is, the less energy it consumes for the same amount of heat produced. Gas or oil-fired boilers generally have an efficiency of 1 (1 kWh delivered for 1 kWh consumed). The heat pumps have a yield greater than 3.
It is also important to consider the insulation of your home. A heating system, no matter how efficient, will always be less economical in a poorly insulated house. Also, some very economical heating systems can't heat very hot, so they're not well suited to houses with a poor energy rating (E, F, G, H...).
In Luxembourg, combined support for insulation and heatinge can make a comprehensive energy renovation project particularly attractive.
Heat pumps: the most cost-effective solution in Luxembourg
The heat pump is still the most economical heating solution in Luxembourg over the long term.
Here's why:
- It produces 3 to 4 kWh of heat for 1 kWh consumed (excellent performance)
- It can easily replace existing gas or oil-fired boilers
- It is heavily subsidised by the government (see the bonuses 2026).
On the other hand, this method of heating has a number of disadvantages:
- It runs on electricity, and Electricity prices rising steadily in Luxembourg
- Regulations on the installation of heat pumps are fairly strict in Luxembourg: in particular, they govern the noise levels emitted by these devices (with measurements required at the property boundary).
- You need a well-insulated house for the system to be truly cost-effective (these devices have difficulty delivering high heating power).
Heating with wood, the cheapest fuel
Heating with wood made a comeback in the 2020s, following the sharp rise in energy prices (electricity, gas, fuel oil). Wood has emerged as a cost-effective alternative, particularly relevant in areas with large forests nearby.
There are several ways to heat your home with wood:
- With a biomass-fired boiler : This is a conventional boiler, but instead of burning gas or oil, you burn logs, pellets or wood chips. The combustion heats the water in the heating circuit. This is an economical solution for homes that can store logs or pellets (and buy them when they are cheaper).
- With wood heating : In the same way, you can install a chimney or a chimney breast. stove You can use the wood-burning stove (cast iron, steel or soapstone) to heat your home. Place it in a strategic location and, ideally, install a motor and ducts to distribute the heat throughout your home. This type of heating is highly efficient and appreciated for its gentle warmth.
The benefits of heating
- Fuel is particularly affordable: 0.05/kWh for pellets or logs. That's half as much as gas or fuel oil.
- The warmth generated is very pleasant and gives a feeling of comfort: especially when you can see the flame or combustion
- The heating control options are the same as for modern boilers: You can control your pellet boiler or stove remotely, using your smartphone.
- For pellet boilers and stoves : Recent models have augers, so they can be reloaded automatically.
However, there are a few drawbacks:
- For biomass boilers : you need a pellet silo to store the fuel, or regular loading/unloading of logs for wood-fired models
- For fireplaces or stoves : you need to build a flue, or have an existing flue lined. This can be relatively expensive (between €6,000 and €12,000). You'll also need to arrange for the flues to be swept regularly.
The gas boiler, a reasonable purchase price
Despite the energy transition, gas boilers are still a viable option in the Grand Duchy. Particularly if you can opt for a condensation model (the best compromise).
These are gas boilers that recover heat from exhaust fumes. This enables them to achieve an efficiency of 110% (compared with 70-85% for conventional boilers).
Benefits include:
- Attractive purchase price (€4,000 to €8,000)
- The higher efficiency makes it an attractive purchase, especially if you already have a gas boiler and all the connections already installed.
- You don't need space
The disadvantages include
- The price of gas is rising steadily (driven by the continuing general increase in energy prices - excluding wood and biomass)
- You spend from the gas distribution network (not all houses are connected)
- Gas boilers are not eligible for the Klimabonus or Enoprimes renovation grants.
Electric heating: perfect for small areas
Electric heating has long had a bad reputation because of its high consumption (and high price per kWh). However, recent models offer attractive performance levels, particularly for small, well-insulated areas.
These are inertia radiators: radiators that store heat in a heating core (made of cast iron, refractory stone or heat transfer fluid) and release it gradually. This system not only saves electricity, but also provides a level of comfort comparable to the heat emitted by central heating (and water radiators).
The benefits:
- These radiators are expensive to buy
- They are self-contained and can be placed anywhere (as long as you can connect them to a power supply).
- Recent models are connected: you can control them remotely and according to various parameters (temperature, humidity, etc).
Disadvantages:
- Your bill will depend heavily on the price of electricity
- The efficiency of these radiators is generally 1 kWh produced for 1 kWh consumed (the efficiency is therefore lower than that of heat pumps or condensing boilers).
Thermal solar panels, an ecological complement
Thermal solar panels are similar to photovoltaic panels, but instead of producing electricity, they capture the sun's energy to heat the water that supplies your heating circuit and/or domestic hot water.
Such a system can cover around 30% of heating needs and up to 60% of hot water needs. So it's very practical and environmentally friendly, but it can only be used as a back-up, not as the main source of heating.
Here are the advantages of the solar thermal panel:
- Energy is 100% renewable and almost free
- The equipment has a very long lifespan (over 25 years)
- A large proportion of hot water consumption is covered
However, the disadvantages are as follows:
- The purchase and installation price is relatively high (€12,000 to €16,000 or more for a house).
- You need to clean your roof and the panels regularly to ensure that nothing reduces the system's efficiency.
- The panels will not be profitable if your system is not well exposed to the sun (shadows on your roof, poor tilt or orientation).
- For heating, this system should be combined with a main boiler (heat pump, biomass boiler or gas/oil boiler).
However, solar thermal panels are eligible for very attractive government grants.
In brief: comparative costs in Luxembourg
Here is a summary table of the different heating systems and their costs (installation and use) in Luxembourg in 2026:
| Heating system | Installation costs | Annual cost (100 m² house) | Performance |
|---|---|---|---|
| Air-water heat pump | 12 000 - 22 000 € | ~800 € | 300 - 400% |
| Biomass boiler | 14 000 - 24 000 € | ~1 600 € | 85 - 95% |
| Pellet stove | 3 000 - 8 000 € | ~1 300 € | 80 - 85% |
| Condensing gas boiler | 5 000 - 9 000 € | ~2 100 € | 95 - 110% |
| Inertia radiators | 3 000 - 5 000 € | ~1 750 € | ~98% |
| Combined solar system | 15 000 - 20 000 € | Variable | Variable |
Conclusion: which heating system should you choose in Luxembourg?
We have seen that the heat pump is undoubtedly the most cost-effective form of heating in Luxembourg (high efficiency, high levels of financial support).
However, the most economical heating system will depend on your project and the type of home you live in:
- For a new house Air-to-water heat pumps, possibly combined with solar thermal panels, are the most cost-effective solution.
- For a renovation If your home already has a central heating system, replacing an old boiler with a heat pump or biomass boiler will be the most economical option. If the gas network is available, a condensing boiler could be an intermediate solution.
- For a flat Inertia radiators, ideally connected, offer the best compromise between investment and savings for small areas. An air-to-air heat pump may also be an option if installation is possible (ask your condominium manager).
Whatever your situation, remember that a new heating system is not enough to reduce your energy bills: you must first eliminate all sources of heat loss. Consult our guide to thermal insulation in Luxembourg to find out how.