We faced a similar question, (geothermal) heat pump or pellet heating system, and decided on the pellet heating system (Easyfire from KWB).
Our house is from 1983, living area 265m2 plus 130m2 heated basement. Heating oil consumption before renovation to KFW 100EE around 3500-4000L per year, which I already found not bad for the age and size. The oil heating system is from 2015.
Ultimately, the decisive factor was the price. The geothermal heat pump including 4 drillings would have cost 65,000EUR before 50% subsidy (replacement of oil heating in the individual renovation roadmap). The pellet system (including hot water circulation, which the heating installer is still doing) is at 44,000EUR, with 55% subsidy.
Would a pellet system be an idea? Often you can recycle the room from the old tank.