Before you refill your oil for the upcoming season, it may be time to think about updating your heating system to a more cost-efficient method. Though common, oil systems are one of the most expensive ways to heat a home. Natural gas is cheaper, but there are some hidden costs to switching. When you’re considering oil vs. natural gas, there are a few things to consider before you pick one. We’ll guide you through the cost and long-term savings of converting your heating system to find the best fit for your home.

PECO Price comparison for a 1900 square foot, multi-story home

PECO Price comparison for a 1900 square foot, multi-story home

The benefits of switching from oil to natural gas

When you heat your home with natural gas, there is a constant stream of fuel that comes from an underground pipeline. This lowers operating costs and eliminates the need for fuel deliveries. By switching to natural gas, there are a variety of benefits including:

  • Inexpensive annual utility costs. Oil is more expensive than natural gas, currently at $4.95 per gallon in Pennsylvania, and has been consistently rising in cost. When switching from oil to natural gas, annual heating costs can decrease by 60% or more.
  • It is more energy efficient and environmentally friendly compared to oil.
  • It removes the need to monitor fuel levels and have fuel delivered as there is a constant source from the pipeline.
  • It requires less maintenance than oil heating and does not leave behind residue.

If a home has an oil system that is less than five years old, it can be easily converted to natural gas. Instead of replacing the entire system, only the fuel source needs to be upgraded. This is a less costly way to convert from oil to gas, ranging from $5000 to $7000. If you are thinking about switching to natural gas and have a system in this age range, this is the most cost-efficient option.

Alternate systems to improve cost efficiency

If you have an older heat or cooling source, specific systems can be easily converted into more cost-efficient systems. Learn which one would work best for your home.

Upgrading from an oil furnace to a gas furnace

If your home already has an oil furnace, a gas furnace is the most straightforward conversion for better cost-efficiency. See how oil and gas furnaces compare to each other:

Oil Furnace:
  • Average installation cost: $10,500-$14,500
  • Annual Utility Cost: $5,900-$9,500
  • Average Lifespan: 12-15 Years
Gas Furnace:
  • Average installation cost $5,800-$12,500
  • Annual Utility Cost: $1,670-$2,660
  • Average Lifespan: 12-15 Years

UPGRADING FROM AN OIL FURNACE TO A GAS FURNACE

Upgrading from an oil boiler to gas boiler

If your home has an oil boiler, a gas boiler is a convenient conversion for better cost-efficiency. See how oil and gas furnaces compare to each other:

Oil Boiler:
  • Average installation cost: $12,000-$16,500
  • Annual Utility Cost: $4,290-$5,650
  • Average Lifespan: 15-20 years
Gas Boiler:
  • Average installation cost: $10,800-$26,000
  • Annual Utility Cost: $1,670-$2,660
  • Average Lifespan: 15-20 years

Upgrading from an oil boiler to gas boiler

Upgrading from a gas furnace to electric heat pump

While a gas furnace is more cost efficient than an oil system, if you are looking to upgrade to an even more efficient system, or don’t have access to a gas line, an electric heat pump is another convenient switch. See how gas furnaces and electric heat pumps compare to each other:

Gas Furnace:
  • Average installation cost $5,800-$12,000
  • Annual Utility Cost: $1,670-$2,660
  • Average Lifespan: 12-15 Years
Electric Heat Pump:
  • Fuel Rates:
  • Average installation cost:
    • Standard System: $14,000-$29,000
    • Ductless System: $6,000-$30,000
  • Annual Utility Cost: $1,923-$2,659
  • Average Lifespan: 10-12 years
  • Can be used for both heating and cooling
UPGRADING FROM A GAS FURNACE TO ELECTRIC HEAT PUMP

Upgrading to a geothermal heat pump

While natural gas systems are cheaper than oil, the most cost-efficient, environmentally friendly way to heat a home is using a geothermal heat pump system. Geothermal systems use pipes buried in the ground called “loops” to draw heat into the home. Since the pipes are buried underground, the system requires little to no maintenance. It also does not require oil or gas, and uses minimal electricity to provide stable, even heating throughout the home. In addition, geothermal heat pumps can also be used to cool a home as well, eliminating the need for a separate cooling system.

While there are numerous benefits to geothermal heat pumps, there is a high upfront installation cost. Installing a geothermal system costs more than any other system because it requires the need to drill into the ground around the house to place the loops. However, homeowners often see it pay for itself in 10 years and it can last for over 50 years.

Geothermal System:
  • Average installation cost: $40,000-$70,000
  • Average Lifespan: 50+ years
  • No significant annual increase to electric bill
  • Can be used for both heating and cooling
UPGRADING TO A GEOTHERMAL HEAT PUMP

How to estimate cost-efficiency for your home

If you want a more specific estimate on the cost difference between home heating methods, PECO offers a Heating Comparison calculator for you to compare natural gas, natural gas furnaces, heat pumps, propane, and fuel oil furnaces. Find your estimate here.

For those looking to compare their current oil vs natural gas, you can use PECO’s Gas Heat Conversion Calculator to estimate your cost savings. This tool can help you determine the exact amount you could save if you make the switch.

No matter which method you choose, you need to make sure you do your research and pick the option that makes the most sense for your home. Depending on your existing equipment and estimates from tools like PECO’s, it might be more cost effective to keep your current system. Be sure to weigh the pros and cons before you switch, and consult our HVAC experts so you can live in total comfort.

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