Oil and Gas Furnace Comparison
The several key differences between these two home heating options are described below:
Cleaner Emissions: Oil has a bad reputation for being a dirty fuel option. While conventional motor oil doesn’t burn cleanly, home heating oil is more similar to kerosene, which is an extremely clean-burning type of oil. It gets rather messy inside the furnace (injector nozzles often get clogged, necessitating an interior furnace cleanout), but emissions are much cleaner than gas. Safety: The fuel for gas furnaces must be kept under pressure; if there is a leak in the system, no matter how small, the potential for a disaster is very real. A small spark or flame could ignite the gas, causing a devastating explosion. While fuel oil does burn, there is almost no danger of explosion.
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- Fuel Choice: Oil furnaces only run on oil, whereas gas furnaces can run on either natural gas or propane. The advantage of dual-fuel capability is that you can save money by choosing the less-expensive fuel in your area. Economy: Worldwide reserves of natural gas are much higher than oil, so while oil prices will continue to increase, natural gas prices should stabilize.
- Storage: Most natural gas companies offer free storage tanks and have automated deliveries based on your particular gas usage statistics. Using an oil furnace necessitates purchasing an oil tank and setting up deliveries yourself.
A Word on Installation and Operating Costs
According to the U.S Energy Information Administration, as of November 2012, a gallon of heating oil costs just over $4 per gallon, while a gallon of residential propane costs slightly less than $2.50. Based on these statistics, to fill an average sized 250 gallon oil tank would cost $1,000 compared to only $600 for gas. With the worldwide supply of oil ever-dwindling, oil prices will keep going up. New sources of natural gas and propane, however, are constantly being discovered. Keep in mind that converting to a gas furnace from an oil-based system (and vice versa) will cost several thousands of dollars. Speaking strictly in terms of new installations, the cost for both systems is quite similar, although gas furnaces tend to be a bit cheaper.
Oil vs. Gas Furnace Costs
Please note that the following prices are based on national averages and meant to serve as a guide only; actual costs may be slightly higher or lower based on the area of the country you reside in.
- Installing a new oil burning furnace costs $5,500 to $12,000; reflected within this price range is the efficiency of the unit and the difficulty of the installation. Buying and installing an oil tankcan easily add $1,000 to the total project cost.
- A new natural gas or propane furnace costs $4,500 to $12,000. The actual cost will be determined by the efficiency of the furnace as well as the distance from the exterior tank to the furnace (the longer the distance, the greater the labor costs).
Installing more than one furnace is always an option. Many homeowners decide to install an electrical furnace as a backup for an oil or gas-fired furnace (or vice-versa). A large home may also need an additional furnace to heat its extensive living space or to provide heat to a detached living space.
Please note that for the prices ranges below, single-stage furnaces tend to be towards the bottom of the range, while three-stage systems are at the higher end.
- Typical gas furnaces cost $3,000 to $6,000, including installation, but can rise as high as $12,500 for extremely efficient models.
- Oil-burning furnace costs, including installation, range from $3,000 to $7,000.
- Electric furnaces typically cost $1,000 to $3,000 with installation. Keep in mind that these low costs will be somewhat offset by higher energy bills. These units are best used as backups or for very small living areas.
- The above prices assume there is already a duct system installed in the house; if there is no existing ductwork or new ductwork is needed, expect to add $3,000 to $7,000 to the total project cost.