Alternative Ways To Heat Your Home: The Pros and Cons of Oil Heat

C.E. Larusso
Written by C.E. Larusso
Updated December 15, 2021
Snow covered cabin in the forest
Photo: alhim / Adobe Stock

Highlights

  • Unlike gas heat, oil furnaces do not produce poisonous gasses

  • Installing and fueling an oil furnace is more expensive and less efficient than other options

  • Oil heating is a great solution for large homes in remote areas with cold winters

  • Installing an oil furnace costs between $6,750 and $10,000

Like clam chowder or ice hockey, home oil heating is something you’re likely to encounter far more frequently in the Northeast than anywhere else in the United States. While oil heats only 8% of U.S. homes today, more than 80% are located in New England, New York, and Pennsylvania. 

Even if your older home passed on the heating trend back when oil was all the rage, the fuel offers benefits that suit the needs of homeowners located off the natural gas grid and larger homes in cold climates.

Oil Heat Pros and Cons

When looking for alternative ways to heat your home, it’s best to weigh all your options. 

Oil Heat Pros

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Photo: Alena Ozerova / Adobe Stock

Similarly chemically to motor fuel, home heating oil has been with us for a long time. The fuel boasts several benefits that have kept it relevant all these years. 

  • Safety: Does not produce carbon monoxide or any other poisonous gasses and is unlikely to explode

  • Heats larger spaces more evenly: Achieves a higher BTU rate per hour, which means a smaller oil furnace can heat a larger space   

  • Decentralized distribution: Does not require a pipeline infrastructure, as fuel is delivered directly to consumers and stored in tanks kept at home 

  • Indicates malfunction clearly: A malfunctioning oil furnace will produce smoke, soot, and unpleasant odors, making it obvious when it’s time to contact a heating oil service professional

  • Furnace lifespan: A well-maintained oil furnace can remain operable for up to 30 years 

Oil Heat Cons

While oil heating is well-suited for homes in remote areas with frigid winters, homeowners with access to a natural gas connection rarely opt to swap their systems for an oil furnace. Here are a few reasons why:   

  • Unstable (often expensive) fuel costs: Home heating oil is subject to the same kind of price volatility as motor fuel, making it more expensive than natural gas or electricity and more difficult to budget for. 

  • Pricier equipment: Expect to pay between $6,750 and $10,000 to install an oil furnace—this compared to a price from $3,800 to $10,000 for gas, and $2,000 to $7,000 for electric.

  • Less efficient than gas: Modern oil furnaces typically rate between 80% to 90% for efficiency, while gas furnaces tend to land between 89% and 98%. 

  • Inconvenience: Requires restocking when supplies are low 

  • High maintenance: Oil does not burn cleanly, producing soot and grime that build up over time and require regular cleaning. Oil furnaces are also more susceptible to leaks and clogs, requiring more frequent repair. 

  • Size: Requires an on-site storage tank, taking up more space in your house than a gas furnace 

  • Cannot be included in HVAC system: While natural gas furnaces can be installed, operated, and maintained as part of a larger HVAC system, oil furnaces and boilers are standalone units. You’ll need to have a separate air conditioning system installed and serviced by a different company rather than relying on a single HVAC service company

  • Fewer service companies: Since oil use is less common, fewer companies service the equipment. 

Is Oil Heat Worth the Price?

There’s no question that oil heat is an investment. The U.S. Energy Information Administration projects an average winter heating bill of $1,734 for homes using oil in 2021, compared to $746 for natural gas users and $1268 for those with electric furnaces.

Oil heat is also less efficient than gas furnaces and does not burn as cleanly. Still, homeowners may deem oil heat a beneficial option if they live in a larger home and want a furnace that lasts for decades. Consider your budget and the heating options available in your area when choosing a furnace in your home. Gas furnaces tend to have a higher efficiency rating (read: lower energy bills) but provide less heat per BTU. The upfront cost for a natural gas furnace is more expensive and is only available if your home is near a natural gas supply.

Oil heat is a good option for people who do not live near natural gas supplies or pipelines. Electric furnaces require a constant energy source to keep your house warm, which could drive your electricity bill up during the winter. Oil heaters stay warmer for longer, and their lifespan is longer than any other heating unit. You may find yourself paying more for repairing or replacing other HVAC systems, including electric.