Many homeowners swear by oil heating and oil-fired furnaces, especially in the cold winter months.
Compared to other heating systems, oil furnaces come with a lot of advantages, and they can heat your home up in no time.
But before installing an oil furnace, you must first figure out if it’s the right heating option for your home.
How Does An Oil Furnace Work?
An oil furnace is aheating system that burns oil and converts it into heat.
The heat is then distributed through the home through ductwork, increasing indoor temperature.
An oil furnace consists of the following components: a heat exchanger, burners, a blower, and controls. They’re vented through pipes or chimneys.
Oil furnaces burn furnace oil, which is a petroleum product made from crude-oil distillation.
Newer models can use more environmentally-friendly oils, even diesel fuel normally used for vehicles.
Oil furnaces are typically controlled via thermostats, which come in a variety of models. They require large storage tanks.
Did you know? According to the Department of Energy, only 6% of the population in the U.S. uses oil furnaces as a primary source of heat in their homes.
So, who are these homeowners who are using oil furnaces? You can find many homes with oil furnaces in the northeastern U.S., where the furnace’s efficiency is the most important factor.
Homeowners in these states use oil furnaces because of the limited access to natural gas.
Average Oil Furnace Prices
There are many factors that can affect how much you’ll pay for installing an oil furnace.
The size and the model should depend on your home’s energy needs.
Typically, oil furnace prices depend on the unit’s brand, energy efficiency, and the BTU (British Thermal Unit) heating capacity.
Other cost factors include old furnace removal, installation labor, oil tank replacement, electrical control connections and repairs, permits and inspections, and asbestos inspections.
The average total cost of installing an oil furnace is $4,475 to $13,000.
If you want to install an oil furnace, the price of the unit and the installation are factors, but its operational costs are as well. This refers to your monthly energy bills.
Oil furnaces are less expensive than natural gas furnaces and various other types.
However, their operational costs are higher because oil is more costly than natural gas. Not to mention that oil prices can vary depending on your location.
That being said, oil furnaces must be installed with fuel storage tanks, which can sometimes be more expensive to install than other heating systems.
Oil Furnace Cost Breakdown
Installing an oil furnace means you’ll have two primary costs: the unit and the installation.
| Oil Furnace Installation | Price |
|---|---|
| Total Cost | $1,475-$13,000 |
| Average Cost of Unit | $475-$2,375 |
| Bigger Units | $3,040-$10,000 |
| Installation Fee | $1,000-$3,000 |
| Hourly Labor Rate | $75-$150 |
| Oil-to-Oil Furnace Replacement and Upgrades | $2,517-$6,935 |
| Propane Furnace to Oil Furnace Replacement | $4,600-$10,700 |
An average oil furnace costs somewhere between $2,775 and $4,175.
Keep in mind that an oil furnace that falls in this price range is designed to heat a space of 2,400 to 2,500 square feet. If your home is larger than that, then you’ll have to install a bigger unit, which would cost between $3,040 and $10,000.
When it comes to installation, it usually costs $1,000 to $3,000.
The installation fees depend on the HVAC company, site accessibility, the time of the year, ductwork upgrades, oil-storage tank location, and the electrical connection work.
HVAC technicians charge by the hour, with an average hourly rate of $75 to $150.
Therefore, the total cost of the unit and the installation can fluctuate between $1,475 and $13,000.
The labor fee can also depend on the heating system you had before.
If you’re switching to a new oil furnace, the installation expenses are relatively low. The average price of oil furnace replacement is $2,517 to $6,935.
In comparison, if you’re replacing a propane fuel or natural gas furnace with an oil furnace, the entire project will be much more expensive.
It would cost $4,600 to $10,700 to replace a propane furnace with an oil furnace.
When it comes to operational costs, your monthly bills can range from $80 to $145, depending on how frequently you use the furnace and how well it performs.
Pro Tip: In terms of the annual operating cost, you’ll need to determine your home’s energy needs. You can do this using various online home heating calculators. Doing this can also help you figure out what size unit you should be looking for. If you get an oil furnace that’s too small, it won’t be able to heat your home. But if the unit is too large, it will send your energy bills through the roof.
What Are The Advantages Of Oil Heating?
There are many advantages of oil heating, which is why 82% of homeowners in the northeast United States use this heating system type.
Oil furnaces are extremely energy-efficient, with the highest efficiency rate of 87%.
The only types of furnaces that are more efficient than oil are propane and natural gas furnaces, which can be up to 96% efficient.
They’re an excellent choice for those who live in colder climates because they produce more heat BTU than other types of fuels.
In other words, oil burns quicker, so it heats the house fairly quickly.
Oil is stored in the fuel tank, which is convenient for power outages and emergencies. An electrical furnace would stop working, and even a natural gas furnace might stop flowing in a natural disaster.
Also, using an oil furnace is safer than a gas furnace, which can combust when overheated.
What Are The Disadvantages Of Oil Heating?
Oil heating comes with some disadvantages. Let’s start with the costs.
Although oil heating units are less expensive to install, their operational costs are higher than natural gas or propane furnaces.
Not only that, but oil prices fluctuate throughout the year, so you’ll never know when your energy bills will surge.
Another expense you have to think about when installing an oil furnace is the oil tank, which can be quite pricy too.
Oil furnaces tend to be noisier than other types of furnaces.
They’re also flammable.
But keep in mind that oil furnaces are still safer than natural gas furnaces, as natural gas is much more volatile. Furnace oil is also much less likely to explode due to reaching extreme temperatures.
However, furnace oil can produce harmful gases like carbon monoxide and nitrogen monoxide.
Oil furnaces require more maintenance than other types due to the soot and dirt buildup in the tank.
What’s more, you have to consider their size. Since they come with large fuel tanks, you need to have enough room to store the unit. The unit needs to be accessible.
In addition, if you don’t have a chimney, you will have to install it near an exterior wall so it can vent directly outside.
Which Is Better Oil Furnace Or A Gas Furnace?
Simple answer: Gas furnace is far better. If you have an option – go with gas!
Oil furnaces and gas furnaces work in a similar manner.
They draw the substance from the tank, driving it to the combustion chamber. When burned, it’s converted into hot air and directed to the house through ductwork.
While only 6% of the U.S. population uses fuel oil for their heating system, most homeowners (a whopping 49%) use natural gas.
The main reason homeowners opt for natural gas furnaces over other options is due to its energy efficiency.
Natural gas furnaces have AFUE ratings of 89% to 98%.
That said, oil furnaces produce fewer emissions than natural gas furnaces.
Oil furnaces are better suited for colder climates, whereas natural gas furnaces are meant for temperate climates.
In addition, oil burns faster than gas, so it can warm the home quicker.
Did you know? While it costs more to install natural gas furnaces, the operating costs of oil furnaces are higher since furnace oil is more expensive. In fact, oil furnace operation costs are 2.5 times higher than gas furnaces, not to mention that oil prices fluctuate throughout the year. So, during winter, your energy bills will be even higher.
Oil furnaces require more maintenance than natural gas furnaces.
Oil Furnace Maintenance
One of the aspects you should know about oil furnace ownership is that it might require more maintenance than natural gas furnaces and other heating systems.
That’s due to the fact that more dirt and soot builds up in the storage tank, which is why homeowners need to clean their furnaces and change the filters on a regular basis.
To ensure your oil furnace lasts as long as possible, you can hire HVAC specialists to check the air ducts every year. They can also seal any leaks in the tank.
Another option is to install a programmable thermostat.
Not only will you be able to use the thermostat to control the heat, but it will also prevent the furnace from overworking.
In addition, make sure not to use low-grade heating oils, as they can lead to toxic buildups in the system.
When to Replace Oil Furnace
It’s generally recommended to replace your oil furnace every 15 years because it becomes less and less efficient over time.
So, not only will your furnace stop producing as much heat in subsequent years, but it will also increase your energy bills.
According to some jurisdictions, homeowners are required to replace their oil furnaces after 10 years to avoid the risk of leakages. If oil leaks from your tank, it will take a long time to clean up, and it isn’t good for the environment.
There are many signs that it’s time to replace your oil furnace.
For instance, if the furnace is producing weird noises or if you notice that the furnace is burning much more oil than usual, which results in high energy bills.
Similarly, if the vents are blowing out cool air or dust, it may mean that your oil furnace needs a replacement.
On the other hand, you may just need to replace the fuel tank.
If the tank has visible damage, like dents or rust marks, or if crack lines appear on the tank, it’s definitely time for a new one.
Also, if the tank is over 20 years old, it must be replaced.
When to Bleed Oil Furnace
Furnace oil can become contaminated with dirt and dust over time, which can shorten its lifespan and make it less effective.
The solution to this problem is a process called “bleeding.”
Another reason to bleed your furnace is to get the air out of the fuel lines when no more oil is inside the tank.
Generally, it would be best if you bled your oil furnace when the oil supply runs out and the furnace has stopped working.
While you can bleed your oil furnace by yourself, hiring HVAC technicians is much safer.
When to Clean Oil Furnace
You’ll need to change your oil filters regularly to keep your oil furnace clean.
This will keep the oil burner from clogging.
Other components of the unit also need to be cleaned: the combustion chamber, the heat exchanger, and the flue pipe.
You should also replace the air filter monthly to prevent debris and dust buildup.
Did you know? If an oil furnace isn’t properly maintained, its efficiency will drop from 90% to 70%, or even 60%, after 15 years.
It would also be a good idea to call HVAC technicians to make sure everything is working properly before the beginning of the cleaning season.
Why Is Oil Furnace Used?
When homeowners buy a new home or renovate their current one, they have a few options regarding the heating system. Homeowners can choose natural gas, propane, oil, and electric furnaces.
Most of the U.S. population opts for natural gas because of its low costs.
But natural gas isn’t available in all areas in the U.S., which is one of the reasons homeowners opt for oil furnaces rather than natural gas.
Do People Still Install Oil Furnaces?
Natural gas is limited or completely unavailable in some areas, like the northeastern part of the U.S.
That’s why homeowners rely on other heating methods, such as propane furnaces, boilers, heat pumps, electric space heaters, ductless mini-splits, and oil furnaces.
PRO TIP: If you are choosing between an oil furnace and oil boiler (meaning you considering both ducted and radiator-based heating system), our recommendation is BOILER.
Furnace heat is often uneven, due to air flow restrictions, and on/off cycling. You also waste a lot of heat in the duct work, even when it is insulated!
If you’re having trouble deciding between these alternatives, it should boil down to your home’s energy needs, your budget for the installation, and how much you expect to pay for energy on a monthly basis.
What Is The Life Expectancy Of An Oil Furnace?
Oil furnaces last 15 to 25 years on average.
If they’re maintained properly, they’ll be able to run at peak efficiency and last much longer.
High-efficiency oil furnaces can even last for 30 years with regular maintenance.
The life expectancy of your oil furnace doesn’t only depend on how often and well you maintain it.
It can also be affected by its quality, usage, installation, and repairs.
What Is The Most Efficient Oil Furnace?
When buying a new oil furnace, there are a few factors to consider.
The most important is to figure out if the new oil furnace won’t surpass your expected annual operating costs. You can do this by checking the furnace’s efficiency ratings.
Most modern furnaces extract 80% to 90% of the energy in oil and convert it into heat that warms up your home.
You then need to ask yourself whether the furnace will be big enough for your home.
If you choose to invest in a larger and pricier oil furnace, it will pay off more in the future. Not only will it operate at a higher efficiency, but it will last longer as well.
To ensure the furnace is the right size, you have to look at its BTU and choose one appropriate for your home’s size.
For instance, if you live in a 1,500-square-foot house, your oil furnace should have a BTU of 72,000 to 95,000. For a home of 2,000 square feet, look for an oil furnace with a BTU of 115,000 to 130,000. If your home is 2,500 square feet, a 130,000 to 150,000 BTU output is adequate.
Oil furnaces with two heat exchangers increase efficiency to approximately 90% to 97%.
Pro Tip: If you install a high-efficiency oil furnace, you may be eligible for a federal tax credit of up to $300 and other local rebates.
The best oil furnace brands are Adams, Kerr, Miller, Rheem, Trane, and Regal.
These HVAC companies offer high-quality oil furnaces that come in different sizes, BTUs, and oil capacities.
Stay Warm In Winter With An Oil Furnace
While many homeowners prefer natural gas furnaces, others are switching to oil heating.
Oil furnaces are cheaper to install, heat the house faster, and are better suited for cold climates.
As long as you take proper care of your oil furnace, it can keep your family warm for up to 30 years.
