Oil vs. Gas Heating: Cost, Efficiency, and How to Convert

There’s much to look forward to when the weather turns cool. The coming of winter can mean spending time with friends and family during the holidays and enjoying hot cocoa while watching the snow drift down outside.

However, for many, colder weather also brings complications associated with heating home for the season. If you’re familiar with Delaware winters, you know that means you need efficient heating at the ready.

Many homes in our area make use of either oil or natural gas to heat their homes. These two home heating solutions work similarly, but there are many differences between the two. Here’s what you should know about oil vs gas heating, the relative differences between the two when it comes to cost and efficiency, and what the process is for converting your home’s oil heating system to one that runs on natural gas.

Oil vs Gas Heating Cost

The cost of home heating oil is, of course, linked to the price of crude oil and gasoline. As crude oil prices go up, heating oil prices often increase as well. This can lead to some volatility in the price of oil. An example is how research shows the average price for a gallon of heating oil in 2020 was around $2.21, but projections for the 2022/2023 winter season are much higher.

Very importantly, though, you should keep in mind that home heating oil is usually more expensive in the winter due to high levels of demand. You always have a clearer window into your oil usage, and with automatic oil delivery you can insure that you will always have an adequate fuel supply on hand.  There are also additional benefits, like oil heat tends to deliver a more plentiful hot water supply, the home heating may occur more quickly with oil than natural gas

In comparison, natural gas heating usually costs about half as much as oil to heat the homeNatural gas offers a continuous connection, so you never need to worry about having a new supply delivered in order to heat your home. Natural gas heating costs also tend to be less volatile than oil, though due to current geopolitical situations, natural gas is also experiencing a price increase — likely by around 28 percent for the 2022/2023 winter season

What About the Costs of Converting to Natural Gas?

With the price of home heating oil traditionally higher and more volatile than the cost of natural gas, it’s only natural to consider whether converting your home to gas heat is a worthwhile consideration.

If you are thinking of making such a decision, you should know that there are a number of costs associated with the process, as you’ll need to ensure the infrastructure of your home supports the new heating method. Here are some of the things to keep in mind when it comes to how much converting oil heat to gas will cost in the long run.

• A new gas furnace: Your existing home heating oil furnace or boiler can’t be used to burn natural gas. This means you’ll need to buy a new natural gas furnace or boiler and have it professionally installed. Typical costs for one of these furnaces or boilers and associated conversion work (i.e., oil storage tank removal) can range from $5,000 to $12,000 and possibly even more.
• Extending gas lines from the street: If your home doesn’t already have a natural gas hookup that can be used, one will have to be added from the closest source by the utility company. This is usually from a ‘main line’, which is located out in the street. There may be costs associated with having this work done as well.
• Meeting permit requirements: Finally, depending on your county or the city in which you live, you will  be required to seek out and get permits for the conversion. This can cost both time and money.

This may sound like a lot, but the expense is often highly worth it. Read on to learn why.

Is Converting to Natural Gas Worth It?

While the up-front costs of converting a home from oil to natural gas heat can be high, you will save money on annual costs that will, in pretty short order, allow you to break even. From that point on, all additional savings are extra and on-going.

What kind of savings are we talking? A typical household in Delaware could save more than $3,500^*. You can check your own savings potential via this useful calculator from Delmarva.

 In addition, Energize Delaware offers a rebate program that could get you up to $1,650 in direct cash-back rebates for installing qualifying high-efficiency equipment. We have years of experience helping our neighbors take advantage of Energize Delaware’s savings. We also offer flexible financing up to 12 years, AND we will process the paperwork for you so you never have to worry about it.

Other Things to Consider About Natural Gas Conversion

While the largest factors for heating oil vs. natural gas tend to be cost, with natural gas costing less to heat but more to install or convert, there are other factors to consider as well.

The biggest may be that, depending on your location, the value of your home could actually increase if you convert to natural gas.

Overall, it’s a personal decision based on current and future budgets, as well as whether you want more control by being able to dictate exactly how much oil is delivered when.

As Delaware heating and cooling experts for the past 70+ years, we have decades of experience both delivering oil and installing natural gas systems. Feel free to give us a call when you’re ready to discuss either option: 302-389-5403.

* Calculation based on a two story, 1800 square foot home with an average heat setting of 70F degrees, with typical home air tightness, using heating oil priced at $5.31 per gallon versus a natural gas cost of $1.12 per ccf. That equals $3,815 in savings. This is based on Delmarva Power’s Oil vs. Natural Gas Conversion Calculator published as of 6/2022. The Gas Heat Conversion (“Calculator”) is provided as a reference tool only for the convenience of Delmarva Power customers. For full details, please call our office and visit Delmarva.com.