Heating Oil Cost Calculator

Typical Cost To Install Oil Boiler Average: $4,830 - $7,370
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Estimate heating oil prices for your home for one year, based on the latest cost of heating oil in your state, your house size & type of your heating system.

Oil Heating Cost Calculator estimates heating oil usage based on the heat load of your home, and number of heating degree days for oil boiler and/or furnace of standard efficiency (85-87% AFUE), as well as older low-efficiency models.

Calculate Heating Oil annual cost in Virginia

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Heating BTUs (annual): 0 Heating Oil Cost (annual): $0
Gas ¹ Propane ¹ Heat Pump ²
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Units: 0 Therms 0 Gal 0 kWh
Potential Savings ‡: $0 $0 $0
Cost of New Oil Boiler:
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Heating Oil prices last updated on February 15, 2024.

Current Cost of Home Heating Oil

As of February 2024 average cost of #2 heating oil (most common type), is $4.14 per gallon. A typical home in US will use an average of 750 to 1000 gallons pe heating season. At current price, average cost of of heating your home with oil would be $3500 to $4200 per year.

Since prices of home heating oil flactuate all the time, in most cases it make sense to either setup a contact with your supplier at a fixed price (this is done before the start of a heating season), or use a drop-off only supplier, which does not provide emergency / maintenance serive, but offers better spot price than full serivce oil companies.

Heating Oil Price Estimate Results

You will get an estimated heat load for your home (Total BTUs needed to heat your home for the year), approximate number of gallons of heating oil that you will need for the season, as well as cost based on current oil prices in your Virginia, reported by US DOE. Below is the table of your local energy prices, as well as US Natiaonal Averages:

GasOilPropaneElectricity
US Avg: $1.29 / Therm $4.11 / Gal $2.61 / Gal $0.167 / kWh
Virginia: $1.35 / Therm $4.14 / Gal $3.50 / Gal $0.140 / kWh
Thanks to EIA.gov (US DOE agency) for providing this invaluable, accurate and up-to-date information.

Calculation is based on your geographic location (average local winter temperatures, etc), square footage of your home, insulation level of your home, and efficiency of your oil-fired boiler (or furnace), selectable in the calculator.

You will also get costs to heat your home with other types of heating fuels, Natural Gas, Propane, & Electricity (ductless heat pump).

To get an accurate cost estimate, set your house square footage, and if needed, adjust Heating Oil price to what you actually pay to you supplier.

Potential Savings Calculation:

Along with annual cost of heating oil and number of gallons at current price, we also provide estimate of costs of alternative fuels, such as Natural Gas, Propane and Electric heating using Heat Pumps. Costs are based on Virginia average cost of Gas at $1.35/therm, Propane at $3.50/gallon, and Electricity at $0.140/kWh.

Prices for heating oil are based on data from US DOE and is updated bi-weekly. We also estimate the cost of heating your home with “alternative” fuels, such as Natural Gas, Propane and Electricity (using a ductless heat pump).

Check out our comprehensive Heating Cost Calculator to compare the cost of heating with gas vs oil vs electricity vs propane.

¹ Natural Gas & Propane Savings

Potential savings are based on using a 95% AFUE Condensing Boiler OR a 96% AFUE High Efficiency Furnace – whichever you selected in the calculator. All other conditions (insulation of walls, ducts, home size, etc) being equal.

² Electric Heat Pump Savings

Potential savings are calculated for a 2.9 COP high efficiency Hyper Heating Ductless Heat Pump system. COP of 2.9 is typical for a multi-zone Hyper Heat systems from Mitsubishi, Fujitsu,, Daikin, LG, and other top tier manufacturers.

2.9 COP heat output is calculated at 9895 BTUS per 1 kW or power draw. Perhaps 2.9 COP is even on the low end of efficiency ratings among modern Hyper Heat ductless systems. For example a Fujitsu 4-zone (36,000 BTU) xLTH mini-split model is rated at 3.88 COP of ducted application, and 4 COP for ductless.

What is COP? COP or Coefficient of Performance is a fancy acronym for a multiplier of efficiency of a HEAT PUMP system VS Resistive Electric Baseboard heating.

Example: Electric Baseboard Heater produces 3412 BTUs of Heat for 1 kW (1000 Watts) of power. A heating system with 3.0 COP will provide 3 times the heat output for each 1 kW of electricity that it uses. In our case 3412 * 3 = 10236 BTUs per 1 kW.

Bottom line – a 3 COP heat pump is 3 times as efficient as Electric Baseboards or a space heater!

We highlighted Hyper Heat Ductless because this is the ONLY type of a heat pump that can actually heat your home in temperatures at or below freezing, as you can see in our Heat Pump heating efficiency performance overview.

In the above overview, we conclude that Central (whole house) heat pumps are NOT capable and/or made for being a primary heating system, whereas “Cold Climate Heating” Ductless models are capable of being primary heating system for your home in most of lower 48 states of US.

Keep in mind that even the most efficient mini-split heat pumps are rated at around -13°F to -15°F being the lowest outside temperature in which the can operate in heating mode.

Even so, the heat output of these systems is greatly reduced at such low ambient temperature – on average down to 60% of rated capacity.

Oil-Fired Heating Equipment

Typical Cost To Install a Boiler Average: $4,160 - $7,370
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The most common type of oil heating systems is a hydronic boiler, followed by a distant-second type – warm air furnace.

In fact, we estimate there to be 9 oil boilers for each 1 oil furnace installed in US homes.

Neither oil-fired boilers or furnaces have “high efficiency” models, and in most cases top out at 87% AFUE efficiency ratings, compared to up-to 98% AFUE efficiency in gas-fired heating systems.

This is due to how oil-burning heating systems work. They all have an oil burner and a firing chamber.

Oil burner provides flame, and controls flow of oil as well as amount of air intake needed for clean and efficient combustion. Clean combustion is critical, and does affect efficiency in negative way.

For example, you could tune the oil burner to be ~90% efficient, but then exhaust gases will be very dirty, causing lots of soot, that will eventually “clog” and damage your chimney. At the same time ultra-clean combustion will bring down the efficiency.

It is a job of your oil technician to properly tune your burner for maximum efficiency and clean combustion.

PRO TIP: Never have your oil delivery company do service on your oil boiler, because it is in their best interest for you to buy as much oil from them as possible.

Therefore technicians working for the oil supplier will typically “tune” your oil burner so that flame is clean, at the expense of lower efficiency – thus you buy more oil from your supplier.

It is best to spend $100-150, and have an independent oil serviceman do the “tune-up”.

Because there is only one heat exchanger in a typical oil-fired heating system, all excess heat goes out of the chimney.

Compare this to secondary heat exchanger present in high-efficiency furnaces and condensing boilers, where exhaust gases pass through second heat exchanger to extract additional heat, resulting in 95-98% max AFUE, resulting in mere 2-5% heat loss to the exhaust.

Bottom line – if you have oil boiler or furnace, you are stuck at 85-87% efficiency, and are at a “mercy” and honest of a qualified service technician, to provide proper tune-up for your heating system.

Therefore, if you have access to natural gas, or have cheap electricity in your town/city/state, it is recommended to convert to Gas Boiler (or furnace) or a high efficiency Ductless Minisplit Heat Pump system to reduce your heating costs.

In the longer run (3-7 years), the upfront cost of your heating system upgrade will typically pay for itself, and you will be spending less to heat your home.

Upgrading Your Oil Boiler or Furnace

If you have an older heating system (over 30 years old), it is highly recommended to upgrade it to a modern heating system to improve efficiency and reduce your heating costs.

New oil-fired equipment is 85-86% efficient. When you compare that to a 70% efficiency of old oil boiler, you could be as much as 25% off your heating oil expenses each year.

For a typical 2000 sq. ft. home in state such as Massachusetts, you could be saving as much as $890/year at heating oil being $4.75 per gallon.

Typical Cost To Install Oil Boiler Average: $4,830 - $7,370
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If price of oil goes to $5.50, which it was in the fall of 2022, the saving would be over $1,000 per year in direct fuel costs.

Add to that many repair expenses that you would eliminate for many years, and a new boiler, costing between $4500-$7000 could pay for itself as quickly as in 4-6 years!

Use our Boiler Replacement Cost Calculator, to estimate the cost of installing a new boiler.

Switching from Oil to Natural Gas:

If you have gas available in your home – upgrading to a gas boiler (or furnace) is in most cases, the best choice you can make!

At the current price of oil in MA at $4.71/gal and natural gas $2.18/therm, you would be saving about $1,600 per year with a condensing gas boiler and $1380 per year with a standard efficiency (86% AFUE) gas boiler.

The main difference here is cost per 100,000 BTUs (amount of usable heat that we put into our house). In case of gas, where 1 Therm is roughly 100K BTUs, our cost at current MA rates is $2.18.

For #2 heating oil, which has heat content roughly 140,000 BTUs per gallon, our cost for 100K BTUs is $3.36, which make oil 54% more expensive per BTU!

Additionally, a standard efficiency boiler requires almost no maintenance (maybe once in 5 years, you would want it “checked”), so you will be saving at least $150-$200 per year just in tune-ups!

In fact, a high efficiency (96% AFUE) Gas Furnace will cost you $1000-$1500 cheaper to install that standard efficiency (85% AFUE) oil furnace.

Typical Cost To Install New Furnace Average: $4,360 - $7,450
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Switching from Oil to Propane???

Short answer – no.

Long answer – propane has 91500 BTUs / gal, which is roughly 66% of oil’s 140K / gallon (1.5 gallons of propane = 1 gallon of oil). In many states propane is on par with oil prices.

If you run out of propane, you need to wait for delivery. If you run out of oil, you can go to nearest gas station that sells diesel.

In most cases, propane is more expensive to heat with than high efficiency heat pumps. Therefor, unless you need propane-fired heating system, I would not do propane.

Switching from Oil to Ductless Heat Pump (electricity):

Typical Cost To Install Ductless Heat Pump Average: $3,070 - $4,380
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Fortunately in many cases there is a solution to switch from oil, and be more green – and not like they do it in New York City, while the solution is ALMOST the same.

[Rant]
In many cases, homeowners with oil boilers (or furnaces) DO NOT have natural gas on their street.

The unfortunate reality is that over 7 million homes in US do not have gas, and most likely NEVER will.

They are permanently stuck with Oil or Propane, regardless of what “environMental” politicians say.

As much as these wing nuts want to rid US of oil and carbon pollution, “you” cannot just make 7 million households freeze, because “you” don’t like oil.
[/Rant]

The “solution” is a whole-house dustless/minisplit heat pump setup. However it only works if certain conditions are met!

1) You need cheap(er) electricity – preferably below $0.15-$0.18 per kWh.
2) You need high efficiency Cold Climate Heating rated DUCTLESS heat pump.
3) Optional – if you have a large solar array on your roof, even with expensive electricity, this will work, as you would be making most of your power on site, for “free”!

To compare cost of heating a 2000 sq. ft. home with oil VS heating with electricity using 2.9 COP heat pump, let’s do a calculation in Illinois, where it’s cold, but prices are closer to national average.

For oil at $4.41/gal, we get $3,674 (833 gallons). For heating with a mini-split heat pump at $0.156/kWh, we get $1,753 (10,152 kWh). The saving is $1,920, which is more than half!

So clearly the cost of electricity (in absence of solar panels), is the critical part!

However in MA, where I pay $0.4087/kWh, it would cost me $223 more to heat my home with a heat pump. So that would not be very economical.

But that’s what we get in the green states, with most “for the common people” senators on earth – some of the highest electricity prices in the country, because we are going green! That is more “green” for the corporations – ain’t that right Mrs. Warren?

The second most critical part is the type of heat pump. It must be “Cold Climate Rated” and heat in at least -5°F … better yet, a -15°F model, with built in base pan heater, etc. No “Central Heat Pumps” here, as those only heat at temps above +32°F. NEEP Product List is a great resource to find one of these.

NOTE: I checked the NEEP list to see if any of the “Central HP” types are present. I checked Carrier, Lennox, Goodman – not one central heat pump.

The only product type you will find designated as “Central” is a VRF, which is essentially a big mini-split made to work with centrally-located indoor unit. Like a central heat pump, but not at all!

Typical Cost To Install a 3-zone Ductless Heat Pump Average: $8,920 - $11,510
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Bottom line – don’t get fooled by sales people, and false advertisements. Central Heat Pumps are not made for heating!

Finally, if you live in a warmer state, a mini-split heat pump is a no-brainer … most southern states have cheap electricity, and you can use heat pup as AIR CONDITIONER in the summer! This way you need only one piece of equipment for 2 jobs.


And I once again have to get a little political, because of all the idiocracy. Here is my beef with politically forcing “heat pumps”.

– In Massachusetts we have up-to $10,000 in rebates to install heat pumps.
– In NY they offer offer $1440 per TON ($1200 per 10,000 BTUs), without specifying a limit.

Fortunately in NY they smartened up a little bit. They now require the heat pump to be on “NEEP Product List” of Cold Climate Air Source Heat Pumps. Prior, NY used to give massive rebates for “heat pump” to anyone with a heat pump … even the non “cold climate” rated.

I know this for a fact, because I stayed in an AirBnB with a Fujitsu heat pump that is not high efficiency, and not Cold Climate rated. I asked the owner, and she said, they installed it because of huge rebates.

Another piece of anecdotal evidence – we have a comment on our site from another homeowner in NYC who installed a “heat pump” and is now cold, because the thing “is not heating”.

In MA, as long as the heat pump is AHRI listed, it qualifies. No “cold climate” designation needed.

Many other states have similar programs, where electricity costs are double the national average, and a “generic heat pump” is pushed onto unsuspecting homeowners.

Later, they are stuck with expensive over-glorified air conditioners, because decisions to go “green” get pushed down by politicians with zero technical knowledge … I wander who benefits from these policies.

Typical Cost To Install Ductless Heat Pump Average: $3,070 - $4,380
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About Leo Bender

Leo has been a contractor since 2003, specializing in: roofing, siding, general contracting (GC) and residential remodeling. Leo is also a Certified HVAC, Oil & Gas Heating Technician/Installer. In addition to roofing and remodeling, Leo is passionate about Solar, green building and energy conservation, so a lot of my time and energy goes to installing energy efficient heating and cooling systems.


See more about Remodeling Calculator team here


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