Oil vs Gas Boiler: Which Costs Less to Heat Your House?

The primary benefit of a gas boiler compared to an oil one is that its much cheaper to install and to operate. For many homeowners looking to save on their monthly heating costs, a gas boiler is the most economical option.

Forced Hot Water Boiler Costs
Gas Boiler
$3900 - $5600
Oil Boiler
$4800 - $6700
Base Boards
$2100 - $3500

See costs in your area Start Here - Enter Your Zip Code

Making a switch from oil boiler to a gas one and vice versa can cost thousands of dollars, so its important to understand the benefits of each.

Lets compare an oil vs gas boiler in terms of energy efficiency, longevity, maintenance, equipment and installation costs.

If you need to replace your boiler, get free estimates from your local plumbers.

Boiler prices

As a rule of thumb a standard gas boiler costs 2-3 times less than an oil one.

The average price for a gas boiler is between $1,800-2,600. There are a few models that cost as low as $1,400 and as high as $4,500.

By comparison, the average price of an oil boiler is between $2,600-4,000. On the low end, few models cost around $2,100. On the high end, there are many models that start from $5,000 and go all the way up to $12,000

However, if you are looking to install a high efficiency gas boiler, you will be paying the same price as for an oil device. On average, a high efficiency gas boiler costs between $4,000-7,500

Installation cost differences

Typically, it costs less to replace an existing gas boiler with a newer model than to install an oil one.

Boiler installation includes removal and disposal of the old boiler. It also includes repair and/or replacement of all lines, ducts and wiring for the system to function properly.

Most homeowners spend around $3,000-4,000 to replace a gas boiler (includes equipment and labor)

However, the average cost to replace a gas boiler with a high efficiency model is between $7,000-8,000.

By comparison, the average cost to replace an oil boiler with a newer model is around $7,000-9,000, depending on whether or not testing and ground clean up are necessary.

Cost to switch from oil to a gas boiler

Forced Hot Water Boiler Costs
Gas Boiler
$3900 - $5600
Oil Boiler
$4800 - $6700
Base Boards
$2100 - $3500

See costs in your area Start Here - Enter Your Zip Code

Switching from an oil to a gas boiler heating system is a very expensive project that involves a lot of labor. On average, homeowners spend $7,000-9,000, but depending on what is involved the cost can go up to $15,000-20,000 or more.

Here is what the estimated price break down looks like:

Install gas line and meter $1,000 – 1,500
Hook up gas lines between meter and house $500 – 1,100
Reline the chimney (stainless steel liner) $100 / linear foot
Replace ductwork $30 – 55 / linear foot
Remove oil tank (above ground) $500 – 1,500
Remove oil tank (below ground) $1,700 – 4,000
Test the soil for any leakage $300 – 500
Minor environmental cleanup from oil leak $2,800 – 4,600
Major ground contamination cleanup from oil leak $12,000 – 95,000

Do realize that these are just general estimates, and the actual price quote can be a lot higher once the HVAC contractor comes in and assesses the scope of work that needs to be done.

Just to give an example of how pricing may drastically change: if your old boiler has asbestos, or the adjacent piping has asbestos insulation, you will be looking at a much higher removal price.

Another factor to keep in mind is that if you go for a condensing gas boiler you will not need to reline the chimney, as it can vent directly to the outside.

You can spend the money that it would have cost you to reline the chimney ($900-1,700) on a high efficiency condensing gas boiler. This is the option that most homeowners chose, especially because there are also federal tax rebates for these boilers.

Finally, if you are considering switching from oil to gas, talk to your local gas company to see if there are any incentives they can offer. Very often fuel providers offer discounts and other ways to save money for people willing to make the switch.

Some companies offer interest free loans for a set period of time, such as 2 or 3 years, to help you pay for the initial installation costs.

Forced Hot Water Boiler Costs
Gas Boiler
$3900 - $5600
Oil Boiler
$4800 - $6700
Base Boards
$2100 - $3500

See costs in your area Start Here - Enter Your Zip Code

Heating costs of oil vs gas

House Heating CostsWhen deciding which boiler to install and whether to make the switch from one energy source to another, heating costs is the primary concern.

Today and for the foreseeable future, the price of gas is cheaper than the price of oil. Domestic gas production is booming, the prices are low and have been steady over the last 4 years.

On the other hand, while the price of oil has been declining over the past 4 years, because its a strictly regulated commodity that is traded globally, there is no way to predict what will happen to the prices in the future. To be fair, there is also no guarantee that the price of gas will remain at its current low in the future.

Since 2002, the cost of oil heating has averaged 30 – 50% more than gas every year.

According to the EIA (US Energy Information Administration), as of December 2016, the price of gas delivered to residential consumers was $9.06 per thousand cubic feet. This price has remained pretty steady since 2013.

As of February 2017, the price of oil delivered to residential consumers was $2.645/gallon. Oil prices have declined in the last four years. In February 2013, the price to residential consumers was $4.175/gallon.

Many people that make the switch from oil to gas save about 50-60% on their heating bill as compared to oil.

Long-term savings on heating costs

If you decide to switch from an oil to a gas boiler, it is important to keep in mind that you will not see savings right away. Because the cost of the switch is so high, it will take at least 5 years to offset the initial installation investment and reap the benefits of the lower heating costs.

Consequently, it is a good idea to switch only if you are planning to live in your house for many years to come. If you think you may move in the next 3 years, it does not make sense to make such a high upfront investment. You will most likely not recoup it when you go to sell your house.

On the other hand, if you need to do other major renovations before you sell and are spending a lot of money anyway, making the switch could be beneficial, as many buyers do prefer gas heating.

Finally, keep in mind that you will be saving the MOST money if you get a boiler than can handle low temperatures, be it oil or gas. The lower the water temperature used to heat the house at a given outdoor ambient temperature, the less you will be paying for heat.

Energy efficiency

The truth is that both modern oil and gas boilers are made to be highly energy efficient. A quality oil boiler can give you about 80-85% energy efficiency, and a standard gas boiler will give you about the same. If you are looking for much greater efficiency, you should consider a high efficiency gas boiler, which will give you 92% + efficiency.

If you don’t mind your oil boiler, and just want higher efficiency, it would be most economical to simply replace the old boiler with a new model. You will see savings right away. To get the highest efficiency out of an oil boiler, its recommended to set the burner nozzle to “low fire”.

However, from the perspective of clean energy, both gas and oil pose serious environmental hazards. Oil production remains one of the worst, heaviest pollutants, and emits a lot more carbon than gas production. At the same time, gas is by no means a “green” heating choice, due to serious pollution issues caused by fracking. A truly eco-friendly heating alternative would be a geothermal heat pump.

Boiler maintenance

Leaking oil boilerIn general, a gas boiler is easier and less expensive to maintain than an oil one.

An oil boiler needs to be serviced more frequently to prevent leaks, and if leaks do happen it becomes an expensive issue to fix. However, new oil boilers are a lot easier to maintain and service than older ones.

By comparison, newer high efficiency, condensing gas boilers are much more costly so service, because they come with very expensive parts that are often difficult to get.

Longevity and durability

In general, oil boilers are a lot more durable than most gas ones. Average service life expectancy of an oil boiler is about 13-25 years. The parts of an oil boiler most susceptible to breaking are the circulator pump and the firebox / chamber. The boiler tank should last pretty much forever, unless there is a serious issue, such as an un-repaired leak.

A standard gas boiler will last about 10-15 years. More expensive, higher quality models can last 20 years or more if they are properly maintained. In general, gas boilers are very durable, and rarely break down.

Keep in mind that properly maintained boilers (both gas and oil) can last much longer: 25-35 years. Some homeowners have Weil-McLain boilers that last 75 years before being replaced!

Repair costs for both oil and gas boilers are about the same, and average $300-800. Repairs may include things like replacing heat exchangers, burners, or lines.

Safety and convenience considerations

From the perspective of safety, many would consider oil to be the winner. This is because “gas”, also known as the silent killer, can leak. Toxic carbon monoxide fumes can be extremely harmful and even lethal if they are inhaled. If oil burns or leaks it does not pose the same danger. An oil leak creates a lot of mess that can be expensive to clean up, but does not pose a risk to anyone in your home.

From the perspective of convenience, gas is an obvious winner. For oil, you need to have a separate storage tank, which means that your supply of oil is limited, and needs to constantly be replenished. Moreover, with an oil storage tank, you run the risk of unexpected oil leaks. You also need to remember to order the oil and have it delivered. You need to live in an area where there are oil providers available. If you happen to run out of oil in the middle of the cold season, your house will be cold until you get your delivery.

On the other hand, gas is delivered through municipal gas piping, so its always available, without you having to worry about it.

Cost to fix a leaking oil tank

One of the biggest problems with an oil boiler is the leaking oil tank. This tank is made of steel, which eventually rusts, and allows the oil to escape into the ground. The more moisture and acid the soil has, the quicker it will cause the tank to rust. To minimize the moisture in the soil, many homeowners also install a sump pump. However, this also adds to the overall cost of having an oil boiler heating system.

If you have an above ground storage tank (AST) you will be able to notice the leak very quickly. However, if you have an underground oil tank, you may not know that there is a problem for many years, because the hole in the tank can be tiny, so the oil will slowly drip out.

In general an oil tank lasts for about 8-10 years before rust issue start to show up. If you know that your oil tank is nearing this age or is older, you should call a licensed environmental company to inspect the site and determine if there is a leak. The company will obtain soil samples around the tank to determine the area that has been contaminated by the leak.

The depth and the amount of soil that has been compromised by leaking oil will determine how much remediation will cost. Its important to get quotes from a number of environmental companies, to get the most competitive price.

Generally, it costs $4,500-15,500 to clean up an oil tank leak.

Removal of an average size above ground storage tank costs $500-900. Removing a large tank can cost up to $2,000. However, removing an underground oil tank starts at $1,200 and can cost as much as $2,500+ depending on the location and the complexity of the job.

Replacing an old oil storage tanks costs $900-4,000 depending on the type of tank and its size.

Forced Hot Water Boiler Costs
Gas Boiler
$3900 - $5600
Oil Boiler
$4800 - $6700
Base Boards
$2100 - $3500

See costs in your area Start Here - Enter Your Zip Code

About Yelena G

Yelena G. has been working in the remodeling and construction industry for over 15 years. Her focus is on construction planning and design as well as project cost estimating. Yelena also has a personal interest in interior design, as well as in unique DIY remodeling projects. Read more about Yelena

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One thought on “Oil vs Gas Boiler: Which Costs Less to Heat Your House?

  1. Grace Turner

    My brother just built a new house. He’s going to have to have a new gas line put in since the house isn’t connected yet.