Is an oil furnace the right choice for my home?
How much does an oil furnace cost installed?
These are questions homeowners ask when considering buying an oil furnace. Let’s start with the first question and then discuss your oil furnace options before looking at oil furnace brands and pricing. There are plenty of oil furnace buying tips along the way to help you make a choice you’ll be happy with going forward.
Is an Oil Furnace Your Best Option?
While oil furnaces were once widely used throughout the United States, they are now most common in the Northeast where, according to the US Department of Energy, access to natural gas and propane supplies are limited but heating oil is readily available.
The reason for this is discovered with a quick look at oil furnace pros and cons:
Oil furnace pros:
- Heating oil is widely available
- Oil produces more BTUs per volume burned compared with natural gas and propane.
Oil furnace cons:
- The maximum annualized fuel utilization efficiency (AFUE) is less than 90% for most models while the maximum of gas/propane furnaces is about 98%
- Oil furnaces, like propane furnaces, require a fuel storage tank and delivery of the fuel
- Oil furnaces must have their oil filters changed often and be cleaned regularly due to the buildup of soot, so a service contract is required
- Heating oil costs more than gas and propane, and the price is more volatile because it depends on global oil costs rather than mostly domestic natural gas and propane production
What these oil furnace pros and cons boil down to for most homeowners is that a gas furnace is a better option unless a consistent supply of natural gas or propane are not available where you live.
What about electric furnaces and heat pumps?
Since we’re talking mainly about the Northeastern US (and Eastern Canada), an oil furnace is preferred to either of those options:
- Electric heat is the most expensive type, and electric furnaces are a good option only where winters are mild
- Heat pumps lose effectiveness in sub-freezing temperatures, so must be backed up by expensive electric heaters in their air handlers or by a fossil fuel furnace (gas/oil) in a dual fuel system
Therefore, in the Northeastern US, an oil furnace by itself or an oil furnace/heat pump combination are your best options when a natural gas or propane furnace isn’t a good choice.
Four Factors that Affect Oil Furnace Cost
Now that we’ve narrowed the range of homeowners considering an oil furnace, let’s focus on factors that affect how much an oil furnace costs:
1. Furnace Quality
In our Gas Furnace Buying Guide, we list Budget, Standard and Premium brands. There aren’t any Budget brands in oil furnaces – Goodman, Payne and Aire-flo, for example, do not make oil furnaces.
Standard brands – moderate cost, 15 to 18-year durability (Brands from the same parent company with the same or very similar oil furnace lineups are listed together):
- Armstrong and Ducane
- Heil, Arcoaire, ComfortMaker, Keep Rite and Tempstar
- Rheem and Ruud
- Thermo Pride
- Century (exclusive to Home Depot) and Comfort-Aire
- Crown Boiler (sold to public through wholesalers like Ingrams
- Miller (for manufactured homes only)
Coleman, Luxaire and York no longer make oil furnaces, though there are many still in use. The same is true for models from sister-brands Maytag, Tappan, Westinghouse, Broan, Fridigaire and Nutone. The Amana/Goodman/Daikin family of brands never made oil furnaces.
Premium Brands – Higher cost, up to 25-year durability
- Carrier and Bryant
- American Standard and Trane
It appears that Trane and American Standard are phasing out their oil furnaces. The lineup is shrinking, as this Trane page with just two models demonstrates, and little detail is available.
2. Furnace Performance
There is less performance variability in oil furnaces than in gas furnaces. Most are single-stage furnaces, which means they run at full capacity whenever on. This makes them noisier than gas furnaces and causes slight temperature swings you might notice. Riello makes one of the very few 2-stage burners, and it is available in Thermo Pride oil furnaces.
The major choice in performance relates to the blower, with your options being single-speed (basic), multispeed (better) and variable speed (best). Multispeed and variable-speed blowers change speeds during the heating cycle to avoid running at full speed before the air in the combustion chamber is sufficiently hot or after the burner has stopped and the furnace is distributing the remaining heat.
3. Furnace Efficiency (and a Caution)
Most oil furnaces have one heat exchanger, so significant combustion heat is lost in the exhaust gases. For this reason, their fuel efficiency ranges from the minimum 83% allowed by law to about 87%. Single-stage burners contribute to lower efficiency too. The best reason to pay more for an oil furnace in the 86% to 87% range rather than a less efficient model is to enjoy the performance advantage of a variable-speed blower. The extra cost will take up to 15 years to recoup through marginally lower energy bills.
Condensing oil furnaces have a second heat exchanger to capture and transfer heat from exhaust gases. These heat exchangers must be stainless steel because the exhaust condensation is very acidic and corrosive. Currently, only Adams and Kerr make condensing oil furnaces, and they offer up to 95% AFUE, easily the best available.
The downside is the potential for early failure because of the corrosion danger. The issue is so concerning that Beckett, a top manufacturer of burners used in most brands, has released a statement on condensing oil-fired units that should be read before you consider buying a condensing oil furnace. Their cost is higher, and while you will save money on oil costs, you might have to repair or replace the furnace much sooner than you would a standard (non-condensing) furnace.
Caution: Our opinion is one held by many other experts in the HVAC industry: A condensing oil furnace is not a cost-effective choice in the long-run.
4. Furnace Size
We’ve covered sizing a furnace for your home and climate extensively in our Gas Furnace Buying Guide that includes a Climate Zone map and the number of BTU per square foot of home needed in each zone. It is sufficient here to suggest that your oil furnace contractor do a load requirement evaluation or Manual-J test to determine the proper sizing of your oil furnace to get maximum efficiency and comfort.
Oil Furnace Prices of Leading Brands
Oil furnace models are made in a range of sizes from about 50,000 BTU to about 150,000 BTU for residential application. In this table, we use the average unit, which is 100,000 to 120,000 BTU in the Unit Only column. The Unit Installed Cost includes basic installation that includes replacing the existing furnace and re-doing the sheet metal plenum.
Extras like installing an oil tank, running an oil line and venting the furnace that can add up to $3,000 to the total cost are not included because few people choose an oil furnace unless they are replacing an existing oil furnace.
Unit Installed Cost
|Armstrong and Ducane||$2,100|
|Rheem and Ruud||$2,200||$4,150|
Depending on your installation requirements, you’ll need one of these oil furnace configurations:
- Highboy/high-boy/hi-boy: Tall, upright unit with the blower below the burner box for standard installation or installation in narrow utility closets
- Downflow/counterflow: An upright unit with the blower above the burner for installation in an attic
- Lowboy/low-boy/lo-boy: Squat unit with the blower case behind the burner case for installation in a crawlspace
- Horizontal flow: Looks like an upright unit on its side, with burner and blower side-by-side for installation in a single-story home
How to Get the Best Oil Furnace Prices
You could save money by installing the oil furnace yourself, but this could also lead to dangerous carbon monoxide leaks, electric shock or a house fire.
We recommend professional installation not just for safety. It is also essential to properly install an oil furnace and tune it properly for the home’s ductwork and other factors. Only a correctly installed oil furnace will run as efficiently and durably as it should.
To get the best total cost:
- Choose a single-speed fan model in the range of 83% to 85% efficiency
- Ask your utility company about rebates and credits for installing an efficient oil furnace, which might cover the cost of upgrading to an 86% or 87% efficient model.
- Request estimates from three installers that know they are competing for the work. We can put you in touch with three of the top installers in your area if you click here. The oil furnace contractors have been prescreened for experience and quality.
Finally, our Homeowners Tactics When Negotiating with HVAC Dealers has helpful tips too.
We trust the Oil Furnace Buying Guide has given you useful tips for your next purchase. Feel free to join the conversation with a question or comment or extend the discussion by sharing this post on social media. Also, the Share your HVAC Price tab at the top is your chance to help other readers by letting them know what you paid recently for HVAC equipment and installation.