Oil vs. propane furnaces

HVAC Logo IconBy Tom MoorAugust 1, 2023

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Without a natural gas source, most homeowners turn to either propane gas or oil furnaces for their heating needs. When replacing an older furnace, it is possible to switch to a different fuel type, though most homeowners stay with what they already have.

If you’re deciding between an oil vs. propane furnace, consider the following variables.

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Oil vs. propane furnaces: cost of fuel

Home heating oilprices are at $5.46 a gallon (as of October 2022).Residential propaneis at $2.66 per gallon.

Oil furnaces typically burn 0.8-1.7 gallons per hour. Propane furnaces burn about 2.2 gallons per hour.

This means propane furnaces are about $1 cheaper to run per hour.

Price per gallonPrice per hour
Oil furnaces$5.46$6.83
Propane furnaces$2.66$5.85

Oil vs. propane furnaces: cost of furnace

An oil furnace costs $6,750-10,000. Furnace installation costs $2,000-10,000, according to HomeAdvisor.

A propane furnace costs $700-3,500. Installation ranges $1,000-2,000, according to HomeAdvisor.

Average system costAverage installation cost
Oil furnace$6,750-10,000$2,000-10,000
Propane furnace$700-3,500$1,000-2,000

Furnace types: propane vs. oil

There are three styles of oil furnace:

↔️ HorizontalAir enters one side and leaves via a duct at the back. These furnaces can be laid on the ground, placed on a platform, or suspended from the ceiling. They are good for smaller homes.
⬆️ Upflow Air is taken from the bottom and forced upwards. It is then pumped out the top as soon as it hits the right temperature.
⬇️ DownflowA fan is used to draw air into the top of the furnace. The air is then warmed and expelled through the bottom of the unit.

There are three types of propane furnace:

🪟 Wall unitsBest suited for small homes or a single space, such as a garage, due to their convenient size.
🏠 Central unitsThese units are bigger but are much more efficient as they can be powered from any location within the house.
🔥 Combination heatersWith a combination heater, there is a dual function in heating the house and also providing propane fuel to other appliances. Combination heaters can also use any excess heat available, thus eliminating energy waste.

Pros and cons of oil furnaces

✅ Pros❌ Cons
Non-combustibleHeats slowly compared to propane
No carbon monoxide fumes Difficult to control heating output
QuietNot generally energy-efficient
Burns less fuel per hour compared to propaneBurning creates more particulates
Requires more maintenance

Pros and cons of propane furnaces

✅ Pros❌ Cons
Heats quicklyHigh cost compared to electricity
Inexpensive compared to oilNonrenewable energy source
More environmentally friendly than oil

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Oil and propane furnace buying guide

When shopping for an oil or propane furnace, consider these factors

🛢️ Fuel availabilityIt’s simpler to stick with the same fuel type as your existing heating appliance. If you decide to switch from oil to gas or vice versa, make sure that fuel is readily available in your area and that you have a place to store it.
💰 CostConsider the upfront investment as well as the ongoing cost of running the furnace.
🌎 Efficiency Furnace efficiency is measured with AFUE ratings. The higher the rating, the more efficient the furnace.
💨 Blower speedSingle-speed furnaces are the least expensive and the least precise. Dual-speed furnaces allow for more control. Variable speed furnaces allow you the ultimate in customized home comfort.
📏 SizeHave an HVAC professional conduct a heating study to ensure you purchase a furnace with the correct heating output for your home.
☂️ WarrantyDifferent manufacturers offer different warranties. We recommend you choose a system that comes with at least a 10-year parts warranty.

Oil vs. propane furnaces: the bottom line

In most cases, propane furnaces make more sense than oil. They’re less expensive to purchase and to run. Plus, they’re more environmentally friendly.

However, if your home already has an oil furnace and you’re looking for a replacement, it may be more convenient and cost-effective to stick with an oil furnace.

Our pros can help you choose the right furnace for your home.

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