Converting an oil furnace to natural gas

By Tom Moor•July 31, 2023

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Converting an oil furnace to natural gas is a big investment. Natural gas is certainly more versatile than fuel oil — you can use it to run your furnace, stove, washer and dryer, grill, and other home appliances. However, there are significant tradeoffs to consider.

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Pros of converting an oil furnace to natural gas

⛽ Natural gas is piped into your home, so you don’t have to remember to fill your tank, as with oil.

🌎 Natural gas burns more completely, so it’s more efficient.

💰 You pay for your natural gas use monthly. You pre-pay for oil.

💥 Natural gas companies offer rebates for switching from oil to gas.

⚖️ Most natural gas is produced in the U.S., making the cost less volatile.

💵 In many cases, it’s less expensive to heat your home with natural gas.

Cons of converting an oil furnace to natural gas

🚫 Your area may not have a natural gas supplier.

🔧 If your home doesn’t already have a gas hookup, you’ll need to install one. This involves running a pipe from your home to the main at the street.

🛢️ If you have an oil furnace, you’ll have to pay to convert it to gas or buy a new one.

🚿 If your water heater burns oil, you’ll need to convert that to gas as well or buy a new one.

🚛 You’ll have to remove and haul away your oil tank.

How do I know if natural gas is available for my home?

Ask your neighbors. Some of them might be longtime residents with advice on dealing with local utility companies.
Call the local utility company and ask about natural gas options.
Search Google for “natural gas availability.” Some websites can tell you whether natural gas is available at your specific address.
If you’re buying a new home, ask the seller or the realtor.

Are there rebates available for converting an oil furnace to natural gas?

The Environmental Protection Agency (EPA) offers federal tax credits through its Energy Star program because gas furnaces are typically more efficient than oil furnaces.

Additionally, many natural gas suppliers offer rebates for customers who convert to natural gas. A quick phone call can let you know if your local utility company offers rebates.

What expenses are involved in converting an oil furnace to natural gas?

If your house doesn’t have hookups to the main gas supply, then you’ll need to bury a line from your house to the street. You might also need to add gas piping inside your house and replace any copper piping with steel or another approved material. This can cost between several hundred to several thousand dollars.

The average cost of a new natural gas furnace is $3,800-10,000. Installation costs $2,000-10,000.

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How can I calculate the cost of natural gas?

You can check natural gas prices on the U.S. Energy Administration website.

Costs vary based on location. Your specific home and furnace will also impact the price.

The U.S. Energy Administration says the average natural gas bill in the U.S. was $121.01 in 2021.

How do I remove my home oil tank?

Oil furnaces usually have large, obtrusive tanks that take up needed space in the yard.

Some services will remove and haul away your old oil tank. Expect to pay $400-3,000 for oil tank removal.

If you can’t afford to convert your furnace from oil to natural gas, but you don’t like your outdoor tank, you may be able to move it. Some smaller tanks can fit inside your basement.