Propane vs. Oil Heat: Compare Cost, Efficiency, and Performance

Heating oil has warmed homes in the Carolinas for generations, and plenty of those systems are still running well today. At the same time, some homeowners are replacing older equipment with new propane systems that both heat the home and power household appliances like ovens, fireplaces, grills, and pool heaters. 

Both remain dependable residential heating fuels for North Carolina homes. Still, if your current heating system runs on oil, you may wonder if it’s worth staying put or switching to propane. If you have an aging furnace, here are some options to consider as you decide between updating your unit or switching to propane.

Propane vs. Oil Heat at a Glance

Fuel Price Is Just One Part of Overall Costs

Which Fuel Costs Less? 

We wish this common homeowner question had an easy answer, but it doesn’t. 

As with any type of fuel, costs may change throughout the year. Propane and heating oil are both commodity fuels, so prices rise and fall with seasonal demand and broader energy markets. Today’s price per gallon is a snapshot. It won’t tell you the whole story.

Think Beyond the Gallon

The per gallon rate is also just one element of the overall “cost” of the system. You’ve got to total up everything to get a clearer picture, including:

• The efficiency of your current heating equipment
• Annual maintenance costs
• Expected lifespan of the system
• How much fuel your household typically uses each season or year
• Are you looking to lease a tank or own a tank? Heating oil customers must own their own tanks versus propane customers have the option to lease the tank, lowering the up front investment. 

Propane is cheaper per gallon than heating oil. Because heating oil is not as refined as propane, oil also burns with lower efficiency. Traditional #2 fuel oil does contain slightly higher BTUs per gallon (138,500) than propane (92,500), though, which makes them hard to compare strictly by sticker price. 

A high-efficiency propane furnace (up to 98% efficiency, in fact) makes up the difference in BTUs with a combination of burn efficiency and lower cost per gallon. Though it takes more volume of propane than oil to generate the same amount of heat, it still ends up costing homeowners less. Research has shown that propane furnaces cost homeowners 14% less for home heating than traditional oil systems.

Does the Fuel Power Just Your Furnace? Or Multiple Appliances?

If your propane tank is also responsible for heating the pool and powering indoor or outdoor kitchen appliances, your total fuel consumption (and the frequency of needed refills) may go up compared to oil. Your electricity bill will go down at the same time, though, so that’s got to be factored in, too. Electricity is more than twice as expensive as propane per BTU of heat.

Take a Long-Term Perspective on Your Home

On the other hand, a newer, well-maintained oil heating system may continue providing reliable service for many years, and there are no installation costs for new propane lines if you stick with existing electrical power for appliances. There are also up to $2,000 in rebates currently available for homeowners looking to replace their current heating oil equipment with new, higher-efficiency oil-fired furnaces, boilers, water heaters and/or a new aboveground oil storage tank.

Still, the initial setup of a propane system will be worth it in the long run if you plan to live in the home for many years due to the inherent efficiency and lower fuel costs of propane heat vs. oil heat or electric heat. Propane may increase the value of your home, too.

Propane Gives Homeowners More Flexibility

Perhaps the hottest (pun intended) draw to propane vs. oil heat is that propane systems can fuel so many other aspects of the home, such as:

• Water heaters
• Pool heaters
• Kitchen ranges and ovens
• Gas fireplaces
• Outdoor kitchens and grills
• Clothes dryers
• Standby generators

If you use just one fuel for multiple major appliances, it helps simplify your home energy planning and reduce reliance on the electric grid or utility lines. Every area faces outages from time to time. Your propane system keeps many things working, like there’s no outage at all.

Heating Oil Still Has a Place

Trusty heating oil continues to serve many homes throughout the Western Carolinas — and we know you don’t have to fix what isn’t broken. Bumgarner was founded as a local heating oil provider more than 70 years ago. We still supply our communities with timely deliveries of traditional heating fuels to this day. 

If your home already has a modern oil furnace in good condition, replacing it immediately may not make financial sense. Routine maintenance is important because oil systems depend on clean burners and filters for peak performance. With regular service, homeowners may continue to use their heating oil for decades with no complaints.

Some homes also use kerosene, such as in portable heaters or certain older heating systems. Like heating oil, it remains a practical fuel in the right applications.

Which Heating Fuel Fits Your Home?

The final choice is personal to every homeowner and property. If you’re building a new home or replacing an aging heating system, it’s smart to at least compare propane vs. oil heat to make an informed decision.

The math often favors propane in the long run because of its high-efficiency equipment, versatility, and ability to fuel multiple household appliances. But if your current oil heating system is operating efficiently and meets your family’s needs, continuing with heating oil may be the most practical decision.

Contact your local fuel supplier for specific advice to help evaluate your home’s equipment, including fuel usage levels and possible future plans. It’s always best to make your decision based on all the details of your situation rather than fuel prices alone.

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