What is the Difference Between Gas Furnaces and Oil Furnaces?

What is the difference between gas furnaces and oil furnaces?  That’s a question being asked by consumers looking for the most economical way to heat their homes.  Are there energy cost differences?  Is one type more durable than the other?  What about the initial cost of the furnace and installation?  Let’s take a look at these factors and how they might affect your purchasing decision.

Differences Between Gas Furnaces and Oil Furnaces

Energy Efficiency

With the high cost of energy, this is the primary concern for most of us.  In terms of efficiency, gas furnaces range from 80% to 98%.  The most efficient use up to 98% of the heat produced, wasting just 2%. You can find oil furnaces that achieve up to 95% efficiency but they are extremely expensive.  Unless you are absolutely determined to use an oil furnace and are committed to the greenest oil furnace technology available, these are not a cost-effective option for most of us.

Oil furnaces that are comparably priced with gas furnaces achieve 80% to 87% efficiency.  The cause is that the oil burner is more complex and simply isn’t as efficient.  In terms of your energy costs over an entire heating season, the key is to know the relative costs of fuel in your area.  Home heating fuel, natural gas and propane prices vary significantly across the country and without doing an “apples to apples” comparison in your area, you won’t know which type of furnace will produce lower energy bills.  There are areas in which heating with oil is more economical.  On average across the country, natural gas is the least expensive fuel, followed by propane and then heating oil.  But do the analysis of costs in your area.  A furnace contractor familiar with both types of furnaces will be able to help you determine which type will save you the most money.

Initial Cost

When you compare 95% efficient gas furnaces with 95% efficient oil furnaces, the gas furnaces cost quite a bit less.  However, when you compare 95% efficient gas furnaces with 87% efficient oil furnaces, or 90% efficient gas furnaces with 80-83% efficient oil furnaces, the prices are very similar.  Major brands like Trane, Carrier, American Standard, Rheem, Ruud, York, Amana, Goodman, Armstrong, Heil, Bryant and others make gas furnaces in the range of 80% to 97% efficient and oil furnaces in the 80% to 87% range, making it easier to compare models and prices.

Maintenance and Repairs

Oil furnaces require more maintenance than gas furnaces.  Furnace experts recommend having on oil furnace cleaned and maintained every year while having a gas furnace cleaned and maintained every 2 years.  In reality, most homeowners don’t have their furnaces serviced that often, but to maintain maximum efficiency and reduce the number of repair issues, then that is the best schedule.  When major repairs are required, the costs are comparable because the basic components are quite similar, including a blower motor and fan, heat exchanger, and electrical components.  The one exception is the burner.  Oil burners are very durable but when they do fail, which is rare, the cost of replacing one is greater than the cost of replacing a gas furnace burner assembly.


In existing homes, the cost of installing an oil furnace should be about the same as the cost of installing a gas furnace.  In new homes, the costs vary for gas installation.  The gas company will have to tap into the main gas line and run a line to your home.  Their rates for doing this vary quite a bit.  Some will do it almost free while others pass most of the cost on to the customer.  For oil furnaces, purchasing an oil storage tank is expensive but many oil companies will lease them to their customers at no cost or minimal cost as long as they are purchasing a minimum amount of oil per year from the company.  Oil furnace system installation can be less costly in that case.


What is the difference between gas furnaces and oil furnaces?  There are several that you should be aware of.  Take the factors above into account in your decision.  Find out the costs of heating oil and gas in your area so that you can determine annual costs for running your furnace.  That’s the only way to know which type is most cost-effective where you live.


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