Should I switch from oil heat to gas?

Yes, especially if your home has natural gas already for cooking, you should consider converting from oil heat to natural gas for the fuel cost savings alone.

But there are other reasons such as reduced maintenance, lower stack emissions, and never worrying about how much oil is leaf in the tank. If your street has natural gas, but you don’t, consult ConEdison. (ConEdison also has incentives available for oil to gas conversions, but the application deadline for 2013 has passed. So start planning now for 2014!)

Most of us only consider a switch when our old oil boiler gives up the ghost.  But If you like to plan ahead, a good time to switch is during the non-heating months like right now. 

How much would I save? Below we use my home as a hypothetical conversion to try to estimate how much money we would save.

ConEdision has a “Convert to Gas” page with some helpful information. It includes a calculator into which you enter how many gallons of oil you bought over the past 12 months and how much the average price per gallon was.

Collect all those oil delivery tickets or bills to make a table of each delivery’s date, gallons and price per gallon.  If you can’t find those, you can call your oil company. They should be able to give you that information over the phone or by pasting it into an email to send you.

I averaged the annual gallons of oil for the past 4 years to level out colder and less cold winters. Our home has used an average of 741 gallons per year (ouch!). The average price per gallon over the past 12 months that we paid was $4.40 (double ouch!). For perspective, the average price four years ago was much lower, $2.72!

When I plug those two numbers (gallons and price) into the ConEdison calculator tool, it tells me I’d save about $1,500 per year by switching to gas. 

So, if the conversion costs $6,000, it would pay for itself in just 4 years before any incentives are factored in.

But the ConEdison calculator doesn’t know how efficient my old oil boiler is. Nor how more efficient a new gas boiler would be. We consulted with Energywiz Lindsay Audin on how to make more exact oil to gas conversion estimates.

Using the same two numbers above (annual gallons and average price for oil), we also need to estimate the efficiency of our existing boiler and of the new replacement. Let’s start with the easiest answer. As the DOE states:

“Although older furnace and boiler systems had efficiencies in the range of 56% to 70%, modern conventional heating systems can achieve efficiencies as high as 98.5%, converting nearly all the fuel to useful heat for your home.”

Our oil-fired boiler is about 70% efficient; about 30% of the heat from the oil combusted is lost through the chimney. A new EnergyStar gas-fired boiler would be 90% or better. Look for the “AFUE” efficiency rating and the EnergyStar label on new equipment.

AFUE is the ratio of annual heat output of the furnace or boiler compared to the total annual fossil fuel energy consumed by a furnace or boiler. An AFUE of 90% means that 90% of the energy in the fuel becomes heat for the home and the other 10% escapes up the chimney and elsewhere. Btu stands for British thermal unit (the amount of energy needed to cool or heat one pound of water by one degree Fahrenheit.)

The DOE page contains a table that tells me going from an old AFUE of 70% to new AFUE of 90% will save me $22.22 for every $100 spent on fuel now. In past year, I spent $3,264 on oil. So using the simple estimation, I’d save $717 per year.  That’s half of the ConEdison estimate based on even less information. 

• heat value of #2 oil = 140,000 Btu/ga
• heat value of natural gas =100,000 Btu/therm
• 1 gallon US of #2 oil = 1.41 therm
• 1 therm = 100,000 Btus

My hypothetical new gas boiler will be 90% efficient. So the heat value I will get is 90,000 Btus (90% of 100,000 Btus) from each therm of gas combusted, or 0.9 therm. I now can calculate the estimated gas consumption as follows: 726 therms from oil divided by 90% is 807 therms of gas.

At an average actual price in past year of $2.823 per gas therm, I’d spend $2,279 heating my home for the year. So I’ll save about 30% or $984. 

That is less than the ConEdison calculator showed, but still pretty significant savings.

In March, we have greatly increased the insulation, especially in the attic. So the new gas boiler could be smaller in heat output than the old oil boiler was.  Heat output is typically rated as “capacity” in MBtu/hour (thousand Btu per hour), as in 100 MBtu/hr.

So if you button up your home well (and we recommend the EnergizeNY program for doing that!), you’ll be able to downsize the new boiler. Doing so will be less costly than buying an oversized boiler of higher and unneeded capacity.  

PS: Here is an EnergizeNY Case Study of a home owner who both upgraded insulation and converted to a high efficiency gas boiler and got 45% savings on the heating bills!