Pros and Cons of Heating Your Home With Oil

Home heating oil storage tank

As winter rolls around, the fuel source of your heating system can make all the difference in your home’s comfort and warmth. Natural gas? Effective, but brings a risk of leaks. Electricity? Feasible but can hit wallets hard. Oil, however, offers superior heat output and a longer lifespan. The thing is, it’s not without drawbacks — bulky on-site storage and environmental concerns. To help make the right decision, we’ll explore the pros and cons of heating your home with oil.

Pros of Heating Your Home With Oil

Grey heating oil tank in a basement
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When it comes to heating homes, oil isn’t typically the first option that comes to mind for most people. However, it’s been used as a reliable heating fuel by millions of Americans. To give you an idea, the U.S. Energy Information Administration (EIA) reported that around 5 million homes in the U.S. relied on oil to stay warm during the chilly winter months of 2022–2023.

Oil furnaces are known for their impressive heat output, long lifespan if maintained properly, and excellent adaptability to off-the-grid living.

Let’s break down each of these points:

✓ High Heat Output

Standard oil furnaces score high on the British Thermal Unit (BTU) rate, producing between 80,000 to 90,000 BTUs per hour. In contrast, gas furnaces typically generate around 60,000 to 70,000 BTUs, while electric furnaces struggle to achieve 30,000 to 40,000 BTUs.

What does all this technical jargon mean for you? Think of BTUs as the horsepower of your heating system. It’s a measure of how much raw heating power a furnace can produce. So, the higher the BTU number, the more heat is being cranked out to fight the cold.

This also means a small oil furnace can quickly spread warmth throughout your home. Given their lower BTU output, electric and gas furnaces can take longer to heat your space. You may also experience “cold spots” where the heat hasn’t been distributed evenly.

✓ Safer

Oil has a non-combustive nature, so it won’t evaporate into a gas and mix with the air to create a dangerous situation when exposed —unlike natural gas. If there were a leak in your oil-fired furnace, your house wouldn’t fill with combustible gas. Instead, the fuel would remain largely inert.

Plus, oil heating provides clear warning signs in case of any malfunction, such as smoke and soot. In contrast, electric and gas furnaces have more subtle problems, such as minor electrical issues or slow gas leaks. These issues are harder to spot, and usually, you won’t notice them until they become serious.

✓ Long Equipment Lifespan

With the right maintenance, oil furnaces can last between 20 and 25 years, outperforming gas heaters (which typically last between 15 and 20 years). What gives oil heating systems this edge?

The key lies within their intricate design and how they function. They’re built to handle tough conditions and their higher level of heat conductivity ensures they run effectively for extended periods. However, the actual lifespan of your particular furnace will be influenced by multiple factors, including the quality of the unit, installation, and maintenance, as well as the conditions in which the system operates.

✓ No Need for Pipeline Infrastructure

Unlike natural gas, oil heating doesn’t require a connection to a pipeline infrastructure. Instead, it’s delivered directly to your home’s storage tank. This way, you’ll avoid the hefty installation and maintenance costs often associated with gas networks. What’s more, you can schedule oil deliveries suited to your usage patterns. 

✓ Ideal for Remote Locations

Since oil heating systems are easily installed and maintained in locations without direct access to pipeline infrastructure, they’re perfect for homes in rural and remote areas.

Oil gets delivered straight to your property, and your fuel storage is completely adaptable: you can choose storage tanks that fit your space, above or below ground. 

Cons of Heating Your Home With Oil

Heating oil tank in a basement
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Just like everything else, heating your home with oil comes with some downsides. Some things that can make you think twice include higher ongoing costs and the hassle of frequent maintenance and figuring out where to store the fuel.

✗ Less Efficient Than Gas Furnaces

Okay, now you may be thinking, why are oil furnaces less efficient if they produce a higher heat output? The answer lies in the fact that heating efficiency is not just about how much heat is produced, but also how well that heat is utilized.

A gas furnace, despite producing fewer BTUs compared to an oil furnace, actually does a better job at converting that fuel into usable heat. On average, modern gas furnaces can achieve efficiency ratings of up to 98%, meaning they can convert 98% of the energy in the fuel they burn into usable heat for your home. Conversely, the efficiency of oil furnaces typically falls somewhere between 80% and 90%. That’s a noticeable difference.

Another factor to consider is the fuel wastage during the heating process. Oil furnaces tend to have a more difficult time completely burning the oil, which can result in unburned oil particles being expelled through the chimney. This is not only a waste of fuel (and therefore your money), but also bad for the environment. Gas furnaces, on the other hand, burn their fuel more completely, so they waste less fuel.

✗ Requires Storage

Unlike natural gas or electric heating systems, oil heaters require an onsite storage tank, which means you’ll need to set aside a chunk of space in your home for it. If you’re already a little squeezed for space, this will be challenging.

Plus, there are a few rules and regulations for home heating oil tanks that can’t be ignored. For instance, according to the United States Environmental Agency, aboveground storage tanks (ASTs) need to comply with Spill Prevention, Control, and Countermeasure (SPCC) regulations to prevent any oil spills from contaminating nearby water sources.

On the other hand, underground storage tanks (USTs) must have a robust design and require regular upkeep to avoid any potential leaks. This includes things like creating a barrier against corrosion and actions to prevent the tank from overfilling.

Now, not all home oil tanks need to comply with federal regulations, especially if they’re on the smaller side. However, it’s always best to get in touch with your local or state regulatory agency to get the precise guidelines you need to follow.

✗ Fluctuating Oil Prices

Unlike other types of furnace fuels, oil prices are heavily impacted by global events, environmental factors, and changes in foreign oil production. These elements can cause the price to swing heavily from one season to the next or even from day to day, leaving you to tackle budgeting complexities.

Sure, you can try to pre-plan and order your heating oil in advance when prices are low, but it requires constant vigilance and a bit of luck in timing the market right. 

✗ Frequent Maintenance

Heating your home with oil demands a level of attention and upkeep that, while not necessarily complex, is more frequent than other heat sources like gas or electricity.

Over time, the combustion process —where air and heating oil meet to produce heat— leads to the buildup of soot and other residues in your furnace. In addition, the burner’s nozzle, which sprays heating oil into the combustion chamber, is prone to clogging due to particulates in the heating oil.

Your oil tank also needs frequent check-ups. It can accumulate sludge at the bottom from condensation and gathered impurities, which, if mixed with the oil drawn into your furnace, can affect your system’s efficiency.

To avoid these potential issues, you’ll need to:

  • Regularly check the amount of residues in your furnace and clean it as necessary.
  • Monitor the condition of the oil burner, clean it, and replace the nozzle if it’s clogged.
  • Inspect and clean the oil tank at least once a year (every six months if you use your furnace more than average)

It’s also important to schedule an annual inspection with a professional. They’ll conduct comprehensive checks on your system, spot issues you may miss, and provide appropriate maintenance and repairs.

✗ Expensive Equipment and Installation

On average, the installation cost for oil furnaces runs between $4,717 to $7,283, and that includes both your furnace’s cost and the labor involved in setting it up. In contrast, gas furnaces typically cost between $2,883 and $7,367 to install, while electric furnace installation ranges from $1,853 to $4,433.

And why does oil heating cost so much? Well, an oil furnace often requires a more elaborate installation. As we mentioned earlier, it also needs a storage tank for the fuel, which is an additional expense and requires extra time and skill to install properly. On the other hand, gas and electric furnaces can directly connect to your home’s existing gas line or electrical wiring, so the process is a bit less complex. 

✗ Larger Carbon Footprint Than Gas Fuels

Oil furnaces generate more carbon dioxide (CO2) emissions, which contribute heavily to global warming, than gas furnaces. According to the EIA, burning natural gas releases 52.91 kg of CO2 per million BTU, while propane emits 62.88 kg per million BTU. In contrast, oil releases a significantly higher 74.14 kg of CO2 per million BTU.

✗ Rarely Used

Heating your home with oil is becoming a less common choice these days. For one, there’s been a general move across many parts of the U.S. to reduce the use of fossil fuels and to promote energy efficiency.

Secondly, the availability of heating oil is also more limited, particularly in areas where the infrastructure needed for oil delivery and the supply chain is lacking. Historically, the Northeast region of the U.S. has been the key consumer of home heating oil. However, with a shift towards cleaner energy sources, and increasing competition from natural gas and electricity providers, the use of oil heating even in these parts has been gradually decreasing.

The problem? As oil becomes less popular for heating homes, fewer local suppliers carry it, which results in higher prices and longer delivery times. Locating a technician who can properly maintain or repair an oil heating system can also prove to be challenging and potentially costlier compared to finding help for more common systems.

Should You Heat Your Home With Oil?

Home inspector using digital tablet in furnace room
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Before deciding to get an oil-fired furnace, there are many things you need to consider:

  • Does your area have a strong supply of heating oil, or are alternative energy sources more accessible, such as natural gas or electricity?
  • Can your budget handle the potential swings in heating oil prices?
  • Do you have the time and resources for the regular upkeep an oil heating system requires?
  • Is your home equipped with a space that can safely house an oil tank?
  • How comfortable are you dealing with potentially longer delivery times during peak seasons?
  • How much value do you place on reducing your carbon footprint?

If you’ve found yourself nodding along to the first few questions, especially if you’re living somewhere like the Northeast U.S., heating your home with oil can be the right option for you. But, if the latter questions had you raising an eyebrow, then it’s a good idea to check some alternative heating methods.

FAQ About Oil Heating 

How do oil-fired heating systems work?

An oil-fired heating system works by pumping heating oil from a storage tank into a boiler or furnace, where it’s ignited to produce heat. The heat generated is then transferred throughout the home via a network of pipes connected to radiators or underfloor heating systems.

What types of oil are commonly used in oil furnaces?

Kerosene and Gas Oil (also known as red diesel) are the two primary types of heating oil used in oil furnaces. Kerosene is the most popular choice due to its efficiency, while gas oil is often used in more rural areas

Is it safe to install an oil furnace in my basement?

Yes, it’s typically safe to install an oil furnace in your basement, as long as it’s properly vented and installed by a certified professional. However, you should always check your local building codes and regulations.

Hire a Pro for Hassle-Free Home Heating

Oil is known for its quick, strong heating ability, but it also comes with some challenges like higher costs and the need to store oil safely. So, if you compare it to alternatives like natural gas or electricity, you have to toss up a few things. What’s going to be kinder to your wallet in the long run? Which one is most efficient? Can you easily get it in your local area? Navigating these questions can be quite overwhelming.

That’s where HVAC professionals can step in to ease your stress. They will give you expert advice and guide you to make the best choice for your home. Plus, whichever heating system you choose, they will handle the installation, regular maintenance, and any necessary repairs.

Get in touch with a trusted HVAC professional in your area today to secure your peace of mind.

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Tatiana Barrie

Tatiana Barrie is a seasoned writer and a home improvement enthusiast. From troubleshooting minor issues with her AC unit to performing seasonal maintenance of her heating system, she’s developed a wealth of hands-on experience. She enjoys sharing her practical insights in a way that helps other homeowners to tackle their HVAC concerns with confidence.