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Oil vs. Natural Gas for Home Heating

Posted on Thu, Jun 21, 2012

Despite the mild winter weather this year, many residents in the Northeast aren’t spared from high heating costs, especially those who rely on oil as the main fuel for home heating. According to a New York Times article from earlier this year, the cost of heating an average home in the Northeast with oil in the winter months (October 1st  to March 31st) will be as much as $2,383 this winter, while the cost of using natural gas will be significantly lower. Since 2003, the price of oil has sharply risen above natural gas, and political unrest in the Middle Eastern oil-producing countries will continue to exacerbate the increase, and further widen the gap (Figure 1).

 WSH oil vs gas

Figure 1 – Winter heating cost for an average home in the Northeast (by fuel type)

Source: Cardwell, Diane, and Clifford Krauss. 2012. “As Price of Oil Soars, Users Shiver and Cross Their Fingers.” The New York Times, January 21. 


With the cost of heating oil on the rise, now is a good time to switch to natural gas for home heating for several reasons. From an economic standpoint, natural gas is a cheaper alternative. Switching to natural gas could save you up to 30% or more on your heating bills. While oil prices are likely to remain high and volatile into the foreseeable future, prices of natural gas are expected to remain relatively stable given the abundance of domestic natural gas reserve in the US. Environmentally speaking, natural gas is a cleaner fuel than oil due to its lower carbon emissions. There are also incentives such as rebates and low-interest financing options available from local governments and utility companies that help homeowners convert from oil to natural gas.


One example of such incentives is PECO, an electric and natural gas utility in southeastern Pennsylvania that offers up to $700 in rebates for their customers to convert to natural gas and install a high-efficiency heating system. Homeowners are also eligible to receive a discount toward the installation costs of natural gas service lines, as well as low-interest loans to finance the project. If you decide to make the oil to natural gas conversion, you may want to investigate what incentives and financing options are available in your area. Start with our rebates page!   Click me


If you want to ditch dirty oil for a cleaner alternative to heat your home, but happen to live in an area without access to natural gas, or the costs of connecting gas service is not affordable, there are other options such as a geothermal system or a mini-split system that are both highly energy efficient.


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