Updated: August 2023

The Oil Vs. Electricity Furnace Showdown: Which Is Right for You?

When you’re considering whether to install an electric or oil furnace, you might be wondering which one is right for your home. In this post, we’ll break down the benefits of these two heating options and help you decide which one will make the most sense for your situation.

Electric vs. Oil Furnace: What You Need to Know

In the past, oil furnaces were the standard for heating homes. But, now there are far more options. There are electric, propane, and even wood-burning heaters that can be used in place of a traditional oil furnace. But, how do you know which one is right for you?

Oil Furnaces

A newer oil furnace has an efficiency rating of 80 – 90%. The older the furnace, the lower the efficiency will be. Their efficiency is not as good as electric furnaces, but they can be more affordable to operate if you have a large home or live in a colder climate. You’ll also need to keep an eye on your oil tank and make sure it’s always full before the weather gets cold again.

If you let it run out of fuel before winter is over and start using electric heat instead, chances are that your electric bill will be higher than normal since electric heaters cost more per BTU than oil furnaces do.

Installation Costs

The average cost of installing an oil furnace is about $4,500 to $5,000. This cost includes labor and materials. The price may vary depending on the brand and size of the unit.

Installing an oil furnace can be a complex process because the equipment must be connected to the central heating system. It’s also important that you have enough space for your new furnace for it to work effectively.

Repair Costs

Repairs to an oil-fired furnace can cost anywhere from $400 to as much as $2,500 or more if there are major repairs needed, such as full replacement of the unit itself or parts like motors or valves that need replacing.

Cost to Operate

The average price of heating oil ranges from $3 to $3.50 per gallon. How long a tank will last depends on the size of the tank and how much you use heat.

The typical use is 0.8 to 1.7 gallons per hour. If you have a 300-gallon tank, you can expect to fill it twice per month, if you use heat for 10 hours per day or more. At $3 per gallon, filling that tank will be expensive. You should look into options for conserving heat to keep these costs down.

Safety and Health Concerns

The biggest concern with oil furnaces is the fire hazard. Oil fires can be very dangerous because they burn very hot. Oil furnaces also have a higher carbon footprint compared to other types of heating systems because they release more carbon dioxide into the atmosphere. However, they are also cost-effective and can be less expensive than gas or electric furnaces if you live in an area where fuel prices are high.

Lifespan of Oil Furnace

Oil furnaces last longer than electric furnaces. An oil furnace has an average life expectancy of 20-25 years, while an electric furnace lasts roughly 12-15 years.

Electric Furnaces

Electric furnaces are energy efficient and cost less to operate than oil or propane furnaces. They also produce less noise than other types of furnaces do. The efficiency of electric furnaces tends to be between 85% and 95%.

Installation Costs for Electric Furnace

Installation costs are an important factor when deciding whether to buy a furnace. The average cost of installing an electric furnace is between $1,000 and $1,500. The unit itself may run between $850 and $1,200.

Repair Costs

The average cost of repairing an electric furnace is around $100-$300, while the average cost of repairing an oil-fired furnace is $600-$800. The average cost of repairing a gas furnace is $600-$700.

Energy Efficiency

Energy costs for electricity are calculated by kilowatt hours. The average rates for electricity across the country range from 9 to 14 cents per kilowatt hour. Depending on your usage and whether or not you have a programmable thermostat, your cost per month will range anywhere from $216 – $300 per month in electricity costs.

Safety and Health Concerns

Electric furnaces don’t burn fuel, so they don’t produce carbon monoxide. However, if there’s a problem with the electrical system in your home, electric furnaces can pose other safety hazards. A short circuit or power surge could start a fire.

Lifespan of Electric Furnaces

The average lifespan for an electric furnace is 12 to 15 years, depending on how well it was installed and maintained. If you live in an area where winters are mild, expect your furnace to last longer than someone who experiences extremely cold winters every year.


An electric furnace doesn’t require any fuel or oil. This makes it more efficient than an oil heater, which can be tough on the environment and your wallet. Electric furnaces are more efficient than oil furnaces and a better choice for homes located in milder climates. An electric furnace will not work if the power goes out, while an oil furnace can be operated on its own fuel.

Oil furnaces can be messy and smelly because they use fuel oil instead of electricity. Also, some heating oil companies require a set limit to fill your tank. Oil furnaces tend to be more durable and last longer than electric furnaces — they can last 20 years or more.

Which Is Best?

The answer will depend on many factors, including the size of your home, the climate you live in, and how many hours per day you use heat. Other factors include your budget, the cost to operate, and maintenance fees.

If you live in an area that has long, cold winters or extreme temperatures, then an oil furnace may be a good choice for you. Also, if you frequently experience power outages in the winter, then this type of furnace may be better suited than electric heat.

However, if you live in milder climates and worry about the safety of children and pets, then an electric furnace may suit your needs better. Programmable thermostats can help you keep energy costs down by raising the heat only when you are home.

There’s no clear winner. Both types have pros and cons, and it depends on what you need and what is available in your area. The right choice depends on your circumstances.

We Can Help

A/C Doctors is a premier HVAC company serving Gilbert and the surrounding area for over 20 years. We’ve been providing our customers with high-quality heating and cooling service and products, as well as competitive prices.

If you need help finding a suitable furnace for your home, contact us to schedule an appointment. We’ll make sure everything goes smoothly.

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