What Home Heating Fuel Is More Efficient: Oil or Propane ?

As a broker and also a new home builder, I’ve been confronted with client’s questions of what heating fuel is better a number of times over the years.  The answer is not as easy as one might think.  There are a number of factors that impact fuel choice.

If the home is an existing home, then what’s the age and condition of the existing boiler or furnace?  If the existing equipment is newer and in great shape, replacing that equipment long before it has reached it’s service life can be a waste of money.

Keep in mind that fuel choice is not what drives heating costs as much as reducing heat loss in the home.  Infiltration can be minimized by doing an energy audit and air sealing plumbing & mechanical penetrations in the framing, adding insulation to attic and basement ceiling (yes, heat loss down to a basement is wasteful).  Window and door performance is obviously a big component in the performance of the thermal envelop.  Sealing any duct leakage in HVAC ductwork that’s in unconditioned space.  These are all things that should be looked at BEFORE making a fuel source change in an existing home.

Does the question pertain to an older existing home or a new home being built?  Starting from scratch, IMHO going with high efficiency propane or natural gas is a no brainer given that fuel source is within the US borders.  The new high efficiency LP propane gas or natural gas equipment is normally sealed combustion type setups where outside air is taken into the furnace or boiler and then the exhaust is sent back out via a PVC vent through the sidewall of the home.  There’s really no standby heat lost since there’s no vent connected to a chimney.  Additional savings are realized via the sealed combustion process since makeup air is not taken from the basement area or inside the home and that means replacement air does not have to be heated.

Let’s now drill down on each fuel’s BTU content (measure of heat output per unit of fuel).  Oil is top dog in terms of BTU’s per unit of fuel.  However, oil equipment efficiencies are lower than gas since oil is a “dirty” burning fuel.  One has to then consider what are the BTU’s delivered differences after fuel burned in order to really get a handle on which fuel is better.

The following worksheet compares Oil to Propane (includes 3 different propane equipment efficiencies):

I know some of you might be thinking “he’s way off” on the propane pricing above since you are used to paying costs for propane when you are renting a tank or low consumption user.  If you use propane to make heat & hot water, most folks find that owning your own tank is the way to go since you can get the cost for fuel reduced substantially.  Many suppliers us a margin over cost for refills and if you don’t like your current supplier, you are free to change to another supplier.

Bottom line, High efficiency gas obviously beats oil at today’s current costs.  There’s an added bonus in that the burner in a gas fired boiler does not need annual cleanings like oil fired equipment needs.  You still have to clean furnace air filters and humidifiers, but that’s often a homeowner do-it-yourself maintenance item that’s not that difficult.

If propane or natural gas is used for heating and domestic hot water, then using it for cooking and perhaps an energy efficient gas fireplace or garage heating is a natural extension of the fuel’s capabilities in a home.  Direct vent sealed combustion gas fireplaces are much more energy efficient than a traditional wood burning fireplace (think heat loss via need for replacement makeup air).  Many of my clients used their gas fireplaces for warming their homes during recent power outages due to 2 hurricanes and 1 blizzard in the past two years.

Hope this info helps.


About Greg Hanner, REALTOR®, Broker, e-PRO

Greg has been an agent with Garden Realty since 1989 (and became a Broker in 2008) specializing in single family, condo, and land sales. As a senior Project Mgr. for BROM Builders, Greg stays on the cutting edge with custom single family home and land sales. Greg also serves on the Eastern CT Asso. of Realtors Technology and MLS Committee (former 2014 and 2012 Chairman). If you would like information on custom building in eastern CT, visit www.BromBuilders.com . Greg holds a bachelor's degree from the University of CT and also holds a private pilot's license with an instrument rating. If you are looking for an agent who uses today's technology to maximize their communication abilities, then Greg might be the agent for you. As an e-PRO certified agent, Greg is proactive and savvy about the Internet and he can take the connected consumer seriously as well as meet their online needs.
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3 Responses to What Home Heating Fuel Is More Efficient: Oil or Propane ?

  1. Aid fuel oils says:

    Hi Gregg, brilliant post. Your information is really comprehensive and although pricing structures and so on are different to here in the UK, you still have some great insights that are sure to help many make the right decisions!

  2. real engineer says:

    you failed to answer the question proposed. and the answer you gave was incorrect. well it was partially correct. you did not include condensing oil burners so really you compared apples to oranges. but you went on to discuss the efficiency of appliances not the fuel itself. you are adding to the misconception of propane being an alternative to oil. if you don’t understand the science please don’t pretend to

    • John Bolduc says:

      “Real Engineer” your post seems like you are swimming in numbers and that you are taking offence to the alternative of using a clean burning fuel. There’s no debating from my end that Oil provides more BTU’s per unit of fuel than Natural Gas or Propane gas. The question becomes, what is the equipment’s ability to deliver BTU’s into the home, the cost of the fuel and the cost of maintenance.

      The topic of home heating and domestic hot water heating is very broad. The choices are very dependent on the home efficiency (insulation values, window/door U-Values, solar profile, leakage both in terms of building envelope and ductwork if the home is FWA), current heating system type (BBHW, Hydro-Air, FWA, Radiant), and even size plays a factor. You are overlooking BUILDING SCIENCE and that’s what I deal with on a daily basis. Another factor also is geographic as here in New England, we’ve used predominantly Oil to heat homes for years, but that trend really has changed over the last 5-10 years. Existing homeowners that have aging equipment are faced with making choices. Buyers who are starting from scratch when building new homes hands down vote with their wallets and are buying gas fired equipment. If you look at the homes featured at the Connecticut Home Builders Awards for the past 5 years, there is a dominance in Gas Fired equipment, many homes with Geothermal HVAC and the fact is I can’t recall seeing one home touting condensing oil fired equipment. That’s not to say that condensing oil fired equipment isn’t available and an option for one to consider.

      All options should be considered by a property Owner and I’m not suggesting that everyone change out their perfectly good oil fired equipment that has a service life remaining. That would be stupid and a waste of money. On the flip side, putting condensing oil fired equipment into and existing home without analysis of the existing exhaust venting (either via masonry, All-Fuel vent, or sidewall power vent) can be a recipe for disaster when the sulfur in the fuel condenses and leaves unsightly brown/orange stains on the exterior of the home. I’d venture to say we’re in agreement that there’s a lot to be considered.

      Greg Hanner, REALTOR®, Broker Associate & e-PRO

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