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How Much Does it Cost to Convert Oil Heat to Gas?

Last Updated on May 19, 2024
Written by CPA Alec Pow | Content Reviewed by Certified CFA CFA Alexander Popinker

The U.S. Energy Information Administration states that heating a home with oil costs an average of $2,046 while heating the same home with gas comes at an average cost of $679. Heating bills are one of the biggest expenses the usual family faces, unfortunately.

How Much Does it Cost to Convert Oil Heat to Gas?

The cost to convert from oil to gas is somewhere between $5,000 and $18,000, based on the experiences of homeowners who have already done the conversion. The final price depends on how complex the process is and is divided into three parts: the cost of the equipment, the hookup, and other expenses.

As each home has its own heating system and piping, you should get in contact with a professional contractor to get a quote for your particular situation.

First off, when getting a gas-fired furnace, you will likely spend anywhere between $1,500 and $6,000. If you’re looking for a high-efficiency system, you should be prepared to pay somewhere between $4,500 and $6,000 or more, while a basic forced air furnace will only cost around $1,700 to $3,500.

The second important cost factor is the hookup. The hookup process involves two steps. These are the outside and inside connections. First, the company will need to dig a trench from the street to the home. Then, an underground pipe will be run from the gas main, located in the street, to your house.

Before after Gas ConversionThen, the utility company will install your own meter. For this process, they may charge anywhere from $1,500 to $2,500. When you reach this point, make sure you haggle, as there is a good chance that the company will reduce this cost or even go as far as not charging you anything for this, in order to secure you as a customer. After that, the inside connection will be needed, and for this, you will need to hire a contractor.

For this job, you should expect an additional cost of $550 to $1,200, depending on the contractor you choose and your location. In total, the outside and inside work for the hookup can cost anywhere from $2,000 to $3,700.

Finally, after the main equipment is purchased and the hook-up work is done, additional expenses will have to be considered. Two additional charges may come from lining your chimney and removing the oil tank if needed. Installing a natural gas system will require you to line your chimney, because of the humidity in the gas exhaust.

You might also like our articles on the cost of water heater installation, appliance repair, or polybutylene pipe replacement.

And for that, the cost can vary between $1,000 and $2,000. If you don’t line the chimney properly, the masonry may be affected. Even though removing the old oil tank isn’t a must, most people choose to do this. The price of removing your oil tank depends on whether it is above the ground or buried. In this regard, for removing an above-ground tank the cost is about $1,000, whilst a buried one can cost more than $3,500.

According to several real estate agents, the total cost for a complete conversion should be between $6,000 and $8,000.

The table below should give you a better idea of what to expect in terms of costs.

Item/Task Price Estimates
Gas furnace equipment (73-83% efficiency) $2,500 to $10,000+
Gas furnace equipment (90-97% efficiency) $2,500 to $6,500
Gas hookup (Utility company trenching) $1,500 to $2,500
Gas hookup (Piping from meter to furnace) $550 to $1,200
Lining Chimney (for high efficiency system) $1,000 to $2,000
Removing oil tank (above ground) $1,000
Removing oil tank (underground) $3,500
TOTAL starts at $6,000+

Important things when you switch to a natural gas furnace

Make sure that a gas line is accessible in your local area before considering the natural gas conversion. Calling your local utility company is usually the way to do this.

Saving money on oil to gas heat conversion

Converting your system of heating may appear to be a costly endeavor, but it can pay off in as little as five years.

Contact your local gas company to determine if there are any inducements you may be eligible for. Based on where you live, you may have some tax refunds and other incentives.

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