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.