Calculate cost of gas furnace equipment

Mid-efficiency (73-83%) gas furnace, installed: Average: about $2,800; High end: $10,000

High-efficiency (90-97%) gas furnace, installed: Typically $2,500 to $6,000; possibly $7,000 to $10,000

50-gallon hot water heater: $600

Calculate cost of gas furnace hookup

Dig a trench from main gas line to your house: $1,000 to $1,500, depending on distance. (Sometimes the utility company will wave or reduce that charge, helping to cement a relationship with a new customer.)

Piping from meter to gas furnace: $500 to $1,000

Calculate cost of everything else

Line your chimney to protect against moisture in gas furnace exhaust: $750 to $2,000 (not needed with high-efficiency systems)

Remove above ground oil tank: $750

Remove underground oil tank: $3,000

Total cost of converting to a gas furnace

It you figure the cost of installing a gas heating system, subtract the perks the feds will give you and annual energy savings, the conversion from oil to heat costs roughly $4,900.