Now that you’ve made the psychological leap from an oil furnace to a gas furnace, grab your calculator and crunch the numbers. When you’ve recovered from sticker shock, subtract the tax credit the feds will give you until the end of 2010—up to $1,500—and remember the $1,120 off your yearly energy bill that the oil-to-gas leap typically reaps, and the upfront costs don’t look so bad.
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.