Converting to a Gas Furnace from an Oil Furnace Costs a Bundle Up Front, Saves Money Each Month

Converting from an oil furnace to a gas furnace will cost you a bundle to install, but will save you real money each month.

Convert Your Oil Furnace Oil Furnace Conversions
All things considered, converting from an oil to a gas furnace will cost you about $4,900. Image: Carrier

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.
Oliver Marks

Oliver Marks A former carpenter and newspaper reporter, Oliver Marks has been writing about home improvements for 16 years. He's currently restoring his second fixer-upper with a mix of big hired projects and small do-it-himself jobs.