Leaving Oil Heat: Gas, Heat Pump or Mini-Splits?

Who still heats with oil

EIA estimates that about 4.13 million U.S. households heat primarily with heating oil in 2026, about 3% of households, down from about 5.05 million in 2021. About 3.39 million of them are in the Northeast^[2]. Oil prices also tend to swing more than gas or electricity prices, which is why oil households often ask about switching.

This guide does not recommend a fuel. It explains how to compare them for your own home, using public numbers you can look up yourself.

Step 1: look up current prices

Heating oil prices change weekly, so any figure in an article goes stale fast. Instead, use the source:

• Heating oil: EIA's Heating Oil and Propane Update publishes average residential prices for the U.S., regions and many Northeast and Midwest states. It is collected only during the heating season, October through March, and updated every Wednesday afternoon. The residential prices exclude taxes^[1].
• Winter forecast: EIA's Winter Fuels Outlook, updated monthly with the Short-Term Energy Outlook, forecasts average winter prices for oil, gas, electricity and propane^[2].
• Your own prices: Your best inputs are your delivered oil price per gallon, and your local gas and electric rates from your utilities' bills or rate schedules.

Step 2: the break-even math

Fuels are sold in different units, so convert everything to the cost of one million BTU of heat delivered into the house. EIA lists the heat content as about 138,500 BTU per gallon of heating oil, 1,036 BTU per cubic foot of natural gas, and 3,412 BTU per kWh of electricity^[3].

• Oil: price per gallon ÷ (0.1385 × efficiency)
• Gas: price per thousand cubic feet ÷ (1.036 × efficiency), or price per therm ÷ (0.1 × efficiency)
• Heat pump: price per kWh ÷ (0.003412 × COP)

Efficiency for oil and gas is the AFUE as a decimal. ENERGY STAR-certified boilers are rated at least 87% for oil and 90% for gas^[4]; older systems can be lower. For a heat pump, COP is heat delivered per unit of electricity, and it changes with outdoor temperature.

The prices in that table are EIA forecasts for the winter as a whole^[2], not this week's price. The pattern is what matters: at these prices, heat from oil costs far more per unit than heat from gas, a heat pump beats oil on fuel cost at modest efficiency, and beating efficient gas takes a high COP. Real-world performance is the key unknown. In a New York study of 20 homes that replaced oil or gas boilers with mini-split heat pumps, the average implied COP was about 2.4, and homes that replaced gas saw no cost savings at the 2020 prices used^[6]. Our heating comparison tool (coming soon) runs this math with your own numbers.

Step 3: what your house needs

• Is gas at your street? If not, the comparison may be only oil versus a heat pump. If it is, ask the utility for a written quote for the service line. Rules on who pays are changing: in New York, starting December 19, 2026, new residential gas applicants must pay the material and installation costs of the facilities needed to serve them^[8]. An oil boiler generally cannot be converted to burn gas; it is replaced.
• Ducts or radiators? Ductless mini-splits add indoor units room by room and do not use radiators. Air-to-water heat pumps can feed radiators, but older systems were often designed for very hot water, so a room-by-room heat-loss check matters.
• Cold weather. ENERGY STAR's cold-climate heat pumps must deliver a COP of at least 1.75 at 5°F^[5], and many homes keep backup heat for the coldest days. ENERGY STAR also recommends that contractors size systems using a "Manual J" load calculation^[9].
• Hot water. Many oil boilers also heat domestic hot water. Removing the boiler can mean adding a separate water heater.
• The oil tank. Federal underground tank rules exclude tanks storing heating oil for use on the premises; state or local agencies may regulate them^[7]. Your local fire or building department sets the steps for removal.
• Safety. Any fuel-burning system calls for carbon monoxide alarms. The Consumer Product Safety Commission says CO alarms should be installed on each level of the home and outside sleeping areas^[10].

Incentives: check before you count on them

The federal Energy Efficient Home Improvement Credit, which covered heat pumps, applies only to improvements made through December 31, 2025, according to the IRS^[11]. Some older web pages still describe it as running through 2032. The federal home energy rebate programs are run by states, and availability varies: some states' programs are open, some are closed or fully reserved, and some have not launched^[12]. Many states and utilities run their own rebates, so your state energy office and your utilities are the places to check.