How Much Does It Cost to Have a Furnace Installed
How much does a new oil furnace cost to install or replace?
$2,500 – $6,000 Average replacement cost
$3,000 – $10,000 High-efficiency system cost
An oil furnace replacement costs $2,500 to $6,000 on average. A new oil furnace installation with an oil tank replacement costs $4,200 to $8,800. Oil furnace prices are $1,200 to $4,000 for standard oil heating systems, without installation. High-efficiency oil furnaces cost $3,000 to $10,000.
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New oil furnace cost
A new oil furnace costs $2,500 to $6,000 to replace on average. Oil furnace prices are $1,200 to $4,000 for the oil burner, plus $1,000 to $3,000 for installation labor. Operating costs to run a forced-air oil furnace are $80 to $145 monthly. The best oil furnace brands are Adams, Kerr, and Regal.
| Home size (Square feet) | Unit cost | Total replacement cost |
|---|---|---|
| 1,300 – 1,600 | $1,400 – $2,600 | $2,400 – $5,600 |
| 1,600 – 1,900 | $1,500 – $2,700 | $2,500 – $5,700 |
| 1,900 – 2,200 | $1,600 – $2,800 | $2,600 – $5,800 |
| 2,200 – 2,600 | $1,700 – $3,000 | $2,700 – $6,000 |
| 2,600 – 3,200 | $2,000 – $4,000 | $3,000 – $7,000 |
- Oil furnaces are commonly used in colder climates like the Northeastern United States.
- Oil furnaces provide more heat per BTU than other fuels, but has a lower energy-efficiency rating (AFUE) than natural gas.
- Oil furnaces last 15 to 25 years on average.
- Oil-burning furnaces require a large storage tank.
- Regular maintenance is more extensive due to dirt and soot buildup and requires changing filters frequently.
- Oil furnaces are cheaper upfront but cost 2.5 times more to operate than gas systems.
- Compare furnace installation costs of all fuel types, including gas, electric, and propane.
Table of contents
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- New oil furnace cost
- Average cost
- Oil furnace replacement cost
- Oil furnace prices
- High-efficiency
- Cost by brand
- Cost by BTU
- Oil furnace installation cost factors
- Efficiency
- Labor cost
- Old furnace removal
- Oil tank replacement
- Permits
- Converting propane to oil
- Operating cost to run an oil furnace
- Oil-burning furnace pros and cons
- What size oil furnace do I need?
- What is an oil furnace?
- How long does it last?
- When should I replace it?
- Hiring an oil furnace installer
- Furnace replacement near me
Average cost of new oil furnace installation
The following table shows the average cost to install a new oil furnace.
| National average cost | $4,000 |
| Minimum cost | $2,200 |
| Maximum cost | $13,000 |
| Average range | $2,500 to $6,000 |
*Based on 40 project costs reported by HomeGuide members.
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Oil furnace replacement cost
An oil furnace replacement costs $2,650 to $7,300 on average, including permits. Total oil-burner replacement costs depend on the furnace location, system complexity, electrical upgrades, and ductwork modifications.
| Factor | Average cost |
|---|---|
| New furnace | $1,400 – $2,800 |
| Installation labor | $1,000 – $3,000 |
| Permits & inspections | $250 – $1,500 |
| Total | $2,650 – $7,300 |
*Labor includes removing the old furnace.
Ducts need full or partial replacements if they don't fit new building code standards, have leaks, or don't fit with the new furnace parts. Ductwork replacement costs $1,400 to $5,600 on average or $25 to $55 per linear foot.
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Oil furnace prices
Oil-fired furnace prices for homes are $1,200 to $10,000 without installation, depending on the energy efficiency, brand, and BTU heating capacity.
High-efficiency oil furnace prices
High-efficiency condensing oil furnaces with 90% to 97% AFUE ratings cost $3,000 to $10,000 from brands like Adams, Kerr, Granby, and Thermo Pride. Condensing furnaces have two heat exchangers and an extra vent or condenser drain. Basic oil furnaces are 80% to 87% efficient with one heat exchanger.
| Type | Price range | AFUE |
|---|---|---|
| Standard efficiency | $1,200 – $4,000 | 80% – 87% |
| High-efficiency | $3,000 – $10,000 | 90% – 97% |
*Not including installation. AFUE stands for Annual Fuel Utilization Efficiency, which is the energy-efficiency rating.
A high-efficiency unit may be eligible for a federal tax credit of up to $300 and other local rebates.
Hybrid heating or dual-fuel systems that use an air-source heat pump are the most energy-efficient. Adding a hybrid heat pump costs $2,500 to $6,000 more on average.
Best oil furnace prices by brand
The best oil furnace brands include Adams, American Standard, Carrier, Kerr, Regal, Trane, and Thermo Pride. Some brands offer extended warranty options and high-efficiency furnaces.
| Brand | Unit cost | Total replacement cost |
|---|---|---|
| Adams | $3,100 – $10,000 | $4,100 – $13,000 |
| American Standard | $1,200 – $2,000 | $2,200 – $5,000 |
| Armstrong Air | $1,200 – $4,300 | $2,200 – $7,300 |
| Bryant | $1,500 – $3,900 | $2,500 – $6,900 |
| Blueridge | $1,500 – $2,000 | $2,500 – $5,000 |
| Carrier | $1,800 – $2,600 | $2,800 – $5,600 |
| Century / Mars | $2,000 – $4,000 | $3,000 – $7,000 |
| Comfort-Aire | $1,700 – $3,000 | $2,700 – $6,000 |
| Crown Boiler | $1,900 – $3,100 | $2,900 – $6,100 |
| Ducane | $1,400 – $3,700 | $2,400 – $6,700 |
| Granby | $1,800 – $3,400 | $2,800 – $6,400 |
| Heil QuietComfort | $1,700 – $2,200 | $2,700 – $5,200 |
| Kerr | $3,300 – $5,000 | $4,300 – $8,000 |
| Lennox | $1,900 – $3,200 | $2,900 – $6,200 |
| Miller / Nortek | $1,900 – $4,200 | $2,900 – $7,200 |
| Olsen | $1,700 – $3,700 | $2,700 – $6,700 |
| Regal / Regal Star | $1,800 – $3,000 | $2,800 – $6,000 |
| Rheem / Ruud | $1,400 – $4,000 | $2,400 – $7,000 |
| Thermo Pride | $2,300 – $3,200 | $3,300 – $6,200 |
| Trane | $1,400 – $3,000 | $2,400 – $6,000 |
| Williamson-Thermoflo | $1,700 – $3,500 | $2,700 – $6,500 |
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Cost of new oil-burning furnace by BTU
A new oil furnace costs $1,200 to $4,000 without installation, for standard-efficiency models. Oil furnaces range from 60,000 to 150,000 BTUs per hour of heating capacity.
| Furnace size (BTU) | Unit price | Total replacement cost |
|---|---|---|
| 60,000 | $1,200 – $2,400 | $2,200 – $5,400 |
| 70,000 | $1,300 – $2,500 | $2,300 – $5,500 |
| 80,000 | $1,400 – $2,600 | $2,400 – $5,600 |
| 90,000 | $1,500 – $2,700 | $2,500 – $5,700 |
| 100,000 | $1,600 – $2,800 | $2,600 – $5,800 |
| 120,000 | $1,700 – $3,000 | $2,700 – $6,000 |
| 140,000 | $1,800 – $3,700 | $2,800 – $6,700 |
| 150,000 | $2,000 – $4,000 | $3,000 – $7,000 |
*Based on 80% to 87% AFUE furnace models.
British Thermal Units (BTU) measures the amount of heat output. A 100,000 BTU furnace with 90% efficiency only produces 90,000 BTUs of heating.
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Oil furnace installation cost factors
A new oil furnace installation costs $2,500 to $6,000 on average, depending on the required ductwork modifications, electrical upgrades, and whether it's a new install or replacement. All oil furnaces need a 120-volt electrical connection, oil-storage tank, and exhaust ventilation nearby.
| Factor | Average cost |
|---|---|
| Old furnace removal | $150 – $400 |
| New oil furnace | $1,400 – $2,800 |
| Installation labor | $1,000 – $3,000 |
| Oil tank replacement | $1,000 – $6,200 |
| Replacing ductwork | $1,400 – $5,600 |
| Asbestos inspection / testing | $250 – $700 |
| Asbestos abatement | $700 – $2,200 |
| Electrical control connections & repairs | $100 – $250 |
| Permits & inspections | $250 – $1,500 |
| Condensation drain (high-efficiency models) | $200 – $600 |
| Stainless steel chimney liner (low-efficiency models) | $900 – $3,800 |
Oil furnace efficiency
Most new oil furnaces have 80% to 87% AFUE efficiency ratings. High-efficiency oil condensing furnaces are 90% to 97% efficient because they have two heat exchangers instead of one. Oil furnace efficiency decreases to 60% to 70% after 15 to 20 years without annual maintenance.
Improve the system's overall energy efficiency by:
- Adding or upgrading home insulation costs $900 to $3,000 and helps lower energy bills.
- Window replacement costs $400 to $800 per window.
- Window glass replacement costs $150 to $500 per window.
- Air duct cleaning costs $300 to $700 on average or $25 to $45 per vent.
- Smart thermostat installation costs $225 to $400 on average.
- Choosing a furnace with a variable-speed blower increases energy efficiency.
Labor cost to replace an oil heating system
Labor costs for oil furnace replacements are $1,000 to $3,000 on average. HVAC installers charge $70 to $100 hourly. Oil furnace installation takes 6 to 12 hours on average. Prices depend on site accessibility, ductwork upgrades, electrical connection work, and oil-storage tank location.
- New oil furnace installation labor is $1,200 to $2,200 on average with favorable site conditions.
- Each contractor's assistant costs an additional $30 to $50 hourly.
- Installations in crawl spaces and attics cost more than standard basement installs.
- Oil furnaces installed in unventilated areas need additional ductwork, a PVC flue, and sometimes an external vent through the outside wall.
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Old oil furnace removal and disposal
Removing and disposing of an oil furnace costs $150 to $400 on average. Most contractors include this service in the labor costs of their quote. Ask HVAC technicians if they offer discounts on oil furnace removals when the old unit contains valuable scrap metals.
Heating-oil tank removal or replacement cost
Oil tank replacements cost $1,000 to $6,200 on average, depending on the tank size, location (basement or underground), and pipe length to the tank. Oil tank removal alone costs $400 to $3,500 according to the tank's condition and whether it's above ground or underground.
| Tank type | Replacement cost | Removal only cost |
|---|---|---|
| Above ground (basement) | $1,000 – $4,300 | $400 – $1,500 |
| Underground | $1,600 – $6,200 | $1,000 – $3,500 |
- Cleaning underground clogged oil lines costs $200 to $1,000 on average.
- Above-ground oil tank installation takes 3 to 5 hours, and underground oil tanks take 8 to 14 hours to install.
- When replacing an oil furnace or switching to a different fuel source, the oil tank and line typically need replacing as well.
- In some states, removing unused oil tanks underground is mandatory.
Oil furnace permits and inspection fees
Oil furnace permits and inspection fees cost $250 to $1,500 on average, depending on local building codes and whether it's a replacement or new installation. Electrical permits cost $50 to $350 for upgrading wiring to the furnace controls in older homes. Contractors should pull all permits.
Cost to convert propane furnace to oil
Replacing a propane furnace with an oil furnace costs $4,600 to $10,700 on average. Installers remove the old propane tank, propane lines, and old furnace. Then contractors install a new heating-oil tank, oil lines, and oil furnace.
| Factor | Average cost |
|---|---|
| Removing old propane furnace | $150 – $400 |
| New oil furnace installed | $2,600 – $5,000 |
| New oil tank installed in basement | $1,600 – $3,800 |
| Permits and inspections | $250 – $1,500 |
| Total | $4,600 – $10,700 |
Additional costs may include:
- Removing a propane tank costs $500 to $1,000 on average. Some companies remove a leased tank for free, depending on the contract terms.
- Replacing ductwork costs $1,400 to $5,600 on average or $25 to $55 per linear foot.
- Installing an underground oil tank costs $1,900 to $6,000.
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Operating cost to run an oil furnace
Operating an oil furnace costs $80 to $145 monthly or $1,000 to $1,750 per year to run on average. Costs depend on the home's size, climate, interior heating preferences, heating system efficiency, and current oil prices. Oil costs $2.30 to $3.00+ per gallon, and tanks hold 300 to 500 gallons.
| Home size (square feet) | Annual cost to run |
|---|---|
| 1,300 – 1,600 | $1,000 – $1,300 |
| 1,600 – 1,900 | $1,300 – $1,500 |
| 1,900 – 2,200 | $1,500 – $1,750 |
| 2,200 – 2,600 | $1,750 – $2,100 |
| 2,600 – 3,200 | $2,100 – $2,500 |
*Prices of on-demand oil deliveries only. Fees of oil sellers vary by location.
- Oil companies fill the oil tanks on-demand or by auto-delivery.
- Oil furnaces use minimal electricity, so heating oil is the main cost.
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Oil-burning furnace pros and cons
| Pros | Cons |
|---|---|
|
|
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What size oil furnace do I need?
More than 80% of oil furnaces are in the Northeastern U.S. and use 45 to 60 BTUs per square foot. Homes 1,600 to 2,600 square feet need an oil furnace with 72,000 to 150,000 BTUs of heating capacity. The ideal oil furnace size depends on the home's square footage, outdoor temperatures, and insulation.
| Home size (square feet) | Size required (BTUs) |
|---|---|
| 1,300 – 1,600 | 60,000 – 95,000 |
| 1,600 – 1,900 | 72,000 – 115,000 |
| 1,900 – 2,200 | 85,000 – 130,000 |
| 2,200 – 2,600 | 100,000 – 150,000 |
| 2,600 – 3,200 | 115,000 – 190,000 |
*Based on 45 to 60 BTUs of heating power per square foot. Contractors use the Manual J load calculation to size the furnace for maximum efficiency.
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What is an oil furnace?
An oil furnace is a home heating system that converts oil to heat. Oil furnaces are common in colder climates like the Northeastern United States.
How long does an oil furnace last?
Oil furnaces last 15 to 25 years, depending on the usage, brand, installation, and repairs. Some oil furnaces last more than 30 years if properly sized, installed correctly, and serviced annually. Consider replacing an oil furnace more than 15+ years old that requires frequent repairs.
To extend the life of an oil furnace:
- Clean the air and oil-line filters monthly during the fall and winter.
- Hire HVAC specialists to clean the air ducts and seal leaks every other year.
- Add a programmable thermostat to avoid overworking the unit.
- Don't use low-grade heating oils that cause toxic system buildups.
- Turn off the furnace, and then vacuum around it and inside the burner annually.
When should you replace an oil furnace?
Consider replacing an oil furnace more than 15+ years old that requires frequent repairs. The older the oil furnace, the less effective they become. Schedule a professional inspection when noticing any of the following warning signs:
| Replace an oil furnace when: | Replace an oil-storage tank when: |
|---|---|
|
|
Oil furnace replacements, installs, and repairs are not DIY projects for homeowners due to building codes fire hazards.
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Hiring an oil furnace installer
Licensed HVAC professionals know how to correctly calculate a home's heating needs and select the correct oil furnace size. Before hiring a contractor, use this checklist when requesting estimates:
- Check that the HVAC installers have certifications from a North American Technician Excellence (NATE) organization like the American Society of Heating, Refrigeration, and Air-Conditioning Engineers (ASHRAE).
- Compare furnace replacement quotes from at least three different companies.
- Remember the lowest bids typically signal low-quality work.
- Choose licensed, insured, and bonded HVAC contractors with years of experience installing oil furnaces in your area.
- Get copies of project estimates, heating-load calculations, orders, permits, contracts, and warranties.
- Check estimates for all material, labor, and equipment costs as well as the installation schedule.
- Review the seller's ratings on HomeGuide, Google, and the Better Business Bureau (BBB).
- Ask all questions about total project costs before signing any contracts.
- Create a payment schedule instead of making a full payment beforehand.
Questions to ask
- How many furnaces have you installed, and which type do you specialize in?
- Can I see references from your previous oil furnace installs?
- Are all your labor and materials fees in this estimate? What other costs typically apply?
- Do you provide discounted repairs and annual inspections for this oil furnace?
- Considering my average heat use, how often will I need oil tank refills?
- Do you offer an auto-fill service for my oil tank to monitor my supply for me?
- If my oil-storage tank also needs replacing, how much more will that cost?
- Will this new furnace work with my existing ductwork and thermostat controls?
- Does the line from my oil-storage tank to the furnace need replacing?
- Do I need wiring upgrades to power the furnace motor and ignition?
- Will you size the furnace with Manual J load calculations?
- Do you offer a home energy audit to suggest more energy-efficiency upgrades?
- How long should the job take?
- Does the estimate include removing all debris afterwards?
- Which oil-furnace accessories would help lower my energy costs?
- Does this furnace installation meet all local building codes?
- Will I need a backup heater for this furnace system?
- If additional ductwork is necessary, will you supervise that as well?
- Will you pull all permits for this project and manage inspections?
- What's in your warranty policy?
- What is the payment schedule for this project?
- What types of financing options do you offer?
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