Is it worth switching from oil to electric? Here's a chart to show monthly breakdown of utility bills.
The trend is clear with today’s homebuyers - most are not in favor of a house heated by oil.
And by “most”, I meant 90%. Other 10% is ambivalent.
Literally no buyer tells me “I’m looking for a house heated by oil”. I do however, have buyers telling me that “I don’t wish to buy a house heated by oil”.
Gas is by far the most popular choice; solar panels are ok (depends if owned or leased) and heat pumps are only starting to catch on.
If you’re not familiar with how a heat pump works, the quick summary is that it moves air, and in doing so provides for heat and air conditioning. Appearance-wise, it’s hard to tell the difference between an oil furnace, gas furnace and heat pump.
All equally undifferentiated and unsexy:
Left to right: Oil furnace, heat pump, gas furnace
I honestly believe that the reason why heat pumps aren’t trumping traditional gas furnaces in popularity is because builders and installers aren’t even aware about them. Heat pumps therefore don’t get put in homes; they don’t get exposed to the masses. Have you read my post about converting my oil furnace into a heat pump and how difficult it was to find an installer? 😏
My husband and I bought our house in Aug 2021, removed our oil tank in April 2022 and installed our heat pump in Sept 2022.
Now over a year later, I have a verdict: It’s absolutely worth it.
I’ll cut to the chase and show you a visual of my utilities before and after heat pump installation:
Now, I’ll quantify this worth and show you the math.
Utility costs Prior to Heat Pump Installation (Sept 2021 - Aug 2022)
Cost of oil for 1 winter
When we bought our house in Aug 2021, the tank had been filled with 200 gallons of oil. It was then valued at $2.74/gallon. FYI, the week’s average price as aggregated by Massachusetts Department of Energy Resources stands at $4.04 today, a whooping 47% increase.
By January 2023, we ordered a tank refill of 250 gallons, then $3/gallon, and finished the oil by the time we had the tank removed in April 2022.
Total cost of oil over 7 months: $2.74 X 200 + $3 X 250 = $1,298.00
Monthly average: $185.43
Cost of electricity for regular home use, no AC
Nothing special to report here since my house did not have AC prior to having the heat pump installed. I did remember blasting a standing fan during the insufferable summer.
Total cost of electricity over 12 months: $811.59
Monthly average: $67.63
Utility grand total oil + electricity
Grand total over 12 months: $2,109.60
Monthly average: $175.80
Utility costs after Heat Pump Installation (Sept 2022 - Aug 2023)
Cost of electricity for regular home use, heat and AC
Total cost of electricity over 12 months: $1,594.87
Monthly average: $132.91
Switching from oil to Electric was a 25% cost reduction and more!
It’s a no brainer. My monthly utility bill decreased from $175.80 to $131.91- a 25% cost reduction, and that’s not counting the fact that I’d used oil prices from back in Aug 2021.
We now have central AC. Honestly, I would be ok with a wash in costs but added AC as a home amenity because not baking in heat is in itself a 25% improvement to my quality of life.
Adding value to home. Hard to quantify the value of AC in a house because it’s increasingly a binary decision: buyers simply don’t wish to make a purchase if the house doesn’t have central AC.
Being more environmentally friendly. Priceless.