Converting from oil to a new source of energy to save money heating your home may make sense, but be prepared to wait years before you see the savings.
Converting from oil to a new source of energy to save money may make sense, but be prepared to wait years before you see the savings.
The volatility of energy markets make it impossible to predict whether any furnace conversion will pay for itself.
“We can’t think of economics in the classic sense because we don’t know what the price will be in the next two or three years,” said Dennis Buffington, professor of Agricultural and Biological Engineering at Penn State University.
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“I like the idea of dual or even triple fuel flexibility. There are so many variables involved that they certainly should consider putting in that extra flexibility.”
Neil Kappen, general manager of Ballard Natural Gas Service, said converting a typical Seattle home from oil to natural gas can cost $6,500 to $9,000, depending on the efficiency of the new furnace.
And that doesn’t include the price of natural gas.
The price of converting to gas typically covers removing and disposing of the old furnace, installing pipes, a thermostat and a chimney liner, duct work and a new gas-burning furnace.
On top of that, you can pay anywhere from several hundred dollars to several thousand to hook up your house to the main gas line in the street. The only way to find out how much is to call the gas company to see if there’s a gas main to connect to and what they’ll charge for the hookup.
Seattle homeowner Deb Crespin said she was looking at the long view when she hired Kappen’s company to replace the 1940s oil furnace in her 1,800-square-foot home with a high-efficiency natural-gas furnace in January.
The move was driven not by rising heating-oil costs, but by her desire for a gas stove, she said. Replacing the furnace at the same time seemed like a good idea, she said.
For her project, three bids for the project all came in around $10,000. She paid less than $500 to Puget Sound Energy to connect to the gas main in front of her house, and rebates from purchasing two energy-efficient gas appliances covered about $700 of the total project cost, she said.
Crespin doesn’t have a full heating season to compare yet, but given her heating bills from earlier this year, she expects to cut her monthly fuel costs by about 40 percent to about $70 to $75 during colder months.
Even with those kinds of monthly savings, it will take years before the system pays for itself.
“We’re looking at living in this house for 10 to 15 years at least,” Crespin said. “We did it not only for our own comfort and efficiency, but also down the road, for whoever is going to live here. I see it as a kind of stewardship.”
Kappen of Ballard Natural Gas said some homeowners may be required to remove their underground oil tanks or fill them with sand or a concrete mix, adding $600 to $1,000 to the total conversion cost. In some cases, homeowners with particularly old furnaces may have to pay for asbestos removal as well.
Another option is to add an electric heat pump to capture heat from the earth or outside air and circulate it through the house. A pump large enough to warm an average Seattle home would cost about $7,000, and if the home is older than 50 or 60 years, there may be additional costs to widen the ducts, said Wayne Knipple, an energy management analyst for Seattle City Light.
Heat pumps require a backup system for especially cold days, so you can keep an oil furnace as a backup, but the savings on monthly heating bills can be substantial, Knipple said. An added benefit: they also can be used for air conditioning.
Another good option for heating rooms smaller than 100 square feet is using space heaters. For the most efficient results, keep the door closed and don’t keep it running nonstop, he said.
It’s possible to convert from oil to electric, but the savings — if any — would be minimal. Knipple said a new electric furnace large enough to heat the average Seattle home would cost about $4,000. Operating it would cost as much or slightly less than oil at current prices, he said.
Still some homeowners are opting to replace their oil heaters with more-efficient models, which vary widely depending on the size and efficiency.
Jerry Hoefer, co-owner of Glendale Heating and Air Conditioning, cautioned people against making any rash choices based on today’s oil prices.
“Nobody really knows what’s going to happen to oil prices,” he said.
“During the oil embargo in the 1970s, people started putting in electric furnaces. Those people ended up spending more money on what they converted to than what they left.”