Oil furnace vs heat pump cost this winter: with residential heating oil at $5.93 to $6.41 a gallon in early November, our estimate shows a cold-climate heat pump heating a typical oil home for about $620 to $1,360 less per season, depending on the state. The catch is the install bill. Against a working oil system, it takes roughly 15 to 28 years to pay back.
Maine's statewide heating oil average set a record of $6.05 a gallon in the state survey dated Oct. 26, according to Energy News Beat's reading of the Maine Department of Energy Resources survey. By Monday, Nov. 2, it had eased only to $6.01, WABI reported. Kerosene averaged $7.01 and propane $3.66. A year earlier, the same survey had oil at $3.32.
The state estimates that filling a standard 275-gallon tank costs about $750 more than it did last year. WABI's Oct. 22 report put oil up 83% year over year. That $750 assumes an empty tank, and the survey tracks cash prices, not pre-buy or contract rates, so your own number may differ.
Maine isn't alone. EIA's weekly survey for Nov. 2 shows residential heating oil between $5.93 (Pennsylvania) and $6.41 (Delaware) in every Northeast and Mid-Atlantic state it tracks. EIA's federal figure for Maine, $5.98, runs slightly below the state's own $6.01.
What a season of oil heat costs this winter
In its Winter Fuels Outlook, EIA expects homes that heat with oil to spend 21% more than last winter, with the oil price averaging 34% higher. About 3% of U.S. homes heat mainly with oil, mostly in the Northeast. Homes heated with electricity are expected to see bills rise 4%, according to EIA's Today in Energy.
Quartz, reporting EIA's numbers, put the average oil-heat bill at $2,115 for the season, with oil averaging $5.26 a gallon and consumption down a forecast 9%. That forecast assumes a warmer Northeast winter than last year. If January turns out colder than EIA assumed, you'll burn more gallons.
Divide $2,115 by $5.26 and you get roughly 400 gallons a season. That's our math, not an EIA figure, but it's the baseline we use below.
Oil vs heat pump running costs, state by state
This table is Call The Local's estimate, not a published figure. Our assumptions: 400 gallons of oil a season, an oil furnace or boiler running at 85% efficiency, and a heat pump with a seasonal efficiency (COP) of 2.5, with a more cautious 2.0 shown alongside. Oil prices are EIA's Nov. 2 figures. Electricity prices are EIA's preliminary August 2026 residential averages from Electric Power Monthly. Energy conversions use EIA's Btu factors (138,500 Btu per gallon of heating oil, 3,412 per kWh). Those 400 gallons deliver about 47 million Btu of heat, which takes roughly 5,520 kWh from a heat pump at COP 2.5.
| State | Oil, $/gal (Nov. 2) | Electricity, cents/kWh (Aug. 2026) | Oil, per season | Heat pump at COP 2.5 | Heat pump at COP 2.0 | Savings at COP 2.5 |
|---|---|---|---|---|---|---|
| Maine | $5.98 | 32.11 | $2,394 | $1,772 | $2,216 | ~$620 |
| Massachusetts | $6.18 | 30.48 | $2,470 | $1,683 | $2,103 | ~$790 |
| New York | $6.32 | 28.65 | $2,530 | $1,581 | $1,977 | ~$950 |
| Connecticut | $5.99 | 24.51 | $2,396 | $1,353 | $1,691 | ~$1,040 |
| New Jersey | $6.31 | 24.61 | $2,522 | $1,358 | $1,698 | ~$1,160 |
| Pennsylvania | $5.93 | 21.77 | $2,371 | $1,202 | $1,502 | ~$1,170 |
| Maryland | $6.36 | 21.40 | $2,544 | $1,181 | $1,477 | ~$1,360 |
Oil prices are close together across the region. Electricity prices aren't, and that's what decides who saves the most. Maine paid 32.11 cents per kWh in August and Massachusetts 30.48, the two highest rates on the list. Pennsylvania and Maryland were under 22 cents. Maine's rate also climbed from 28.14 cents a year earlier, while Connecticut's fell from 30.17 to 24.51.
The COP 2.0 column matters most in Maine. At that efficiency the heat pump still wins, but the margin drops to under $200 a season. Keep in mind these are averages for a single summer month. Winter bills and mid-season rate changes can move the math in either direction.
The oil price where a heat pump starts to win
If you only remember one number from this article, make it your state's break-even oil price. Above it, a heat pump costs less to run. Below it, oil does. Using the same assumptions (COP 2.5, 85% oil efficiency, August 2026 electricity rates):
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Maine: about $4.43 a gallon
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Massachusetts: about $4.21
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New York: about $3.95
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New Jersey: about $3.40
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Connecticut: about $3.38
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Pennsylvania: about $3.00
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Maryland: about $2.95
Today's prices clear every one of those numbers with room to spare. A year ago, though, they didn't. At Maine's $3.32 price in the Oct. 27, 2025 survey, 400 gallons cost about $1,330, which beats the roughly $1,550 a heat pump would have cost at Maine's August 2025 electricity rate. If your heat pump only reaches COP 2.0, Maine's break-even rises to about $5.54. The running-cost case in northern New England depends on oil staying expensive. In the Mid-Atlantic, the margin is wide enough to hold up even if oil falls back.
What "cold-climate" means on a spec sheet
ENERGY STAR's Cold Climate designation requires a heat pump to reach a COP of at least 1.75 at 5°F and keep at least 70% of its 47°F heating capacity at 5°F. Split systems also need at least 8.5 HSPF2 and 15.2 SEER2 for ductless models, or 8.1 HSPF2 and 15.2 SEER2 for ducted ones.
Consumer Reports says many cold-climate models "can heat as effectively at a frigid 5° F as they can at a mild 47° F." It also says savings are likely biggest for homes on delivered fuels like oil and propane. One homeowner told CR he saves about $150 a month in the coldest months compared with his oil boiler.
You don't have to rip out the old system on day one. Efficiency Maine's whole-home guidance says the old central system can be "relegated to use as an emergency backup."
Install cost and the rebates that change soon
Consumer Reports, citing Cadmus Group data on 22 homes, found an average installed cost of about $10.36 per square foot, with a range of $3.52 to $16.98. Some Northeast homeowners have paid more than $30,000 for a ducted cold-climate system as their only heat source.
Don't plan on a federal tax credit. The IRS 25C page says the credit covers improvements made through Dec. 31, 2025. The old $2,000-a-year heat pump credit doesn't apply to anything installed this winter, which leaves state and utility programs. Two of them change soon.
Massachusetts. Mass Save pays $2,650 per ton, up to $8,500, for whole-home air-source heat pumps in 2026. For whole-home projects installed on or after Jan. 1, 2027, that drops to $2,350 per ton, capped at $7,500. Partial-home rebates go from $1,125 per ton to $1,000. Tons are the AHRI cooling capacity divided by 12,000 Btu. Households that qualify by income and currently heat with oil, propane or electric resistance can get up to $16,000, or up to no cost through Turnkey Services. Paperwork has to be received by Feb. 28, 2027, and applications since Oct. 1, 2026 must include serial numbers.
Whole-home rebates in Massachusetts come with conditions. The house has to be sufficiently weatherized, you need a signed Whole-Home Heat Pump Verification Form, you have to live there full time in winter, and the heat pump has to be the only heating and cooling source. Partial-home jobs that keep oil in some zones need an integrated control. Mass Save also pays a $500 bonus for systems sized to 90% to 120% of the heating load, plus a $500 weatherization bonus after a Home Energy Assessment.
Maine. Efficiency Maine pays $9,000 (low income), $6,000 (moderate income) or $3,000 (any income) for ducted whole-home systems. Other whole-home setups get $3,000, $2,000 or $1,000 per eligible outdoor unit. There's also a $500 bonus per housing unit for whole-home upgrades completed between March 1 and Dec. 31, 2026, with the claim emailed or postmarked within that window. The rebates are for homes that will use heat pumps as their primary heat, and lifetime limits apply.
Outside Maine and Massachusetts, ask your utility and your installer what's available. Our payback figures for New York, New Jersey, Pennsylvania and Maryland count no rebate at all.
How long the payback really takes
Take a 2,000-square-foot home at CR's $10.36 average: about $20,700 installed. Compare that with keeping a working oil system and using the COP 2.5 savings from the table, and here's how it plays out by our estimate:
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Maine, any-income ducted rebate ($3,000 plus the $500 bonus): about 28 years
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Massachusetts, 3-ton whole-home with $7,950 from Mass Save: about 16 years. After Jan. 1, the same job gets $7,050.
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New York, no rebate counted: about 22 years
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New Jersey and Pennsylvania: about 18 years
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Maryland: about 15 years
Those are long paybacks. They get much shorter in a few common situations. If your oil furnace or boiler is due for replacement anyway, only the extra cost of the heat pump counts against the savings. If the house has no central air, you're getting cooling too. Sealing and insulating first shrinks the heating load. An NREL study published in Joule found that among homes heating with electricity, oil or propane that already have air conditioning, "92% to 100% of homes would see energy bill savings," with median savings of $300 to $650 a year. Lead author Eric Wilson added that "we need work to bring down the cost of installing heat pumps."
Who should call an installer this winter
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Homes with failing or aging oil equipment. You're spending money on heat either way, so the payback math works in your favor.
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Massachusetts homeowners who can get a whole-home system installed before Jan. 1, 2027. On a 3-ton job, waiting costs about $900 in rebate.
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Maine homeowners who can finish a whole-home upgrade by Dec. 31, 2026 and collect the $500 bonus. Installers are busy in November, so call now rather than in mid-December.
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Mid-Atlantic oil homes. Lower electricity rates mean the biggest savings and the most room if oil prices fall.
Some homes should wait or start small. A drafty house should be weatherized first, which also matters for the Mass Save whole-home rebate. In high-rate areas like Maine, a partial-home system that handles most of the load while the oil system stays as backup lowers your risk if oil drops. If your boiler also makes your hot water, ask whether keeping it for that job makes sense. Efficiency Maine's whole-home rules leave room for the old system to stay.
What to ask before you sign
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Is this model ENERGY STAR Cold Climate certified, with a COP of at least 1.75 at 5°F?
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Will you do a heating-load calculation, and what percentage of the load is this system sized to? (Mass Save's sizing bonus needs 90% to 120%.)
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If the oil system stays for some zones, will you install integrated controls?
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Will the invoice list serial numbers and AHRI cooling capacity, so the per-ton rebate math checks out?
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Who files the rebate, and by what date?
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If a zone is fully converted, will removal or disconnection of the old system be documented on the invoice? Mass Save requires it.
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Do I need an electrical panel upgrade, and is that in this price?
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What backup heat do you recommend for the coldest nights?
Run your numbers, then get two bids
Before you call, plug your own fuel use and rates into Efficiency Maine's Compare Home Heating Costs calculator. Its default energy prices were updated Nov. 6, 2026, and it works for anyone, not only Maine residents. Then get at least two whole-home bids that list tonnage, model numbers and rebate assumptions line by line. If one bid assumes a rebate the other doesn't, or sizes the system a ton larger, you'll see it right away.
Related reading
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Should You Pull a Roof Permit Before Florida's Code Changes on New Year's Eve?
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Should You Still Replace the Furnace Before a Warm Winter Forecast?
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Oil at $5.70 a Gallon Changes the Heat Pump Math in the Northeast
Sources
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WABI: Maine heating oil prices drop slightly from record high (Nov. 6, 2026)
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WABI: Maine heating oil price hits record high at $6.04 per gallon (Oct. 22, 2026)
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EIA Today in Energy: Mixed outlook for energy expenditures this winter
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Consumer Reports: Can Heat Pumps Actually Work in Cold Climates?
Note: This article contains AI-assisted content and has been reviewed by our editorial team.
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