Heat pump vs oil boiler: what the running cost comparison shows

The short answer

A heat pump delivers heat more cheaply than an 83% AFUE oil system in 44 of 51 states, with 6 too close to call and 1 where oil wins.

At a national reference price of $3.90 per gallon, oil delivers heat at roughly $0.1158 per kilowatt hour after boiler losses. That puts it in the same expensive band as propane, well above natural gas.

How the comparison actually works

Every heating system is a machine for turning purchased energy into heat in your house. The only question that matters for running cost is how many dollars it takes to put one kilowatt hour of heat into the room.

A combustion appliance burns fuel and loses some of it up the flue. Its AFUE rating is the share that reaches the house, so an appliance rated 95% delivers 95 cents of heat for every dollar of fuel. It can never exceed 100%.

A heat pump does not make heat. It moves heat that already exists in the outdoor air into the house, and the electricity it consumes runs the compressor doing the moving. Because it is moving rather than making, it can deliver three or four units of heat per unit of electricity. That ratio is the coefficient of performance.

Nothing else enters the arithmetic. Not the size of the house, not the length of the winter, not the national average. Those change how much heat you need, and they cancel out of the comparison because both machines have to deliver the same amount.

This site rates the heat pump at HSPF2 11.0, a good cold climate unit, and then knocks it down for backup heat. HSPF2 divided by 3.41214 gives a raw COP of 3.22. Assuming 10% of the season's heat comes from electric resistance strips running at COP 1.0 brings the effective figure to 2.64. That is the number used on every page here.

What it costs per unit of heat in every state

EIA publishes residential heating oil by PADD region, and only for the East Coast and Midwest, which is where oil heat actually exists. States outside those regions fall back to the national figure and that is noted on their state page. Replace it with what your supplier charges.

Electricity is the 2025-12, 2026-01, 2026-02 heating season mean from EIA. Heating oil at the EIA heating season mean for each state's PADD region, 138,500 BTU per gallon, through an 83% AFUE boiler or furnace.

Why the efficiency rating matters more for oil than anything else

Oil has the highest energy density of any common residential heating fuel. A gallon carries 138,500 BTU, roughly 50% more than a gallon of propane. That should make it competitive.

Two things take that advantage away. The first is price per unit of energy, which sits well above natural gas. The second is the age of the installed base.

An 83% AFUE rating describes equipment in good condition. A great deal of installed oil equipment is decades old, and a boiler that has drifted to 70% effective efficiency through fouling, oversizing, and short cycling delivers heat at roughly a fifth more cost than its plate rating suggests. Oversizing is particularly common in oil systems, because replacement boilers were historically specified from the old unit's rating rather than from a load calculation.

If your boiler has not had a combustion efficiency test recently, the honest version of this comparison is probably worse for the oil system than the table shows.

What would change this answer

Three inputs move this comparison, and only one of them is on the equipment label.

• Your actual fuel price. Heating oil is a commodity with a volatile retail price, and pre-buy contracts, delivery minimums, and regional supply all move it. A dollar per gallon of movement over a winter is not unusual and is worth more than any equipment specification on this page.
• Backup heat. Resistance strips run at COP 1.0. Fifteen percent of the season's heat from the strips costs 27% of your effective efficiency, which is enough to change the verdict in a marginal state. See the field note.
• The heat pump itself. A builder grade unit at HSPF2 8.0 has a COP of 2.34 against 3.22 for a cold climate machine, moving the breakeven from 3.18 to 2.49.

How this was checked

Fuel prices are pulled from the EIA public API and averaged over the most recent complete December to February window, using identical months for every state. Summer months are excluded deliberately. EIA's residential price is total revenue divided by total volume, and in summer the fixed monthly customer charge is divided by almost no gas, which inflates the apparent price by up to 114%. That error is documented in the corrections log.

The same rate file drives the calculator, every state page, and every table on this page, so the tool and the writing cannot disagree. Unit conversions were derived twice, once in dollars per unit of chemical energy and once in dollars per delivered BTU, and both give the same threshold.

No verdict is declared inside a 10% margin, because fuel prices move more than that between seasons.

What this page does not cover

Running cost only. This page says nothing about what the equipment costs to buy or install, what rebates or tax credits are available, what financing costs, or what either system does to your emissions.

It also ignores the largest single item in the capital comparison: a heat pump is also an air conditioner. If you would otherwise be buying a furnace and an air conditioner, you are buying one machine instead of two, and that can outweigh several years of running cost difference.

State averages hide real variation between utilities inside a state. If you have your own bills, put your own numbers into the calculator rather than trusting a state mean.

References

1. U.S. Energy Information Administration, Electricity Data Browser, residential retail price by state.
2. U.S. Energy Information Administration, Weekly Heating Oil and Propane Prices.
3. AHRI Standard 210/240-2023, Performance Rating of Unitary Air-Conditioning and Air-Source Heat Pump Equipment.