Oil-to-Propane Conversion Calculator

Compare heating oil and propane on a $/MMBTU basis and estimate the payback period for converting from an oil furnace to a propane furnace.

Inputs

A 2,000–2,500 sqft home in a New England climate typically burns 700–1,000 gallons per year.

Typical installed cost for a propane furnace + 500-gallon leased tank ranges $6k–$12k. Owner-purchased tanks add $1.5k–$3k.

estimated payback

never (oil is cheaper at these prices)

Estimated annual savings (propane vs oil)
-$221 $
Heating oil cost per MMBTU
$32.70 $
Propane cost per MMBTU
$35.04 $
Current oil spend
$3,080 $
Equivalent propane spend
$3,301 $
Equivalent propane gallons/year
1119 gal

Methodology

The fair comparison between propane and heating oil is dollars per million BTU of useful heat delivered — not dollars per gallon. Propane is ~34% less energy-dense than heating oil per gallon, so the gallon-for-gallon price never tells the whole story.

Useful $/MMBTU = (price/gal) ÷ (BTU/gal × seasonal AFUE) × 1,000,000

  1. Heating oil: 3.85 ÷ (138,500 × 0.85) × 1,000,000 = $32.70 per MMBTU.
  2. Propane: 2.95 ÷ (91,500 × 0.92) × 1,000,000 = $35.04 per MMBTU.
  3. Your current oil load (800 gal × 138,500 × 0.85) translates to about 1119 gal/year of propane to deliver the same useful heat.
  4. Annual spend: oil $3,080 vs propane $3,301.
  5. Savings: -$221/year at the prices you entered. Conversion capex of $8,500 divided by annual savings = never (oil is cheaper at these prices).

This is a rough planning estimate. It does not include yearly maintenance, tank-rental fees, removal of the existing oil tank, electrical work, or financing. Talk to a licensed installer for an itemized quote, and use your own delivered prices — fuel pricing is regional and seasonal.

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