Heating Oil vs. Propane vs. Heat Pumps – what’s right for you? In the heart of New England, where winters are long and temperatures regularly dip below freezing, choosing the right heating system is more than a comfort issue—it’s a necessity. With rising energy costs, environmental considerations, and the increasing availability of new technology, homeowners often find themselves weighing the pros and cons of heating oil, propane, and heat pumps.
At Yankee Oil, we understand how important it is to choose the best system for your home, budget, and lifestyle. In this blog, we’ll break down the differences between heating oil, propane, and heat pumps in terms of efficiency, reliability, cost, environmental impact, and long-term value, so you can make the most informed decision for your New England home.
Understanding the Basics
Heating Oil
Heating oil is a tried-and-true method of heating homes throughout the Northeast. It’s delivered to your home and stored in a tank—either indoors or outdoors—and used in an oil-fired furnace or boiler to heat air or water.
Pros:
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Generates more heat per gallon than propane or natural gas
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Ideal for very cold climates due to high heat output
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Long equipment lifespan with proper maintenance
Cons:
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Requires regular fuel delivery and storage tank
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Higher carbon emissions than heat pumps or propane
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Oil prices can be volatile
Propane
Propane is a versatile fuel stored in pressurized tanks and used not only for heating but also for cooking, water heating, and backup power. It’s a byproduct of natural gas processing and petroleum refining.
Pros:
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Burns cleaner than heating oil
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Works well with high-efficiency systems
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Can fuel multiple appliances
Cons:
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Less energy per gallon than oil
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Requires tank storage and delivery
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Prone to price fluctuations
Heat Pumps
Heat pumps use electricity to move heat into (or out of) your home. In the winter, they extract heat from outside air (even when it’s cold) and move it indoors.
Pros:
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Highly energy-efficient
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Can both heat and cool your home
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No on-site fuel storage required
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Lower emissions, especially with green electricity
Cons:
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Can struggle in extreme cold without backup heat
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Higher upfront cost
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May increase electric usage significantly
Heating Efficiency: Which Fuel Wins?
Heating Oil Efficiency
Modern oil-burning systems are far more efficient than those of the past. Systems today can achieve efficiencies of 85-95%, particularly with condensing boilers and modern burners.
However, because oil burns at a high temperature, it heats up space quickly—especially helpful during extreme New England cold snaps.
Propane Efficiency
Propane heating systems typically range from 85% to 98% efficiency, depending on the equipment. High-efficiency propane furnaces are readily available and have lower emissions than oil-fired systems.
Heat Pump Efficiency
Heat pumps are rated using COP (Coefficient of Performance) and HSPF (Heating Seasonal Performance Factor). A high-efficiency cold climate heat pump can deliver 300% efficiency or more, meaning it produces 3 units of heat for every unit of electricity consumed.
However, their efficiency can drop in sub-zero temperatures, often requiring backup heating—typically electric resistance or propane/oil systems.
Winner: Heat Pumps (on efficiency alone)
But in colder parts of New England, hybrid systems (heat pump + oil or propane backup) often perform best.
Reliability in New England Winters
Heating Oil
Oil systems are extremely reliable in sub-zero temperatures. There’s no dependence on utility lines or electricity to generate heat (though many systems do need electricity to operate the burner or fan).
Pro Tip: Keep your tank full in winter to avoid fuel waxing or gelling.
Propane
Propane systems are also reliable in the cold, but tanks must be maintained properly. If your tank runs dry, you’ll need a professional to re-inspect the system.
Heat Pumps
While heat pump technology has advanced—especially with cold-climate models—they can still underperform when temperatures dip below 10–15°F unless paired with a backup heating source.
Winner: Heating Oil (for extreme cold)
Though propane is a close second, heating oil’s high BTU output per gallon gives it the edge in deep winter.
Installation and Equipment Cost
Heating Oil
Installing or replacing an oil-fired system ranges in cost depending on the tank, furnace/boiler, and whether it’s a forced air or hydronic system.
Oil tanks alone can be significant depending on size and location (indoor or outdoor).
Propane
Installation costs for a propane furnace are similar to oil, but tanks are usually leased from the supplier, reducing initial out-of-pocket costs.
Heat Pumps
Heat pumps have a higher upfront cost for a whole-home system. However, incentives, when available, can significantly lower this price.
Ductless mini-splits can serve individual rooms and start at a lower price per unit.
Winner: Propane (lower installation + tank leasing)
But heat pump rebates make them more affordable long term.
Operating Costs and Fuel Prices
Winner: Heat Pump (with caveats)
Electricity costs are generally lower per BTU, but if electric rates spike or your heat pump underperforms in winter, costs can creep up.
Environmental Impact
Heating Oil
Traditional No. 2 fuel oil has a higher carbon footprint than propane or electricity. However, bioheat blends (heating oil mixed with biodiesel) are becoming more common and can reduce emissions by up to 80% with 100% biodiesel blends.
Propane
Propane is cleaner-burning than oil but is still a fossil fuel. It emits less CO₂ per BTU than oil but more than electricity (depending on source).
Heat Pumps
Heat pumps are the greenest option, especially when powered by renewable electricity (solar, wind, hydro). Their carbon footprint is much lower and continues to drop as the grid decarbonizes.
Winner: Heat Pumps
7. Versatility and Add-ons
Heating Oil
Primarily used for space heating and water heating. Not commonly used for other appliances.
Propane
Extremely versatile—can also power:
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Stoves
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Clothes dryers
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Fireplaces
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Pool heaters
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Generators
Heat Pumps
Dual-purpose: heating and cooling. Newer models even offer dehumidification and air purification features.
Winner: Propane for versatility
Heat pumps for HVAC flexibility
Maintenance Requirements
| System Type | Maintenance Frequency | |
|---|---|---|
| Heating Oil | Annual tune-up needed | |
| Propane | Annual checkup | |
| Heat Pump | 1–2x per year filter & coil cleanings |
Regular maintenance is essential for efficiency, safety, and warranty protection.
Lifespan and Long-Term Value
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Heating oil systems: 20–30 years with good maintenance
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Propane systems: 15–20 years
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Heat pumps: 10–20 years depending on climate and usage
While oil furnaces last the longest, heat pumps offer cooling, lower energy bills, and potential tax credits that improve ROI.
What’s Best for Your Home?
Choosing between heating oil, propane, and heat pumps isn’t one-size-fits-all. Consider the following:
| Factor | Best Option |
|---|---|
| Coldest Climates | Heating Oil or Propane |
| Greenest Choice | Heat Pump |
| Upfront Budget | Propane (with leased tank) |
| Fuel Versatility | Propane |
| Long-Term Savings | Heat Pump with Rebates |
| Backup Reliability | Heating Oil |
Hybrid Systems: The Best of Both Worlds?
Many New England homes benefit from a dual-fuel approach, such as:
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Heat Pump + Oil Furnace
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Propane Furnace + Mini-Split Heat Pump
These setups combine efficiency in moderate temperatures with powerful backup for deep cold.
Final Thoughts
There’s no single answer to what’s “best”—only what’s best for you.
At Yankee Oil, we provide expert guidance, equipment installation, and fuel delivery tailored to your specific needs. Whether you’re looking to upgrade your current oil system, add ductless heat pumps, or explore switching to propane, our team is here to help.
✅ Ready to Explore Your Options?
Call Yankee Oil at 860-423-9111 or contact us online for a free consultation and energy assessment. We proudly serve homes throughout Connecticut and greater New England.
