Is a Natural Gas Furnace Cheaper Than an Oil Gas Furnace?

Natural Gas Furnace Prices

• Natural gas furnaces typically cost more than electric furnaces, but less than oil-fueled furnaces. Prices are based on the British Thermal Unit (BTU) capacity and the Annual Fuel Utilization Efficiency (AFUE) rating for the furnace. The higher the BTU capacity and the higher the AFUE rating, the higher the price of the furnace. Prices for natural gas furnaces start around $1,500, as of August 2011.

Oil-Fueled Furnaces

• Oil furnaces cost about 20 percent more than natural gas furnaces. However, while natural gas furnaces must meet a minimum 78 AFUE rating, the Federal Trade Commission requires oil-fueled furnaces to have a minimum AFUE of 82. Like natural gas furnaces, the higher the AFUE of an oil furnace, the higher the efficiency. Prices for oil-fueled furnaces are also based on their BTU capacity. An oil furnace with an 82 AFUE starts at around $2,000, as of August 2011.

Natural Gas and Heating Oil Costs

• Prices for natural gas are calculated on a per therm basis. Prices for natural gas vary by city, state, region and among companies who resell natural gas for residential heating. Natural gas is also a commodity fuel and prices fluctuate based on availability and seasonality. It is common for the price per therm to be lower during the summer when usage is low and higher during the winter. Heating oil prices are calculated on a per gallon basis. Like natural gas, fuel oil prices vary, and fuel oil is also a commodity, so there will be fluctuations in prices based on market prices, availability and seasonality.

Compare Costs for Heating Your Home

• To calculate how much it would cost to heat your home with natural gas, calculate the total cubic feet in your home (length multiplied by width, multiplied by ceiling height). Then multiply the cubic feet by 1,047 (the number of BTUs of natural gas per cubic foot) to find out how many BTUs of natural gas your home requires for heating for a year. For example, a home with 16,000 cubic feet would require 16.752-million BTUs of natural gas. If the cost per therm were 65 cents, it would cost about $1,089 dollars annually to heat the home. If the home were heated with oil, it would take about 121 gallons of oil to generate 16.7-million BTUs. And, if the cost per gallon of oil were $4.00, the cost for heating the home with fuel oil would be $484.00 annually, which is less than half of the cost of natural gas. Find out rates for natural gas and heating oil in your area to calculate and compare costs for heating your home.