Switching from Oil or Propane to Heat Pumps: Huge Savings and Lower Emissions

Heating your home with oil or propane can be expensive, but could a heat pump save you money while also reducing your carbon emissions?

If you’re heating your house with oil or propane, you’re sitting on a bigger opportunity than you might think. 

Switching to a heat pump can reduce your heating and cooling costs while substantially lowering your home’s carbon emissions. But exactly how much you’ll save depends on where you live, what you currently pay for fuel and electricity, how your home is heated, and which heat pump system you install.

That’s why we built a free heat pump savings calculator that lets you run the numbers for your own situation. 

Before you plug in your numbers, though, it helps to understand the three main options. 

Three Ways to Heat and Cool Without Fossil Fuel

If you currently heat with oil or propane, there are three heat pump configurations worth considering: air-source, cold-climate air-source, and ground-source heat pumps. 

Air-source heat pumps look a lot like a standard air conditioner. Because that’s basically what they are. The difference is a reversing valve that lets the unit flip directions: it cools your house in the summer like your AC does, then reverses to pull heat in during the winter. It uses outside air as its heat source and, in summer, as the place it dumps heat. 

The limitation is that conventional air-source heat pumps become less efficient as outdoor temperatures fall. Depending on the system and climate, a home may therefore need supplemental heat during the coldest periods. That backup could be your existing oil or propane furnace or electric resistance heat. 

Cold-climate air-source heat pumps solve that problem. They cost more upfront, but they’re more efficient and can keep heating your house down to 15 degrees below zero. You typically won’t need a fossil-fuel backup at all, though installers usually still add resistive heat as an emergency fallback in case the unit ever fails.

For homeowners in colder regions who want to move away from fossil fuels entirely, this is often an important option to model.

Ground-source heat pumps work differently. They look similar to a standard system but add a closed loop of liquid piping buried in the ground, sometimes as deep as 400 feet. 

The advantage is that ground temperatures are much more stable than outdoor air temperatures. In winter, the system can extract heat from relatively stable ground temperatures. In summer, it can reject heat into the ground rather than dumping it into hot outdoor air. 

The catch is installation cost. Drilling or excavating for the ground loop can make a geothermal system significantly more expensive to install. 

The question isn’t simply: Which heat pump is most efficient? It’s: Which system makes the most financial and environmental sense for your house?

Why We Built a Calculator

When I went looking for tools to compare for my own house, I got frustrated fast. Heat pump manufacturers had models. Some utilities had models. But most of what I found was directional, with no real numbers behind it and almost nothing on emissions. 

So we built our own, working with an MIT-trained mechanical engineer with a background in GE power. You can plug in your city, your local weather data, and different heat pump configurations, and see exactly how cost and emissions shift depending on what you choose. 

If you want it dialed in to your specific house, you can book a call, and we’ll run the model with your HVAC installer’s quotes. But we also built a simplified DIY version that assumes a typical 3,000-square-foot house with decent modern insulation, an existing oil or propane furnace, and a separate air conditioning system. 

Running the Numbers

The tool walks you through a few quick inputs–your electricity price, whether you’re currently on oil or propane, your climate zone, and your electricity source–then compares a standard heat pump, a cold-climate heat pump, a heat pump with resistive backup, and a geothermal system against your current setup. 

Running the numbers for a typical Mid-Atlantic house, the results are hard to ignore. Every heat pump option pays for itself fast, with the air-source systems delivering 20-40% returns. Genuine no-brainers. Geothermal costs more upfront but produces the biggest long-term savings and biggest emissions cut, with payback in the 7-8% range, on par with long-run stock market returns. Even the most modest option cuts emissions by close to 30%, and the picture holds up almost identically whether you’re currently running oil or propane. 

Where to Go From Here

Every house is different. Some aren’t ducted the way this model assumes. You might have a radiator system, or a separate standalone AC unit, so your actual installation cost may shift. But the underlying math holds up across configurations. 

If this has you thinking twice about your current system, here’s what I’d suggest: get quotes from a couple of HVAC installers, then bring those numbers back to us. We’ll run your full model, one build for your specific house, climate zone, and equipment options. It’ll show precisely what you’ll save. We’re happy to get your installer on the call, too.