Heat pump vs. oil heat

When the answer flips

This is the comparison most of the Northeast is arguing about, and the honest answer is that it depends on three numbers you can see above: your electricity rate, your oil price, and the seasonal efficiency of the heat pump. At a typical 23¢ per kilowatt-hour and $3.70 oil, a cold-climate heat pump averaging 2.5 units of heat per unit of electricity delivers a million BTU for about $27; an 83% oil boiler delivers it for about $32. The heat pump wins by 15% or so.

The answer flips when electricity is expensive relative to oil. Above roughly 30¢ per kilowatt-hour, or below about $3.00 oil, the oil boiler is cheaper to run on fuel alone. It also flips on the coldest nights: at 0°F a cold-climate unit may only manage 1.5 to 1.8 units of heat per unit of electricity, and for that night oil is cheaper. That is why most installers in oil country leave the boiler in place as backup and let the heat pump carry the shoulder seasons and ordinary winter days, which is where 80% of the heating season's BTUs actually get used.

What the fuel comparison leaves out: the heat pump also gives you air conditioning, which matters more every summer; the oil boiler needs an annual cleaning and a tank that will eventually need replacing; and the installed cost of a whole-house cold-climate system runs well into five figures before rebates. If the fuel gap above is $800 a year, a $14,000 installation is a 17-year payback on fuel alone, and the rebates in your state are what decide whether that makes sense.

Full method and sources on the methodology page. Compare every fuel at once in the main calculator.