How Much Does It Cost To Install An Oil Furnance?


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Oil Furnace Installation Costs

Indoor Cost Guides      Air-Conditioning & Heating (HVAC)      Oil Furnace Installation Costs

Although the world is shifting away from fossil fuels, many people still live in areas where winter heating is a real issue, and where oil furnaces are still one of the most reliable ways to keep comfortable. It is a good investment for a new homeowner as much as it is for the long-time resident, and modern furnaces are some of the most efficient ever. They are also less expensive than natural gas and electric options; they still do a great job at heating a home.

Choosing the right model for an oil furnace installation is the key to success, though ensuring a home is adequately insulated and fitted with well-sealed doors and windows are just as relevant. You will want to work with HVAC and furnace experts to choose the proper model for your home.

Of course, all furnaces have variable levels of efficiency, and you will want to do a lot of side by side comparisons in regards to efficiency, brands, heat output, accessories, and more. Also, be aware of the AFUE or annual fuel utilization efficiency of the model you choose.

Item Cost
Removal and disposal of old equipment $500-$1,000
Furnace $500-$4,000
Labor (NOTE: This figure goes up if the heating system requires adjustment OR if switching from propane or gas to the oil furnace option) $1,500
Tank Installation $800-$3,800
Total Costs $3,300-$10,300

Other considerations and costs

  • Keep in mind that maintaining an oil-burning furnace is essential to its long life and efficiency. Because it costs three times as much to burn oil than it does natural gas, a regular regimen of maintenance must be done.
  • Furnace replacement often means obtaining proper permission and permits, and your contractor should be responsible for submitting forms and obtaining permission.
  • If your oil furnace uses an air blowing system, you may want to invest in both humidifier options as well as a HEPA air filter for the unit. These bump up the price by an average of $800 but can make the home far more comfortable and the air easier and cleaner to breathe.
  • If the costs of operating the oil furnace are prohibitive to the budget, consider having an adjustable air blower added to the gear. It slows air movement when less heating is required.

Check out our guide if you need a loan for your home improvement project.

DIY considerations

  • By no means is any oil furnace installation a DIY enterprise, and neither is the removal of the old system. The entire process must be done by qualified professionals who understand how to work within the confines of any pre-existing equipment. There will be a need for inspection on the new installation, and it may be a good time also to have things like ductwork inspected or even upgraded.
  • The point to take from this, however, is that the furnace installation is not the time to consider a DIY project. There will be connections to fuel lines, electrical supplies, rebalancing the HVAC system, and other steps that are only for licensed experts. The result is that you get a warmer home and a more efficient heating system.


  • Craftsman Estimator Costbook, complete series year 2019.
  • Latest prices found on Home Depot and other vendor Web sites.
  • Literature review of DIY Web sites.
How much does it cost to install an oil furnance in your city?
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Cost by city

  • New York, NY$10,923
  • Bronx, NY$8,976
  • Brooklyn, NY$7,481
  • Philadelphia, PA$9,333
  • Washington, DC$8,099
  • Atlanta, GA$7,327
  • Miami, FL$6,664
  • Fort Lauderdale, FL$6,981
  • Minneapolis, MN$8,189
  • Chicago, IL$9,541
  • Houston, TX$9,841
  • San Antonio, TX$6,606
  • Austin, TX$7,480
  • Denver, CO$6,320
  • Phoenix, AZ$6,668
  • Las Vegas, NV$7,319
  • Los Angeles, CA$8,246
  • San Diego, CA$7,483
  • San Jose, CA$9,039
  • Seattle, WA$6,617

Local costs have been calculated by accounting for labor and material cost differences across different cities. To get accurate cost estimates, indicate yours: