Oil vs gas vs heat pump: what heating actually costs here
The City of Seattle calls oil the most expensive form of home heating here — conversions save 50%+ on annual heating costs by the city's own figures. Gas sits in the middle with UTC-approved increases stacking (~9.4% in 2025). Heat pumps hold the efficiency column: ~40–60% savings off oil or electric resistance, break-even-to-moderate off newer gas, plus cooling, plus the only rebate eligibility of the three.
| Dimension | Oil furnace | Gas furnace | Heat pump |
|---|---|---|---|
| Cost position (Seattle) | Highest — city's own assessment | Middle, rising (CCA compliance) | Lowest electric option; rate-exposed |
| Savings switching to heat pump | ~40–60% of heating spend (City/DOE) | Break-even to ~30% (rate-dependent, honest answer) | — |
| Price volatility | Global oil markets, delivery pricing | UTC rate cases (+9.4% 2025) | SCL +5.4%/yr 2025–26; PSE ~12%/yr |
| Conversion rebates available | Clean Heat $2,000–$6,000 (Seattle) | PSE gas-conv. $3,000–$4,000 | SCL $300–$600 on replacements |
| Other liabilities | Tank decommissioning eventually | — | Panel capacity in older homes |
| Cooling included | No | No | Yes |
Oil furnace
If you heat with oil…
You have the market's strongest conversion case: the highest-cost fuel out, 50%+ savings in, and $2,000–$6,000 of Clean Heat money with a published bonus deadline. Keep the burner maintained meanwhile (we still service oil) — but make the decision on a calendar, not a breakdown. Tank decommissioning belongs in scope for Clean Heat eligibility, and nearly all remaining oil homes in Seattle are pre-war stock where ductless multi-zone is the standard distribution answer.
Gas furnace
If you heat with gas…
No urgency, honest math: a newer condensing furnace runs efficiently at rates that remain moderate. The trend line (CCA-driven increases) and the missing cooling are the pressure points; PSE's $3,000–$4,000 conversion rebate — its largest — is the standing invitation whenever replacement time arrives. Dual-fuel preserves gas backup while capturing most-season efficiency — the hybrid path when the furnace is too young to scrap but electrification is the direction.
Heat pump
If you're on the heat pump already…
Guard the efficiency: rate increases hit inefficient operation hardest, so backup-heat configuration and twice-yearly maintenance are where your money lives. Replacement time re-enters the rebate window at the current HSPF2 tiers. Watch for aux-heat indicators running in mild weather — that's a settings or sizing issue eating the savings the equipment was bought to deliver.
Questions homeowners ask about this choice
These savings ranges are wide. Why not exact numbers?
Because exact numbers require YOUR usage, envelope, and rates — anything more precise on a webpage would be theater. Our energy-savings explorer applies the sourced factor ranges to your stated spend with the assumptions printed next to the result; the estimate visit refines it from real bills.
Gas is +9.4%, electric is +5.4–12% — doesn't that cancel the heat pump math?
Rates rise on both fuels; efficiency is the separator. A heat pump delivers 2–4 units of heat per unit of electricity, so each rate increase hits it at a half to a quarter of resistance heat's exposure — and the oil column has no efficiency escape at all. The honest gas-vs-heat-pump answer stays 'model your rates,' which we do.
Is there any case for staying on oil?
Short ownership horizons and a young, healthy burner are the defensible ones. Past that, you're paying the market's highest heating rate to defer a rebate with a deadline — a real decision, but make it with the numbers in front of you.
How do I model my own numbers?
Start with your actual annual heating spend from utility bills, then apply the sourced factor ranges: ~40–60% reduction off oil or electric resistance, break-even to ~30% off newer gas. Our energy-savings explorer prints the assumptions next to the result; the estimate visit refines it with your envelope and equipment specifics. Anything more precise on a webpage would be theater.
Go deeper
Oil-to-heat-pump: the full decision
Related
Gas vs electric furnace
Related
SCL vs PSE rebates
Take action
Model your savings
How we know this
Cost positions and savings ranges per City of Seattle Clean Heat materials, U.S. DOE, and WA UTC rate orders as compiled in our sourced energy data (verified July 2026). Ranges, not promises — assumptions print with every estimate.
Reviewed by the Glendale Heating & Air Conditioning team · Last updated 2026-07-15
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