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Fuel Oil To Gas Conversion Payback Calculator
Converting from oil to natural gas typically saves 30–50% on heating fuel costs.
Simple payback (yrs)
2.4
Annual savings
$30,480
Net capex
$73,000
How the math works
Oil = gallons × $/gal. Gas = therms × $/therm. Savings = oil − gas. Payback = (capex − incentive) / savings.
12,000 × $4.5 = $54k − 16,800 × $1.4 = $23.5k = $30.5k savings. ($85k − $12k) / $30.5k = 2.39 yr.
How to Use
- Enter annual gallons #2 oil.
- Enter oil $/gallon.
- Enter equivalent therms gas.
- Enter gas $/therm.
- Enter conversion capex.
- Enter incentive.
- Read payback period.
Frequently Asked Questions
Conversion economics?
Oil $4-7/gal = $28-50/MMBTU. Gas $1-2/therm = $10-20/MMBTU. Spread: 50-75% gas advantage in most markets. Northeast US: highest oil prices, biggest savings. Mid-Atlantic, Midwest: moderate savings. Some markets (rural NE): no gas line nearby = oil only or propane. Conversion typical: 30-50% fuel cost reduction.
Conversion cost?
Burner conversion only (existing boiler): $3-8k. Boiler replacement + gas line: $25-100k commercial. Gas service connection from street: $5-50k (utility partial cost). Underground tank removal + soil remediation: $5-50k (varies w/ contamination). Chimney lining for gas: $3-15k. Total: $25-200k for typical commercial conversion.
Operational benefits?
No oil delivery scheduling. No tank monitoring. No spill risk + insurance liability. Cleaner burning (lower emissions). Modulating gas burners more efficient than oil. Gas can fuel: domestic hot water, cooking, dryers, fireplaces. Long-term gas commodity outlook: expected stable to favorable vs oil.
Considerations?
Gas line proximity required (utility service feasibility study). Building electrification trends: gas may be banned in new construction (NYC, Berkeley, Seattle). For existing: convert now, plan electrification 2030-2040. Carbon footprint: oil 1.0 to gas 0.6 emissions. ESG benefit. Building decarbonization mandates (NYC LL97): gas conversion may not satisfy long-term.
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