Heating oil reached nearly $6 a gallon last year in parts of the country — the highest in more than a decade. While prices are dropping – currently averaging $4.50 in the U.S -- homeowners reeling from last year’s sticker shock are exploring options.
“Over the past year, we’ve experienced a rise in concern from our customers about their heating oil bills,” says Stefan Petkovic, operations manager of Paraco’s HVAC and plumbing division, serving New England. “Customers spent thousands of dollars during the last heating season and are expressing their anxiety about this season.”
Like many propane suppliers, Petkovic has been busy over the past year helping homeowners transition to a clean-burning and more affordable fuel alternative. Petkovic estimates he oversaw 25 to 30 oil-to-propane conversions last year. Likewise, Steve Chase, president and owner of FSi Oil and Propane in Springfield, Massachusetts, counts nine changeouts, up from three in 2021.
“Most of our conversions happened in the last six months of 2022,” Chase says. “That’s when it really started to pick up.”
Confronting cost
While propane is currently cheaper than oil for home heating, some homeowners may question the upfront cost of converting. Switching to propane is not a small investment, but the payoffs can be big. Be prepared to talk numbers.
Chase tells homeowners they can expect a payback in 2 to 3 years at current prices. That’s an expedited timeline compared with years past when oil prices were lower. As oil prices drop, the payback period will be longer.
Propane suppliers also emphasize the benefits beyond space heating. Propane can fuel gas stoves, dryers, backup generators, and water-heating appliances, helping curb electricity costs.
“We’re really promoting the fact they can cook with it, they can clean with it, they can dry their clothes with it, they can heat their water with it and heat their homes. And they can put in outdoor amenities for entertaining,” Chase says. “There’s some ancillary advantages, as well.”
As oil prices peak, another source of warmth is spurring consumer interest: electricity. Builders and contractors are increasingly navigating discussions with their clients about electric heat pumps. These appliances are soaring in popularity.
For clients interested in heat pumps, you might suggest a dual-fuel system, which combines the efficiency of an electric unit with the reliability of a gas furnace. The gas furnace kicks on when the heat pump can’t extract enough heat energy.
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