Advice on oil to gas/electric conversion

Old 06-11-21, 06:11 AM
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Advice on oil to gas/electric conversion

I am new to the forum and am looking for advice on converting from oil to propane and eventually heat pump.

We recently brought a home in Riverhead, NY. Itís a 2 story 2500 sqft home with forced air heat and AC and a 40 gallon water heater.

Current System:

a. Oil tank developed a leak and needed to be replaced,

b. AC/furnace is about 5 years old Ė Rheem 4 ton AC with Rheem oil furnace (dual zone with humidifier

c. Water heater is over 20 years old and in need to be replaced.

Since we have to replace both the water heater and oil tank, we thought it would be a good opportunity to convert from oil. We are looking at 2 options

1) Replace the water heater with a tankless combi unit powered by propane and add a hydronic heat exchanger to the plenum and keep the existing oil furnace but only use the blower and the oil would be capped off

2) Replace the water heater with a tankless combi unit as above but replace the AC/Furnace with a AC/Heatpump. We will add a heat exchanger to the air handler as a backup to the heatpump since temperature can get below freezing during the winter.

Option 1 looks cheaper initially, but may cost more to run in the long run. Additionally, I am not sure if itís legal to have a oil furnace capped off.

Looking for advice from this group on which option is best and if you have recommendation on equipments.

Thanks in advance,

CC From LI
Old 06-11-21, 09:45 AM
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Look at a hybrid water heater. Electric but very efficient.

Oil is still a good solution for heating.

Your location is a bit cold for most heat pumps since your temps can go below 0ļF. You would need to use electric heat strips which can be expensive. Might also need an service upgrade.
Old 06-11-21, 09:49 AM
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Welcome to the forums.

It would be a good idea to check on propane costs too as that can be considerably more than oil.
Old 06-11-21, 10:13 AM
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Propane prices are highly variable. I have a thousand gallon tank which is enough for about 2 years but it allows me to purchase when the price is favorable, which is usually in late summer when demand for propane is very low.
Old 06-11-21, 07:49 PM
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I personally wouldn't replace a 5 year old oil furnace. A new above-ground or basement oil tank would be safe and a much more cost-effective replacement.

I'd at least consider a domestic hot water system, where the same furnace heats the potable water too, but I'll defer to the experts to explain the pros/cons, especially with installing with an existing furnace.
Old 06-12-21, 03:52 AM
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Thank you for your responses so far.

Asoff, when you say hybrid water heater, are you referring to tankless but uses electricity instead of propane?

Two other pieces of information that I should have added initially.
1) We are installing propane for our pool heater, so our thoughts is it would simplify things by having less fuel type.
2) we have solar in the house. It is currently generating a credit of about 3000 kWh a year. If switching to heat pump doesnít use more than 3000 kWh a year, we can save significantly as we donít have to pay for fuel.

Old 06-12-21, 10:31 AM
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I would not recommend an electric tankless for you. If you have excess electricity then a regular electric water heater (tank based) is an easy and solid solution. A hybrid electric water heater adds a heat pump on top of a tank solution: - it costs a lot more but helps if you have high electric rates. Still might be cheaper to power a propane based tank water heater. It's all about the rates.

3000 kWh / 365 = 8 kWh available per day. A small heat pump could take 20 amps to run so 4800 Wh per hour. So if the system is on for 2 hours a day your credit would be used up.

Last edited by Astuff; 06-12-21 at 10:47 AM.
Old 06-13-21, 07:14 AM
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@AStuff - Thank you for the info. Your break down of the credit generated by the solar panel led me to try and break down the cost of running oil furnace vs heat pump and gas furnace.

Assumption - I will use 500 gallons of oil for a heating season (based on what the previous owner said, not sure if its true since we just moved in. Based on this I have the following cost:

1) Oil - 500 Gal at 80% efficiency = 55.6MM BTU. It cost around $3 per gal, total cost per season = $1,500
2) Propane - at 87% efficiency for 55.6MM BTU will require 699 gals. Cost per gal is around $2.5. Total cost per season = $1,747
3) Heat pump -
a) month where temperature drop below freezing (point at which heat pump efficiency goes down)
Jan - Avg 32.7F, Min 28.1F
Feb - Avg 33.6F, Min 28.6F
Assume the back up electric heat will be running 50% of the time and a reduced efficiency running near freezing mark (200% instead of 300%). Average efficiency 150%
b) assume months that I will be needing heat Nov thru April, with Jan/Feb requiring 50% of heating. efficiency of heat pump = 300%
c) weighted average efficiency 225%
d) KWh required at 225% is 7,236. At current PSEG Li rates of $0.21 per kWh, total cost of heat pump is $1,519. With an annual net solar credit of about 3,000 kWh, my cost should be around $889.

Based on this, it seems that it would be comparable to running the heat pump with electric back up. With solar credit, it's significantly cheaper.

Am I missing something? I can get more efficient oil/gas furnace, but the cost difference to run would be around 10% max.

Old 06-13-21, 08:01 PM
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ccfromli might look at $467 gas conversion unit, rather the buying a new gas only boiler

When in 1970's oil rose from 0.15 cents per gallon to $3.00+. DH installed Sears $150 gas conversion unit with 4” tube to replace Beckett AFG oil burner

When oil became cheaper that gas, plugged Beckett AFG burner back in. Switching units is easy. If gas prices drop can swap again.

Here is link to LI oil prices:

Last year replaced leaking 50 gallon oil fired water heater with new gas fired at 1/3 the price of oil unit.

In winter tankless coil water is circulated to it at lower cost for heat than gas fired. Is easy way to boost DHW capacity.

Last edited by doughess; 06-13-21 at 09:06 PM.

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