How much does it cost to install a oil-fired boiler system?

Reviewed by Adam Graham remodeling expert. Written by Fixr.com.

If you live in the Northeast or another area without access to natural gas, you may heat your home using an oil boiler. Boilers circulate hot water or steam through radiators or radiant floor heating. They are often more comfortable and efficient than forced hot air systems but use the same fuel.

Oil boilers are less common than gas or propane and have fewer options and choices. However, they come in several sizes and have many efficiency and material options. This leads to a wide range of costs, with the national average ranging from $4,000 to $9,000, with most people spending around $6,500 for a 91% efficiency stainless steel oil boiler for a 2,000 sq.ft. home using hydronic heating with new exhaust. This project’s low cost is $3,700 for a cast iron standard-efficiency oil boiler installed with no modifications. The high cost is $11,000 for a stainless steel boiler with 95% efficiency for a 2,000 sq.ft. home installed with a new line, tank, and exhaust.

Oil Boiler Costs

How Does an Oil Boiler Work?

If you use radiators, radiant heating, or another method of steam or forced water to heat your home, and you use oil for fuel, you use an oil boiler to heat your home. Oil boilers heat water by burning oil. They work in two ways. They produce hot water circulated through your home using pipes to radiators or hydronic radiant heat systems. They can also produce steam, which is circulated to steam radiators in your home before condensing back to water and returning to the boiler.

Boilers are an efficient way of heating your home without drying the air or circulating allergens through dust. Oil boilers are most common in the Northeast, where gas is uncommon. Oil is stored on the property and is one heating fuel choice for rural areas where natural gas is unavailable.

Hot Water vs Steam Oil Boiler Cost

Oil boilers can produce hot water for hydronic heating or steam for steam heat. Oil water boilers are more common, as are hydronic heating systems. Steam radiators tend to be part of older systems and are not as common in residential settings. However, many are installed in older homes, and you may need an oil steam boiler. Water boilers tend to be smaller, less expensive, and more efficient than steam boilers. You are also likely to find more options for oil water boilers than for steam. Below are the average costs for oil boilers of both types uninstalled.

Hot Water Oil Boiler

The cost of a hot water oil boiler ranges from $1,700 to $6,000, depending on the size and features. Hot water oil boilers are designed for hydronic heating systems. This means the system heats water to high temperatures before circulating it to radiators or radiant heat systems. The water cools slightly as it travels, and once it passes through the radiant heat system or radiator, it returns to the boiler again to reheat. Oil water boilers come in several types. This includes condensing and non-condensing, with condensing systems being less common but more energy-efficient.

Oil Steam Boiler

A steam oil boiler costs $2,700 to $6,500. Steam oil boilers tend to be larger than hot water oil boilers. They are also less common, so you are less likely to find a range of features and options. While hot water oil burners are increasing in efficiency, steam oil boilers are less efficient, with average ratings of 85% efficiency. Steam boilers force the water to hot temperatures to create steam and send the steam to radiators. As the steam cools, it condenses to water where it returns to the boiler to reheat.

Non-Condensing vs Condensing Oil-Fired Boiler Price

Most oil boilers are non-condensing, but as energy efficiency becomes more important, condensing oil boilers are becoming more available. Non-condensing boilers are standard but less efficient than condensing boilers. In a non-condensing boiler, some energy and heat in the boiler exit through the exhaust system. Some have multiple pass heat exchangers to generate more heat with less loss.

In a condensing system, the exhaust is condensed to recapture the heat before leaving to vent. This raises acidity, which is why stainless steel heat exchangers are used. They resist corrosion from acidity better than cast iron. However, due to the eventual corrosion, condensing boilers are warrantied for only 7 years, but the boiler may last for 15. This is compared to a non-condensing boiler that lasts up to 25 years. The condensing oil boiler cost is higher than a non-condensing oil boiler, but most people find the higher efficiency - as much as 95% compared to 85% to 90% for a non-condensing boiler - makes up for the high upfront cost with lower monthly payments for oil. Below are the average costs for uninstalled non-condensing and condensing boilers.

Sealed vs Non-Sealed Combustion Oil Boiler Price

Most oil boilers today are sealed combustion units, but a few less-efficient models may be non-sealed combustion units. A sealed combustion unit takes fresh air from the outdoors and vents it back outside. Non-sealed units take air from inside your home and vent outdoors. Sealed units are more efficient because they do not take warmed air from your home. They are also safer because there is less chance of dangerous gasses entering your home from the unit. Because oil tends to be very sooty when it burns, nearly all oil boilers are sealed combustion. It is difficult to find non-sealed combustion units. Those that are available tend to be non-condensing and smaller than sealed combustion units. Below are the average costs for each boiler.

Oil Boiler Cost by Material

The heat exchanger inside an oil boiler is made of one of three materials - cast iron, aluminum, or stainless steel. The most common is cast iron, which is durable, long-wearing, and the least expensive. While less common, some higher-efficiency boilers use stainless steel, which is also used in a condensing boiler. Aluminum heat exchangers in oil boilers are rare, but they exist in a few models.

Stainless steel units are the most efficient, reaching efficiencies of 95%. Cast-iron heat exchangers have become more efficient, with the most efficient of the cast iron style using a three-pass system to get the most heat from the exchanger to reach efficiencies of 90%. Keep in mind that standard cast iron heat exchangers typically have efficiencies of 85%.

Aluminum is slightly more efficient than cast iron. While these heat exchangers are uncommon, they can reach efficiencies of 91%. This makes them a good compromise for those who want something longer-lasting than stainless steel while still getting good efficiency. While stainless steel heat exchangers have the best efficiency, they do not last as long as the others. This is because they are most commonly used with condensing boilers, which can slowly corrode the metal. However, most people find that increased efficiency makes up for their cost and lower lifespan.

Oil Boiler Prices by Brand

Many brands make good-quality and efficient oil boilers. The brand impacts the price because manufacturing techniques, materials, and brand names influence the unit’s cost. Costs for boilers vary by company, with Weil-McLain and Peerless oil boiler prices being some of the lowest and the cost of a Buderus oil boiler being the highest. Most companies make a range of boilers to find one that fits your needs. Some, like Viessmann, only make three or four boilers that burn oil. This is because oil is uncommon in many parts, so demand is often much lower.

When looking for durability, Green Mountain and Peerless are well known for building rugged and long-lasting boilers. They have cast iron heat exchangers, so while they do not get very good efficiency, they last. New Yorker also makes a cast iron heat exchanger with three passes, increasing efficiency while still giving durability. Viessman and Weil-McLain also make some high-efficiency units. Weil-McLain also has several steam options, which are less common, regardless of fuel. When considering larger boilers, consider Buderus, who makes commercial and residential boilers that burn oil. Carrier and Pavilion make high-quality products with a range of efficiencies and sizes.

What Size Oil Boiler Do I Need?

It is important to find the right size boiler for your home to heat your home effectively while not overspending on energy bills. A boiler that is too small struggles to heat your home, and a boiler that is too large uses more energy than necessary. To determine the size boiler you need, you need to know two things: the square footage of the area you are heating and the climate zone you live in.

To find your square footage, take the width and length of each room you heat and multiply them together. Add up all the rooms to get your total square footage. Find your climate zone by visiting the U.S. Department of Energy’s climate map. For boilers, the map is divided into 7 zones, with 1 being the hottest and 7 being the coldest. Each zone has a range of BTUs that your boiler falls into per square foot of area being heated.​

To determine your boiler size, multiply the square footage being heated by the number of BTUs needed per square foot. Stay within 10% to 20% of your range. Going more than 20% larger results in a boiler that is too large for your home. Below is the average boiler size to heat a home based on square footage in zone 4:

Labor Costs to Install an Oil Boiler

Labor costs to install an oil boiler vary depending on your home. Oil boilers are installed by HVAC technicians, who typically charge between $150 to $250 per technician an hour, with most jobs requiring 2 technicians and taking at least 5 hours. This is because oil tends to be dirty, clogging lines and contaminating the surrounding area. For new installations, you need to install a tank and oil line with the boiler. For replacement installations, you need to run a new line because they tend to clog. This usually means installing an oil boiler takes longer and costs more in installation than other HVAC equipment.

Most oil boilers are self-venting but need an exhaust or flue to vent into. If you have one, this is an easier and less expensive installation than if you need one installed. Most oil boiler installations cost $1,500 to $3,500 for a total range of $4,000 to $9,000.

Oil Boiler Replacement Cost

Oil boilers and other oil-burning appliances do not burn clean but produce soot. For this reason, you may also need to replace other system parts when replacing a boiler, such as the exhaust or oil line. This makes the replacement cost and a new oil boiler installation fairly comparable, with an average price of $6,500. In most cases, the disposal of the old unit factors into the cost. However, you may need to pay an additional disposal fee of between $50 and $200, depending on regulations in your area.

Oil Boiler Running Costs

The cost to run an oil boiler varies depending on your location, boiler size, running frequency, and energy efficiency. Determine how many gallons of oil your boiler uses per hour. This varies by boiler and should be indicated near the boiler’s serial number near the manufacturer’s name. The average oil boiler uses 1.7 gallons of oil an hour, but yours may be higher or lower.

As of March 2022, the national average cost for a gallon of heating oil is $4.968. Determine your cost by looking at your oil bill or contacting an oil supplier in your area. The average oil boiler cost to run per hour varies depending on your unit’s efficiency. Efficient models may cost $3.23 an hour, while older and less-efficient models cost as much as $9.34 an hour to run. Multiply these figures by the hours you use your boiler to determine the running costs.

Oil Combi Boiler Prices

If you also use oil to heat the hot water in your home, you may want to invest in an oil combi boiler. A combi boiler heats the water for your home through hydronic heating systems and the water you use for bathing, cleaning, and laundry. This smaller system occupies less space in your utility closet or basement than two separate appliances. They provide continuous hot water and can be more efficient than separate units. This system costs $8,000 to $12,000 installed. Your final costs are dictated by the model and size.

High-Efficiency Oil Boiler Prices

Oil boilers are not as efficient as electric, gas, or propane boilers. Most high-efficiency oil boilers rated by Energy Star only reach 91% efficiency, although one or two models reach 95%. This is because the vast majority of oil boilers are non-condensing.

The higher efficiency ones - 90% and above - cost around $2,500. It is difficult to find oil boilers with higher efficiencies, and while they exist, they often do not last as long as those with cast iron heat exchangers and lower efficiencies.

Manual J Calculation

To determine the best-sized oil boiler for your home, your HVAC technician should perform a Manual J calculation. This takes into account the square footage of the area being heated, your climate zone, and other items like the insulation of your home. This gives a more accurate size of the boiler so that it operates more efficiently and saves on energy costs each month.

Oil Boiler Service Cost

Oil boilers have higher maintenance needs than other boilers. Oil produces soot when it burns, clogging parts of the equipment. It can also develop clogs in the oil line, which may need to be cleared. They must be regularly cleaned to maintain them and keep them running well. Oil boiler cleaning costs are roughly $200 to $250 per year, and they should be cleaned at least yearly to ensure they do not develop problems.

Oil boiler tune-up costs are $250 to $500 for regular service maintenance, including inspections, changing the oil valves, cleaning clogged lines, and making other small repairs. Tune-ups are not needed as often as cleaning but should still be done every 2 to 3 years to ensure the boiler functions at peak efficiency.

Oil vs Gas Boiler Prices

Gas boilers are much more common than oil boilers, with oil boilers mainly being used in areas where natural gas is not available. Natural gas boilers are cleaner and much less expensive to run monthly. You need to keep the oil on your property in a tank with oil boilers while natural gas gets piped in, so no storage or coordinating deliveries is needed.

Natural gas boilers are slightly more expensive. However, they are more efficient and reach efficiencies of 98%. They are more common, so you have more options. They also have a much lower cost to operate and lower maintenance costs because gas burns cleaner and does not require the same maintenance as an oil boiler. Oil boilers burn hotter and use less fuel to reach the same temperatures. However, you pay more per month than a natural gas boiler because of the higher oil cost. Below are the average costs to install each boiler.

Oil vs Electric Boiler Cost

If you live in a warmer climate and only need a boiler for shorter periods, or you are adding an addition and want a hydronic heating system, an electric boiler makes a good choice. Electric boilers are inexpensive to purchase but costly to run. Like oil boilers, they are a good choice if you have no access to natural gas but are prohibitively expensive to run, so they are usually found in smaller sizes than oil boilers.

Electric boilers are much lower-maintenance than oil boilers, making them a good choice for small additions. If you have a larger home or live in a colder climate, oil is less expensive to run long-term. Electric makes more sense if you have a solar panel system or some other way to offset electricity costs. However, if you rely on grid energy, you may find oil boilers give better results for lower monthly costs, particularly if you have a large home. Below are the average costs to install an oil and electric boiler in your home.

Oil vs Propane Boiler Price

If you live in an area with no natural gas, you have a few options to heat fuel. Oil and propane are the two most common. Both are stored on your property in tanks and are delivered. Oil boilers are more expensive to run regularly. They also require more maintenance and cleaning. However, propane boilers are slightly more expensive to purchase. Propane boilers are often identical to gas boilers. Sometimes, the same boiler can run on either fuel. Other times, a small modification can make a gas boiler run propane. Therefore, you are more likely to purchase a gas boiler than one dedicated to propane.

Oil burns hotter, so you need less to heat your home. Prices for both fuels fluctuate, particularly in the areas they are most often used. Propane is usually the less expensive choice, but this varies. Below are the average costs to install a propane and oil boiler in your home.

Enhancement and Improvement Costs

Oil Tank and Boiler Installation

If you use an oil boiler, you need an oil tank on your property. This is because oil is stored on your property rather than piped in like natural gas. Installing a tank costs $800 to $3,000, depending on the tank size. The tank location and oil line length also impact costs. With the cost of a new boiler, this makes the total range $4,800 to $12,000.

Boiler Insulation

Insulating your boiler reduces your energy costs by stopping heat loss. Boiler insulation is often added directly to new tanks, but older tanks need it added after. This is usually in the form of blanket insulation. It is designed to fit over the existing boiler rather than modifying it. The cost of boiler insulation is $50 to $100.

Wall-Mounted Oil Boilers

Many smaller and high-efficiency oil boilers may be wall-mounted to save space. Keep in mind this does not apply to cast iron boilers, which are too heavy. Wall-mounted oil boilers are fairly rare. They need to be smaller and are usually made for small homes of 1,500 sq.ft. or smaller. You need to floor mount the model for larger homes. These boilers cost $2,500.

Programmable Thermostat

Save on energy by installing a programmable thermostat. Programmable thermostats allow you to automatically shut off your heating system when you are typically not at home. There are many programmable thermostats, and some can be hooked to your smart home system for better results. The cost to install a new thermostat is $100 to $400.

Generator

Oil boilers do not use much electricity, but they use some to keep the motor running. This means that if your power goes out, you cannot use your boiler. You can install a generator to solve this problem. Your generator may be able to run on the same oil you use for your boiler. Standby generators cost between $2,000 and $20,000 installed.

Additional Considerations and Costs

• Inspection. In most areas, you need a permit and inspection to have work done on your HVAC system, including installing a new boiler.
• DIY. Oil boiler installations should not be done DIY. They require knowledge of plumbing, heating, venting, and an inspection.
• Safety. Fuel oil is safe and non-explosive, making it a good option for heating homes.
• Cooling. Boilers are good at heating homes, but they do not cool them. If you want to add cooling, consider installing an air conditioner.