This comparison is decided by two numbers you control and one you do not. Your electricity rate, the coefficient of performance the equipment actually achieves in your house, and the price of oil.
| System | Energy price | Conversion | Cost per MMBtu delivered |
|---|---|---|---|
| Oil furnace, 85% | $5.54 a gallon | 138,490 Btu a gallon | $47.02 |
| Heat pump, COP 2.5, US average rate | 18.34 cents a kWh | 2.5 units out per unit in | $21.50 |
| Heat pump, COP 2.5, Massachusetts rate | 29.61 cents a kWh | 2.5 units out per unit in | $34.71 |
| Heat pump, COP 1.8, Massachusetts rate | 29.61 cents a kWh | 1.8 units out per unit in, deep cold | $48.21 |
| Resistance electric backup, Massachusetts | 29.61 cents a kWh | 1.0 | $86.78 |
EIA State Heating Oil and Propane Program / W_EPD2F_PRS_NUS_DPG / published 30 March 2026 / checked 23 September 2026 / lag 177 daysthree to six months oldtier A
Last in-season print. The survey pauses after March and resumes in October, so this figure ages all summer.
EIA Electric Power Monthly / Retail sales, residential, US / published 26 August 2026 / checked 23 September 2026 / lag 28 daysone to four weeks oldtier A
US average residential retail rate, all-in cents per kilowatt hour.
EIA Electric Power Monthly / Retail sales, residential, Massachusetts / published 26 August 2026 / checked 23 September 2026 / lag 28 daysone to four weeks oldtier A
Massachusetts residential retail rate. New England runs well above the national average.
Why New England is the hard case
New England has both the highest oil dependence in the country and among the highest electricity rates. Those two facts pull in opposite directions. At the Massachusetts rate of 29.61 cents, a heat pump at a coefficient of 2.5 costs $34.71 per million Btu against oil at $47.02. It still wins, and the margin is a great deal thinner than the national figure suggests.
Drop the coefficient to 1.8, which is a realistic deep cold figure for many installations, and the heat pump costs $48.21 per million Btu. That is above oil. The annual result depends on how many hours of the season are spent in that condition, which is a degree day question specific to your location.
The seasonal average decides the bill. The design temperature decides whether the house is warm.
Incentives, kept in their own account
Regional and state programs reduce installed cost, sometimes substantially, and they are worth pursuing. They do not appear anywhere in the table above and they should not, because a capital subsidy does not change what a kilowatt hour costs. A quote that folds a rebate into a running cost claim is not a quote you can compare.
Primary sources for this page
- NEEP cold climate air source heat pump product listPerformance data at low ambient temperature, used instead of a manufacturer headline COP.
- EIA Electric Power MonthlyAll-in residential retail rate, used for the heat pump comparisons.
- EIA State Heating Oil and Propane ProgramWeekly residential delivered price of No. 2 heating oil, national and by state. Collected October to March. The survey pauses after the last March print and resumes in October, which is why every federal page shows March data all summer.
- NOAA heating degree daysThe degree-day basis for the annual burn model on this site.