How Much Does It Cost to Install an Oil-fired Boiler System?

Average range: $4,000 - $9,000
Average Cost
(stainless steel 91% efficiency boiler for a 2,000sq.ft. home with new exhaust)

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Reviewed by Laura Madrigal. Written by

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, although they use the same heating fuels.

Oil boilers are less common than gas or propane and have fewer options and choices on the market. However, they come in several sizes and with many options to choose from in terms of efficiency and material. This leads to a wide range of costs, with the national average ranging from $4,000 - $9,000. Most people spend around $6,500 for a 91% efficiency stainless steel oil boiler for a 2,000sq.ft. home using hydronic heating.

Oil Boiler Costs

Oil-fired boiler installation costs
National average cost$6,500
Average range$4,000-$9,000
Minimum cost$3,700​
Maximum cost$11,000

Oil Boiler Cost by Project Range

Cast iron standard-efficiency boiler installed with no modifications
Average Cost
Stainless steel 91% efficiency boiler for a 2,000sq.ft. home with new exhaust
Stainless steel 95% efficiency boiler for a 2,000sq.ft. home with new line, tank, and exhaust

Oil Boiler Costs 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 with a few models.

Oil Boiler Prices

Oil Boiler Prices

MaterialAverage Cost
Cast Iron$1,700 - $3,200
Aluminum$2,500 - $4,200
Stainless Steel$4,000 - $6,500

Cast Iron Oil Boiler

Most oil boilers use a cast iron heat exchanger. They are extremely durable and long-lasting, and it is not uncommon for them to keep working for more than 25 years. They are less efficient, but newer oil boilers use a three-pass system through the cast iron to increase efficiency as high as 90%. These boilers have a cost range from $1,700 - $3,200.

Aluminum Oil Boiler

Aluminum is more efficient than cast iron, but this lightweight material is rarely used with oil boilers. It does not increase efficiency as much as stainless steel, and with an oil boiler, it only achieves an efficiency of around 91%, so they are only made by a few companies. They cost around $2,500 - $4,200.

Stainless Steel Oil Boiler

Stainless steel is less common than cast iron but is slowly increasing its market share with oil boilers due to better efficiency. Stainless steel heat exchangers are used in condensing boilers, which are rare for oil boilers, to achieve efficiency ratings of 95% or higher. Stainless steel resists corrosion from the higher acidity in a condensing boiler better than cast iron, but it eventually corrodes. So while the boiler may last 15 years, the heat exchanger is generally warrantied for only about 7 years. These boilers cost between $4,000 and $6,500.

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Hot Water vs Steam Oil Boilers

Boilers come in two varieties, depending on how they heat your home. Hot water boilers are the most common, heating and circulating water to either radiators or in-floor hydronic heating systems. The hot water returns to the boiler, reheats, and circulates again.

Steam boilers are designed to work with older steam radiators or upright radiators. They are less efficient than hot water boilers because they need to reach higher temperatures, turning the water to steam, which is forced through pipes to the radiator. As the steam cools, it turns back into water and runs back to the boiler to be reheated. Steam boilers are larger to fit the extra space for the steam.

Even though steam boilers are less efficient, they tend to be more expensive than hot water boilers. Costs typically start at around $2,500 for a steam boiler, while hot water boiler costs start closer to $1,700.

Condensing vs Non-condensing Oil Boilers

The vast majority of 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 it leaves to vent. This raises the acidity of the system, which is why stainless steel heat exchangers are used. They resist the corrosion from the 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 in comparison to a non-condensing boiler that lasts up to 25 years.

Condensing vs Non Condensing Oil Boilers

Boiler TypeAverage Cost Range
Non-Condensing$1,700 - $4,200
Condensing$4,000 - $6,500

Combination Boilers

If you use oil to heat your home through steam or hydronic heat and also to heat your hot water, consider a combination or combi boiler. Combi boilers are designed for small homes using oil to heat both their home and hot water. They are high-efficiency, condensing, and are designed to be wall-hung to take up little space. These boilers are not designed to heat very large homes but handle both the heating and hot water needs of condos, tiny homes, apartments, and single-family homes 1,000 sq.ft and smaller. The units are made up of two chambers - one side heats your home and the other your hot water. They cost around $1,900 - $4,500, depending on the size.

Sealed vs Non-sealed Combustion Oil Boilers

Most oil boilers today are sealed-combustion units, although a few less-efficient models may be non-sealed combustion units.

A sealed combustion unit takes fresh air from the outdoors and vents back to the outside. Non-sealed units take air from inside your home and vent to the 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.

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Oil Boiler Costs by Brand

Many brands make good-quality and efficient oil boilers. The brand you choose plays a role in the price because manufacturing techniques, materials, and brand names influence the unit’s total cost.

Oil Boiler Costs

Oil Boiler Costs

BrandCost Range
Peerless$1,700 - $4,500
Fire Bird$1,700 - $5,500
Green Mountain$1,800 - $5,000
Pavilion$2,500 - $5,000
Carrier$2,500 - $5,200
Buderus$3,600 - $5,000

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.

What Size Oil Boiler Do I Need?

ZoneBTUs (per square foot)
1 & 218 - 30
325 - 35
428 - 40
540 - 50
6 & 750 - 60

To determine your boiler size, multiply the square footage being heated by the number of BTUs needed per square foot. Below is the average boiler size to heat a home based on square footage in zone 4:

Oil Boiler Size

Oil Boiler Size

Square FootageBTUs Needed
1,00028,000 - 40,000
1,50042,000 - 60,000
1,75049,000 - 70,000
2,00056,000 - 80,000
2,50070,000 - 100,000

Stay within 10% - 20% of your range. Going more than 20% larger than results in a boiler that is too large for your home.

Labor Costs to Install an Oil Boiler

Labor costs to install an oil boiler varies depending on your home. If you already have an oil tank and oil line, the installation is easier and less expensive than if you need a new oil line run. Likewise, if you have an older tank, you still likely want to install a new oil line if it has not already been replaced because they tend to clog up as they age.

Most oil boilers are self-venting, but they need some type of 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 around $2,000 for the labor but go as high as $3,500 if you also need to install a new oil line or flue.

Chrome pipes and valves with measuring gas pressure on oil and gas pipeline

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Oil Boiler Replacement Cost

Oil boilers and other oil-burning appliances do not burn clean but produce a lot of soot. For this reason, when replacing a boiler, you may also need to replace other system parts, such as the exhaust or oil line. This makes the cost of a replacement and a new oil boiler installation fairly comparable, with an average price for each of around $6,500.

Cost to Run an Oil Boiler

The cost to run an oil boiler varies, depending on your location, boiler size, running frequency, and energy efficiency.

To start, 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 2020, the national average cost for a gallon of heating oil is $2.607. Determine your cost by either looking at your oil bill or contacting an oil supplier in your area.

The average oil boiler cost to run per hour is $4.43. Multiply this by the number of hours you use your boiler to determine the exact cost of running it.

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.

Gas vs Oil Boiler

If you live in an area with natural gas availability, you may want to make the switch. While natural gas boilers are slightly more expensive, they achieve efficiency ratings of 98%. 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, however, and use less fuel to reach the same temperatures.

Electric vs Oil Boiler

If you live in a warmer climate and only need a boiler for shorter periods or if you are adding an addition onto your home and want a hydronic heating system for the addition, 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 in 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.

Oil Boiler Service Cost

Oil boilers are higher maintenance than other types of heating appliances. This is because they produce a lot of soot, which clogs the exhaust. The oil line becomes easily clogged and needs to be cleaned or replaced periodically. To help maintain your oil boiler, have it cleaned and serviced yearly. This costs between $200 and $500 a year, depending on the type of boiler, size, age, and location in your home.

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.

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Enhancement and Improvement Costs

Oil Boiler Removal

When replacing your boiler, your HVAC company may remove the old one at no additional cost.However, some charge a fee, depending on its location and age. This may range from $50 - $200.

Boiler Insulation

Insulating your boiler reduces your energy costs by stopping heat loss. The cost of boiler insulation is around $50 - $100 on average.

Wall-mounted Oil Boiler

Many smaller and high-efficiency oil boilers may be wall-mounted to save space. Keep in mind that this does not apply to cast iron boilers, which are too heavy. These boilers cost around $2,500.

Programmable Thermostat

Save on your energy bills by installing a programmable thermostat. Programmable thermostats allow you to automatically shut off your heating system during times when you are typically not at home. The cost to install a new thermostat is around $145 - $230.


Oil boilers do not use a lot of electricity, but they use some to keep the motor running. If your power goes out, a small generator keeps your heat on. The cost of a portable generator is around $2,000.

Additional Considerations and Costs

  • In most areas, you need a permit and inspection to have any work done on your HVAC system, including installing a new boiler.
  • Oil boiler installations should not be done DIY. They require knowledge of plumbing, heating, and venting, and require an inspection when complete.
  • Fuel oil is safe and not explosive, making it a good option for heating homes.
  • Whenever possible, increase the energy efficiency of your home before upgrading your heating system. This includes adding insulation to your pipes or walls and upgrading your thermostat so that you save money each month on heating bills.
  • Install your boiler inside your home, rather than outside. This increases energy efficiency because it does not have to work as hard to heat the water.
  • Boilers are very good at heating homes, but they do not cool them. If you want to add cooling to your home, consider installing an air conditioner as well.


  • Is it cheaper to heat with propane or oil?

In general, propane is less expensive and cleaner to heat with than oil.

  • How long do oil boilers last?

Oil boilers last anywhere from 7 to 25 years, depending on the type and maintenance.

  • How much does an oil-fired combi boiler cost?

Combi boilers cost around $1,900-$4,500.

Cost to install a oil-fired boiler system varies greatly by region (and even by zip code). To get free estimates from local contractors, please indicate yours.

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