Oil Furnaces vs Gas Furnaces
Heating Fuel Battle: Oil vs. Natural Gas in Indianapolis
Choosing the right heating fuel for your Indianapolis home depends on more than just the price of a new furnace. Access to natural gas, long-term operating costs, system efficiency, and your home's existing infrastructure all play a role. While many newer neighborhoods throughout Central Indiana have convenient natural gas service, some rural properties still rely on oil-fired heating equipment.
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An oil furnace is known for producing intense, comfortable heat during cold winter weather, making it a dependable option for homes that already have oil service. However, homeowners must plan for regular fuel deliveries and ongoing maintenance to keep the system operating efficiently.
By comparison, homes served by natural gas enjoy a continuous utility supply without scheduling deliveries. Modern gas furnaces are available with very high AFUE ratings, helping reduce energy consumption while maintaining consistent indoor comfort. In many cases, upgrading to a high-efficiency furnace can lower monthly utility costs over the life of the system.
ENERGY STAR recommends replacing a furnace or boiler once it's over 15 years old; ENERGY STAR-certified furnaces in the northern U.S. are up to 15% more efficient and can save homeowners about $120/year in energy costs.
Source: ENERGY STAR, “When is it time to replace?” energystar.gov, 2026 — https://www.energystar.gov/saveathome/heating-cooling/replace
Oil and gas both provide comfort at a reasonable price. Which is the best choice for you? Let's take a look at each:
Pros and Cons of an Oil Furnace
Oil furnaces are actually very efficient. They provide more heat per BTU (unit of energy). They are also typically less expensive than a gas furnace, but the installation is fairly comparable.
There is no oil pipeline to your home, so if you heat your home with an oil furnace you must have an on-site storage tank. If you have an existing oil furnace, you can typically use the same storage unit for the new furnace. We do however recommend having the tank cleaned and checked at the time of the installation.
The need for an external storage tank is the primary reason we don't recommend switching to oil from another fuel. There cost of installing a storage tank and restoring your yard after the installation makes this a less attractive alternative for homes in central Indiana.
You will also need to contract with a firm to deliver oil on a regular basis. This firm will usually service the tank at the same time. You should also plan to have your chimneys cleaned and oil filters changed frequently as soot is more likely to build up with an oil furnace.
One last consideration is the cost of oil. The price of both go up and down, but typically oil has been slightly less expensive than natural gas.
Pros and Cons of Gas Heat
If you are converting from oil, you will need to run a gas line to your home. Depending on how close the nearest existing line is, it can be quite expensive to run the line. In Indianapolis, Citizens Gas will often discount the cost of running the lines if homeowners agree to convert multiple appliances (furnace, stove, dryer, and or hot water heater) at the same time.
Gas furnaces tend to be more expensive than comparable oil units and do not create as much heat per BTU as oil.
On the other hand, natural gas burns cleaner than oil so less soot accumulates in the chimney. While periodic cleaning is still recommended, it does not need to be done as often.
If you are concerned with the environmental impacts, natural gas has a relatively low carbon footprint and is considered one of the cleanest nonrenewable energy sources.
Finally, natural gas is there when you need it. Since it is delivered to your home through a pipeline buried underground, there are no delivery schedules to manage. It is available when you need it.
What Is AFUE, and Why It Matters for Oil Furnace vs. Gas Furnace Efficiency
AFUE (Annual Fuel Utilization Efficiency) measures how efficiently a furnace converts fuel into usable heating for your home over an entire season. The higher the AFUE rating, the more heat your system produces from the fuel it consumes and the less energy is wasted through the exhaust. This makes AFUE one of the most important numbers to compare when choosing between an oil furnace and one of today's high-efficiency gas furnaces.
Many older oil furnace systems operate at AFUE ratings between 60% and 80%, while modern natural gas furnaces commonly achieve ratings of 90% to 98% AFUE. A higher-efficiency furnace can reduce monthly utility bills while providing more consistent indoor comfort throughout Indianapolis winters.
It's important to remember that AFUE is only part of the equation. The condition of your existing furnace, the quality of the furnace installation, your ductwork, insulation, and regular HVAC maintenance all affect real-world heating performance. An older oil furnace that hasn't been serviced may lose efficiency over time, while a properly maintained natural gas system can continue operating near its rated performance for many years.
If you're deciding whether to repair your current furnace or upgrade to a newer system, Chapman Heating, Air Conditioning, Plumbing & Electrical can evaluate your home's existing equipment, explain AFUE ratings, and recommend the best solution based on your comfort needs, budget, and long-term energy savings. Our HVAC professionals help Indianapolis homeowners choose reliable heating systems that deliver dependable performance season after season.
ENERGY STAR requires gas furnaces to hit 90% AFUE (U.S. South) or 95% AFUE (U.S. North, which includes Indiana) to certify — while oil furnaces only need to reach 85% AFUE.
Source: ENERGY STAR, “Furnaces Key Product Criteria,” energystar.gov, 2026 — https://www.energystar.gov/products/furnaces/key_product_criteria
Heat Pump vs. Gas Furnace: Is There a Better Alternative?
For many Indianapolis homeowners, a heat pump is another option worth considering when replacing an older furnace. While gas furnaces remain one of the most popular heating systems in Central Indiana because they provide dependable warmth during freezing temperatures, advances in heat pump technology have made them a practical solution for many homes.
Unlike a gas furnace or oil furnace, a heat pump doesn't create heat by burning fuel. Instead, it transfers heat from the outdoor air into your home, making it one of the most energy-efficient ways to provide heating and cooling throughout much of the year. During Indianapolis' coldest winter days, however, many homeowners still prefer the reliable performance of natural gas heating.
In fact, dual-fuel systems are becoming increasingly popular. These systems combine a heat pump with a gas furnace, allowing the heat pump to handle mild weather while the furnace automatically takes over during colder temperatures. This approach can improve comfort, reduce energy use, and provide dependable heating throughout Indiana's changing seasons.
If your home currently relies on an aging oil furnace, installing a high-efficiency heat pump or one of today's gas furnaces may significantly improve comfort and lower operating costs. The best choice depends on your existing HVAC equipment, access to natural gas, your insulation levels, and your long-term goals for the home.
| If This Sounds Like You... | Recommended Option |
|---|---|
| You already have natural gas service and your furnace is over 15 years old. | Upgrade to a high-efficiency gas furnace. |
| Your oil furnace still works well, but you're wondering if it's worth replacing. | Schedule a professional efficiency evaluation before making a decision. |
| You're building a new home or replacing your entire heating system. | Compare a high-efficiency gas furnace with a heat pump or dual-fuel system. |
| You want the lowest long-term operating costs and improved energy efficiency. | Ask Chapman Heating about today's ENERGY STAR® heating options. |
| You're not sure which system is right for your Indianapolis home. | Schedule a free replacement estimate with Chapman Heating, Air Conditioning, Plumbing & Electrical. |
At Chapman Heating, Air Conditioning, Plumbing & Electrical, our experienced HVAC professionals help homeowners compare all available heating solutions, not just the initial installation price. We evaluate your existing furnace, discuss expected furnace maintenance requirements, estimate long-term operating costs, and explain whether a heat pump, gas furnace, or dual-fuel system is the best fit for your home. We also provide expert heating repair, preventative maintenance, and complete replacement services to keep your heating system operating efficiently for years to come.
Frequently Asked Questions
No. Indiana does not have a statewide plan to phase out the oil furnace. However, throughout Indianapolis and many surrounding communities, natural gas availability continues to expand, making gas furnaces a popular choice for new heating installations. If you're deciding between keeping an existing oil furnace or upgrading your home's furnace, Chapman Heating, Air Conditioning, Plumbing & Electrical can help you compare long-term energy efficiency and installation costs.
A well-maintained oil furnace or gas furnace typically lasts 15 to 20 years, although some systems operate longer with professional maintenance. As your furnace ages, efficiency declines and energy costs often increase. If your home's heating equipment is more than 15 years old, Chapman Heating, Air Conditioning, Plumbing & Electrical can inspect the system and recommend whether continued maintenance or replacement makes the most sense.
Yes, provided the oil furnace has been properly maintained and the home has a reliable fuel supply. Before purchasing, it's a good idea to have the furnace inspected and ask about its service history. If natural gas is available in your Indianapolis neighborhood, Chapman Heating, Air Conditioning, Plumbing & Electrical can also provide services to evaluate conversion costs and help you choose the best long-term heating solution.
Compared with natural gas, an oil furnace requires regular maintenance, annual tune-ups, and dependable fuel deliveries. Some homeowners also prefer not to rely on seasonal deliveries. Even so, many existing systems continue to provide dependable heating for Indianapolis homeowners when they're properly maintained. A professional inspection can help determine whether keeping your current furnace or upgrading is the better investment.
Both systems are safe when installed correctly and serviced regularly. Whether your furnace uses natural gas or oil, annual inspections, professional repair when needed, and carbon monoxide detectors help keep your home safe. Chapman Heating, Air Conditioning, Plumbing & Electrical recommends yearly HVAC maintenance to maximize safety, reliability, and performance.
Yes. Chapman Heating, Air Conditioning, Plumbing & Electrical provides professional HVAC inspections, maintenance, diagnostics, and repair for many types of residential heating equipment, including natural gas and oil-fired systems. Whether you need seasonal furnace service or help deciding if it's time to replace your furnace, our experienced technicians can recommend the best solution for your home.
