Heat pump vs oil furnace is, for most Seattle homes, a decision about the tank as much as the furnace. A heat pump removes the oil tank liability, adds cooling and qualifies for Seattle Clean Heat’s $2,000 rebate. No official Washington heating oil price series exists, so running costs must be compared using your own invoices.
Key takeaways
- There is no official heating oil price series for Washington, so oil savings cannot be stated precisely from public data.
- On City Light rates, a heat pump averaging a COP of 2.5 beats an 80% oil furnace whenever oil costs more than about $1.74 a gallon.
- Keeping oil means keeping a tank, and the state's no-cost heating oil insurance expired June 30, 2025.
- Seattle Clean Heat takes $2,000 off a qualifying conversion, with $4,000 more for moderate incomes.
Census data counts about 10,607 Seattle households heating with oil, roughly 2.9% of the city, and the city’s own estimate is about 7,000 to 10,000 homes. The Seattle Heat Pump Company plans and manages oil to heat pump conversions in Seattle and King County, with the heat pump installed by licensed and insured contractors and the tank handled by ICC-certified decommissioners. This guide sets out the comparison honestly, including the part no one can price.
Side by side
| Ducted air-source heat pump | Oil furnace | |
|---|---|---|
| How it heats | Moves heat from outdoor air into the house | Burns heating oil delivered by truck |
| Cooling | Yes, the same system | No |
| Fuel storage | None | An oil tank, buried or in the basement |
| Running cost data | Published electric rates | No official Washington oil price series |
| Tank obligations | Old tank decommissioned once, under a Fire Department permit | Ongoing tank upkeep and leak risk |
| Incentives | Clean Heat $2,000 plus income-based bonuses; City Light $300 or $600 | None identified |
| Direction of city policy | Supported by the city’s 2030 goal | City aims to transition all oil homes by 2030 |
Running cost: why there is no official number
Most cost comparisons start with fuel prices. For oil in Washington, that is where the trail ends. The federal weekly residential heating oil price survey does not cover Washington, and no state agency publishes a substitute. Any website quoting a precise “Seattle oil vs heat pump” savings figure is working from an assumption, not an official local price.
What you do have is your own delivery history. With your price per gallon and two published numbers, you can run the comparison for your house.
The electricity side. City Light’s current Seattle rate is 13.38 cents per kWh, which works out to about $39.21 per million BTU of electricity. A heat pump with a seasonal COP of 2.5 turns that into about $15.69 per million BTU of heat in the house; at a COP of 3, about $13.07.
The oil side. A gallon of heating oil holds about 138,500 BTU. An 80% efficient furnace delivers about 110,800 BTU of that into the house; a 70% furnace, about 97,000.
Put those together and you get the oil price at which the two cost the same:
| City Light Seattle rate | Oil furnace at 80% efficiency | Oil furnace at 70% efficiency |
|---|---|---|
| Heat pump averaging COP 2.5 | Heat pump wins above about $1.74 per gallon | Heat pump wins above about $1.52 per gallon |
| Heat pump averaging COP 3.0 | Heat pump wins above about $1.45 per gallon | Heat pump wins above about $1.27 per gallon |
These are break-even points, not oil prices. Hold them against your last invoice. City Light’s suburban rate of 14.64 cents per kWh raises each break-even by about 9%. The figures leave out fixed charges and taxes, and real bills depend on sizing, ducts and controls: a heat pump that leans on electric backup heat, which has a COP of 1, costs more than this math suggests. The operating cost guide covers the details, and the Seattle winter guide explains why a well-sized heat pump runs efficiently through most Seattle weather.
The tank is the bigger question
An oil furnace comes with a tank, and the tank carries obligations a heat pump does not.
The Fire Code. Seattle requires a heating oil tank out of service for a year or more to be decommissioned, by removal or by filling in place, by an ICC-certified decommissioner under a Fire Department permit. Converting to a heat pump triggers that once. Staying on oil means keeping the tank in service indefinitely.
The insurance is gone. For years, Washington’s Pollution Liability Insurance Agency (PLIA) provided no-cost heating oil insurance. That policy expired June 30, 2025, and new claims are no longer accepted. A tank that leaks now is the owner’s problem, with PLIA’s loan and grant program as the main backstop.
Leaks are expensive. The City of Seattle says cleanup of a leaking residential tank “can exceed $10,000,” and PLIA says most completed cleanups exceed $60,000. Neither figure is a range; both say the downside is open-ended.
Selling the house. Washington’s seller disclosure statement asks about fuel storage tanks and soil contamination. Buyers often ask for the decommissioning permit and report, and a well-documented, decommissioned tank is a simpler conversation than an active one.
The oil tank decommissioning page explains removal versus filling in place, and the oil conversion cost guide prices both halves of the job.
Comfort and cooling
An oil furnace, like a gas furnace, pushes hot air in short bursts. A heat pump delivers warm air over longer, steadier cycles, which with a variable-speed unit usually means more even temperatures. The adjustment is real: supply air from a heat pump feels warm rather than hot, and that is normal.
The difference that changes daily life is cooling. Sea-Tac’s cooling degree days roughly doubled from the 1990s to the last decade, and the June 2021 heat dome reached 108°F. An oil furnace offers nothing for that; a heat pump cools the house with the same equipment. See central air with a heat pump for the cooling side.
Older oil-heated houses do need their ducts checked. A heat pump moves more air than an oil furnace to deliver the same heat, so a small return or leaky crawlspace runs can limit it. A static pressure test settles that before equipment is chosen. See heat pumps for older homes and heat pumps with existing ductwork.
Compare the two paths for your houseSend a few details about the furnace, the tank and the ducts, and the estimate will cover both halves.
Get an EstimateWhat replacing oil with oil involves
Replacing a failed oil furnace with a new one keeps the house on the same fuel, the same tank and the same delivery schedule. It adds no cooling and, qualifies for no Seattle incentive we could identify. It also leaves the tank question for later, when the city’s conversion incentives may be gone. The Seattle Heat Pump Company does not install oil furnaces, so this guide cannot price that path, but those are the trade-offs to weigh against a conversion quote.
The 2030 goal and what it means for you
Seattle has set a goal of transitioning every oil-heated home to cleaner heat by 2030. The city estimates the count fell from about 18,000 in 2018 to roughly 7,000 to 10,000 today. It pursues the goal through incentives, not a ban: there is no rule forcing an existing home off oil, and Seattle’s heating oil tax was repealed in 2022.
The practical effect is that the incentives are concentrated now, and some carry deadlines. Fire Department records show about 1,000 to 1,400 residential tank decommissioning permits a year since 2021, so thousands of households have already made this switch.
Rebates for leaving oil
The incentives currently available:
- Seattle Clean Heat takes $2,000 off a conversion to a qualifying Mitsubishi Electric heat pump installed by a participating contractor. It is not income-restricted.
- The moderate-income bonus adds $4,000 for households at 81% to 150% of area median income, on installs completed within the program’s current funding period.
- Office of Housing HomeWise offers free conversions to income-eligible households.
- Seattle City Light adds $300 or $600 on qualifying equipment.
- PLIA’s Heating Oil Loan and Grant offers up to $75,000 per project, through cleanup grants and a loan that can cover a conversion, but only for work it approves before it starts. PLIA takes applications in a limited window each year, usually in late fall, so check PLIA’s site for the current dates.
The federal 25C tax credit ended for equipment placed in service after December 31, 2025. The rebate guide covers each program in full.
Outside Seattle
Oil heat is more common in some suburbs than in the city. Census data puts Burien at about 9.0% of households, Lake Forest Park at 6.5% and Shoreline at 4.1%. The running-cost math above applies there with City Light’s suburban rate, and PLIA’s program is statewide, but Seattle Clean Heat and HomeWise do not apply outside city limits. See Burien and Shoreline and Lake Forest Park.
Next step
The comparison comes together quickly once the house is measured: the heat loss, the ducts, the panel, the tank’s location and the best spot for the outdoor unit. The typical conversion walkthrough shows the sequence from assessment to final inspection, and the cost estimator gives a heat pump range before you share contact details. To get both halves of the number, call or send a few details about the furnace, the tank and your last oil bill.