Oil-to-heat-pump conversion in older Vancouver WA homes.

An oil-to-heat-pump conversion retires the whole oil system: the furnace or boiler, the supply line and the tank. It replaces them with one electric system that both heats and cools.

How much a heat pump saves over oil heat.

A heat pump cuts yearly heating cost by about $1,300–$2,800 for a typical 2,200 sq ft Vancouver home that heats with oil today.

Oil heat is expensive. The U.S. average residential heating oil price ran $3.53 to $5.57 a gallon over the 2025–2026 heating season and hit $6.04 in the first week of October 2026, according to the U.S. Energy Information Administration, which publishes no Washington price. A gallon holds about 138,500 Btu, so an 80% efficient oil furnace delivers heat for about $32–$55 per million Btu at those prices.

A cold-climate heat pump at a seasonal efficiency of 260–320% delivers the same heat for about $8–$10 per million Btu at Clark PUD's 8.79¢ per kWh usage rate. The typical 2,200 sq ft Vancouver home in our heat pump vs furnace guide needs about 60 million Btu of heat a year: about 540 gallons of oil, roughly $1,900–$3,300 a year, against about $485–$595 a year on a heat pump.

Compare that with gas: the same home on a 95% AFUE gas furnace saves about $465 a year by switching, as our heat pump vs furnace guide works out.

What the conversion actually involves.

An oil conversion has five parts: a site assessment, equipment selection, oil tank decommissioning, electrical work and removal of the old oil equipment.

1. Site assessment.

The site assessment checks three things:

• Existing ductwork. An oil furnace heats through ducts, so those homes usually have ductwork to evaluate. Homes with an oil boiler and hydronic (water-based) heat, radiators or baseboards, usually have no air ductwork and need either retrofit ducting or ductless.
• Electrical panel capacity. If the home has 100A service, a heat pump can push it toward the limit, especially with an electric water heater or dryer on the same panel.
• Oil tank status. Above-ground or underground, empty or still holding oil: each has different decommissioning requirements and costs.

2. Equipment selection.

Oil conversions take one of three paths:

1. Ducted heat pump using existing ducts. If the ducts are in good shape (sealed, sized correctly, insulated where exposed), the simplest path. The oil furnace gets removed entirely. New air handler goes in the same closet or basement bay. Outdoor heat pump unit gets a new pad somewhere with good airflow.
2. Ducted heat pump with duct retrofit. If ducts are leaky, undersized, or partially uninsulated. We do duct sealing or partial replacement as part of the project, scoped at the walkthrough and priced as its own line.
3. Whole-home ductless. Best path for hydronic-heated homes (no existing ducts). Mitsubishi ductless runs $4,800–$19,300 installed at 2026 prices. The low end is one indoor head, and a whole house needs several, so a whole-home system costs well above it. Our ductless cost guide covers what moves the price. No duct retrofit, fully zoned comfort, and the radiators can stay in place if removal is invasive.

3. Oil tank decommissioning.

Separate from the HVAC work, the oil tank has to be decommissioned. In Washington your local fire marshal sets the rules, and most fire districts follow the International Fire Code, which requires an underground heating oil tank out of service for at least a year to be removed or permanently closed in place, according to the state Pollution Liability Insurance Agency. The work depends on the tank type:

• Above-ground basement tank: Pumped out if it still holds fuel, then cut up and removed by an oil-tank contractor.
• Underground tank (UST): Removed from the ground, or closed in place: emptied, cleaned of liquid and sludge, and filled completely with an approved inert solid material. A tank you suspect is leaking is a different job (see below).

We do not do tank work in-house. A tank decommissioning contractor quotes that part separately.

4. Electrical work.

Almost every oil conversion involves some electrical work:

• New 220V dedicated circuit for the heat pump outdoor unit (~$300–$700)
• New 240V circuit for the air handler and electric strip backup
• Panel upgrade from 100A to 200A if needed (~$3,000–$5,000)
• Sub-panel installation if the main panel is far from the new equipment

5. Removal of oil-related infrastructure.

Once the new system is running and the tank is decommissioned, the rest of the oil infrastructure can be removed:

• Oil furnace itself
• Oil supply line from tank to furnace
• Chimney liner if no other appliance uses it
• Fuel oil filter, supply pump (if applicable)

Total project cost ranges.

An oil conversion is priced in pieces. These are our 2026 Clark County prices for each piece, from our estimator and cost guides; duct work is scoped at the walkthrough and the oil tank is quoted by the tank contractor.

Electrical and duct work are added only when your home needs them.

What rebates apply.

Net rebate value for a typical oil-to-heat-pump conversion in Clark County in 2026: a seasonal manufacturer rebate at most, unless your household qualifies for the City of Vancouver's HEAR program inside city limits.

• Clark PUD heat pump rebate: Clark PUD's heat pump rebates require existing electric heat, so an oil conversion does not qualify. Confirm with Clark PUD before counting on one.
• Manufacturer rebate: Seasonal and only on qualifying equipment, when American Standard is running a promotion (as of October 2026, Mitsubishi Electric's U.S. rebate page lists utility rebates only). Ask whether one is running when you get your quote.
• Federal 25C tax credit: Expired Dec 31, 2025. Not applicable to 2026 installs.
• City of Vancouver HEAR (state-funded): Open now inside Vancouver city limits for low and moderate income households. The program assigns its own approved contractor and can cover part or all of the cost, so apply at nwnc.org/hear before signing a quote.
• Federal heat pump rebate: Not open in Washington yet, and under 2026 federal rules it will pay only to replace existing electric equipment with more efficient electric equipment, so an oil conversion will not qualify.

Why timing matters.

The best window for an oil conversion is May–August, when the tank is empty or near empty and the existing furnace can be cut out without urgency. Summer installs are also easier because we are not racing to keep a home heated. Oil prices also climbed through last winter: the U.S. average rose from $3.53 a gallon in October 2025 to $5.57 in March 2026, according to the EIA. We schedule conversions through fall as well.

To see the full project scope, request a quote. We will walk through the existing system, evaluate the tank and electrical, and build out the full project scope so you see the real number.

Questions homeowners ask.