Is a heat pump cheaper than heating oil?

Cold-climate ASHP at ~$23.03/MMBtu effective edges heating oil at ~$32.19/MMBtu. The gap widens above 30°F and closes below 20°F as COP drops.

At what temperature does heating oil win?

Below ~15 to 20°F, COP on most ccASHPs falls under 2.0. Pure electric resistance backup kicks in, $/MMBtu spikes. Oil wins on the coldest 10 to 20 days.

What do IRA 25C credits cover?

25% of installed cost up to $2,000/yr for qualified ENERGY STAR ccASHPs. State rebates stack (MA, NY, VT, ME each have $5k to $15k programmes).

Should I keep oil as backup?

In Maine/Vermont/NH, yes. Dual-fuel (oil furnace as auto-switch backup) eliminates the resistance-electric tail.

Heating oil vs heat pump

ccASHP wins above 30°F. Oil wins below 15°F. Dual-fuel beats either alone in PADD1A north. NEEP

The bar chart (effective $/MMBtu)

Heating oil (#2)$32.19/MMBtu eff @ 85%

Propane$35.84/MMBtu eff @ 90%

Natural gas$15.43/MMBtu eff @ 92%

Kerosene (K-1)$39.13/MMBtu eff @ 85%

Heat pump (ccASHP)$23.03/MMBtu eff @ 280%

The COP curve, plain English

A cold-climate ASHP has Coefficient of Performance ~3.0 at 47°F, dropping to ~2.0 at 17°F, dropping to ~1.5 at 5°F. At COP 1.0 the heat pump becomes a resistance heater. NEEP's cold-climate spec list is the canonical reference. NEEP

Annual cost, 1,800 gal-equivalent (140 MMBtu) household

Oil only: 1,800 gal x $3.79/gal = $6822/yr.
ccASHP only: 140 MMBtu x $23.03/MMBtu = $3224/yr (at $0.22/kWh).
Dual-fuel (ASHP above 25°F, oil below): ~$3407/yr.

IRA 25C + state rebates

Federal 25C: 30% of cost up to $2,000/year for qualified ccASHP.
Mass Save (MA): up to $10,000 for whole-home ASHP, $16,000 income-qualified.
NY State Clean Heat: $0.50 to $1.00/kBtuh, typical $3,000 to $6,000.
Efficiency Vermont: $5,000 to $7,000 typical.
Efficiency Maine: up to $8,000 (income-qualified higher).

Cross-references

EIA SHOPP last reading: 2026-03-30NYMEX HO settled: 2026-07-13EIA next release: 2026-10-05