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Approximately 35% of Rhode Island homes still heat with oil at $3.45 per gallon. Switching to a heat pump saves the average RI household about $1,410 per year. With Clean Heat RI covering 60% of installation costs, payback can be as fast as 3.5 years.
Rhode Island has one of the highest oil heating dependencies in the nation. With heating oil prices averaging $3.45 per gallon in early 2026, the cost to heat a typical RI home is substantial. Oil prices are also highly volatile, having swung between $2.50 and $5.50 per gallon over the past five years.
Oil boilers and furnaces also require annual tune-ups, filter replacements, and periodic repairs. Older systems operating at 80-85% efficiency waste 15-20% of every gallon burned.
Heat pumps use electricity to move heat rather than generating it through combustion. A modern cold-climate heat pump achieves an average Coefficient of Performance (COP) of 3.0, meaning it delivers 3 units of heat for every 1 unit of electricity consumed. At RI Energy's standard rate of $0.28/kWh, heating costs drop dramatically.
Rhode Island does not currently offer a special reduced electricity rate for heat pump owners. However, even at the standard $0.28/kWh rate, heat pumps are significantly cheaper to operate than oil heating systems.
Beyond the direct fuel savings, you also eliminate oil delivery fees, annual boiler maintenance costs, and the risk of oil price spikes. Heat pumps provide air conditioning in summer as well, potentially replacing window AC units and adding further value.
Enter your current oil usage to see a personalized comparison with heat pump heating costs based on Rhode Island energy rates.
Current price: $3.45 $/gallon
Note: Rhode Island does not have a special heat pump electric rate. Calculations use the standard RI Energy residential rate (~$0.28/kWh).
Based on RI fuel prices as of February 2026 (oil $3.45/gal, propane $3.58/gal, gas $1.80/therm). Heat pump assumes COP 3.0 (cold-climate average). Electric rate based on RI Energy at $0.28/kWh. Actual savings depend on home size, insulation, and usage patterns.
Converting from oil to a heat pump is one of the most common heating transitions in Rhode Island. The process is straightforward, and many homeowners choose to keep their oil system as backup for the first winter.
A qualified contractor evaluates your home's heating load, insulation, and existing ductwork (if any). This determines the right heat pump size and configuration.
Your installer designs the heat pump system and submits the Clean Heat RI rebate application. Pre-approval typically takes 2-3 weeks.
The heat pump system is installed. Ductless mini-splits typically take one day. Whole-home ducted systems may require 2-3 days. Your oil system remains in place during this process.
Many homeowners keep their oil system connected for the first winter as backup. After experiencing the heat pump through a full heating season, most choose to decommission the oil boiler entirely.
When ready, a licensed contractor removes or decommissions your oil tank. Underground tanks require soil testing. Above-ground tanks are simpler and less expensive to remove.
Rhode Island offers generous rebates through Clean Heat RI, funded by ARPA dollars. These rebates apply at the point of purchase, reducing your upfront cost immediately. ARPA funds must be committed by December 31, 2026, so acting soon is important.
Important: The federal Section 25C energy efficiency tax credit expired on December 31, 2025. Clean Heat RI rebates are now the primary financial incentive for heat pump conversions in Rhode Island. HEAR rebates (up to $8,000 for income-qualified households) may also be available and can potentially stack with Clean Heat RI.
If you decide to fully transition away from oil, dealing with your oil tank is an important step. Rhode Island has specific regulations around oil tank management and decommissioning.
If your underground tank has leaked, Rhode Island DEM oversees cleanup requirements. The RI Underground Storage Tank Financial Responsibility Fund may help cover remediation costs for eligible homeowners.
The long-term financial case for switching from oil to a heat pump is compelling. This projection assumes 3% annual oil price inflation, 2% electricity rate increases, and accounts for standard Clean Heat RI rebates covering 60% of installation.
| Year | Oil Cost | Heat Pump Cost | Annual Savings | Cumulative Savings |
|---|---|---|---|---|
| 1 | $2,650 | $1,240 | $1,410 | $1,410 |
| 2 | $2,730 | $1,265 | $1,465 | $2,875 |
| 3 | $2,812 | $1,290 | $1,522 | $4,397 |
| 4 | $2,896 | $1,316 | $1,580 | $5,977 |
| 5 | $2,983 | $1,342 | $1,641 | $7,618 |
| 6 | $3,073 | $1,369 | $1,704 | $9,322 |
| 7 | $3,165 | $1,396 | $1,769 | $11,091 |
| 8 | $3,260 | $1,424 | $1,836 | $12,927 |
| 9 | $3,358 | $1,453 | $1,905 | $14,832 |
| 10 | $3,459 | $1,482 | $1,977 | $16,809 |
Over 10 years, a heat pump saves approximately $16,800 compared to continued oil heating. This does not include the value of air conditioning provided by the heat pump or potential home value increases.
Clean Heat RI rebates cover up to 60% of your heat pump installation. ARPA funding expires December 31, 2026. Get your free assessment today.
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