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35% of Vermont homes still heat with oil at $3.96/gal — spending over $3,200 per year. A heat pump costs roughly $1,009/year to operate, saving $2,200+ annually. Vermont imports 100% of its fossil fuels. Switching eliminates 6.1 tons of CO2 per home per year.
Oil Heating Cost
$3,200/yr
~800 gal at $3.96/gal
Heat Pump Cost
$1,009/yr
~4,700 kWh at GMP rate
Annual Savings
$2,191
+ free AC in summer
| Cost Category | Oil Boiler | Heat Pump | Savings |
|---|---|---|---|
| Annual Heating Cost | $3,200/yr | $1,009/yr | $2,191/yr |
| Fuel/Energy Rate | $3.96/gal | $0.2146/kWh (GMP) | - |
| Annual Maintenance | $200-400 | $75-150 | $125-250 |
| Air Conditioning | Separate system needed | Included | $500-2,000 AC savings |
| CO2 Emissions | 6.1 tons/yr | ~0.1 tons/yr | 6.0 tons eliminated |
| Equipment Lifespan | 15-20 years | 18-25 years | - |
| 10-Year Total Cost | $37,000+ | $11,600 | $25,400+ |
Vermont has zero in-state fossil fuel production. Every gallon of heating oil is imported from outside the state, making VT homeowners vulnerable to global price volatility and supply disruptions.
When you fully transition from oil to a heat pump, the oil tank must eventually be decommissioned. The process and cost depend on whether the tank is above or below ground.
$500-$1,000
$1,000-$3,000
If contamination found: Remediation can cost $5,000-$30,000+. VT has a Petroleum Cleanup Fund that may cover costs. Contact the VT Agency of Natural Resources.
Switching from oil to a heat pump is one of the most impactful climate actions a Vermont homeowner can take.
6.1 tons
CO2 eliminated per home per year
98%
Reduction in heating carbon emissions
122 tons
Lifetime CO2 savings (20 year lifespan)
Federal 25C Tax Credit: Expired December 31, 2025. $0 available for heat pumps in 2026. EVT rebates ($2,200 ducted, $475/head ductless) + utility income bonuses (GMP $2,000, VPPSA $1,000) are your primary incentives.
A typical VT home burning ~800 gallons of oil per year at $3.96/gal spends about $3,200 annually on heating. A heat pump costs approximately $1,009/year to operate at GMP's $0.2146/kWh rate, saving roughly $2,191 per year. Over 10 years with fuel price escalation, total savings exceed $25,000.
Above-ground oil tank removal costs $500-$1,000 and is straightforward. Underground oil tank decommissioning costs $1,000-$3,000 including soil testing, filling with sand/foam, and filing abandonment papers with the VT Agency of Natural Resources. If contamination is found, remediation can cost $5,000-$30,000+.
Not necessarily. Many VT homeowners keep their oil system as backup for the first winter while they get comfortable with the heat pump. This is especially common in northern VT (Zone 6A) where design temps reach -15F. You can remove the oil system later once you are confident the heat pump handles your heating needs.
Vermont imports 100% of its fossil fuels from out of state, making VT homes vulnerable to global oil price volatility. Every dollar spent on heating oil leaves the Vermont economy. Switching to a heat pump powered by VT electricity (much of it renewable) keeps energy spending local and shields you from oil price spikes.
A typical VT home burning 800 gallons of oil per year produces approximately 6.1 tons of CO2 annually. A heat pump powered by Vermont electricity produces approximately 0.1 tons of CO2 due to VT's clean grid (heavy hydro, solar, wind). That is a 98% reduction in home heating carbon emissions.
In southern Vermont (design temp -10F), yes — a properly sized cold-climate heat pump can be the sole heating source. In northern VT and the NEK (design temp -15F), many homeowners keep their oil boiler as backup for extreme cold days. The heat pump handles 90-95% of heating, with oil backup for the coldest 5-10 days per year.
EVT offers $2,200 per ducted system or $475 per ductless indoor head. Income-eligible GMP customers can add a $2,000 condenser bonus. There is no additional bonus specifically for oil conversions in VT (unlike some states), but the standard rebates apply. The federal 25C tax credit expired December 31, 2025.
With a ducted system costing $12,000-$20,000 and an EVT rebate of $2,200, your net cost is roughly $9,800-$17,800. At $2,191/year in savings vs oil, the payback period is 4.5-8 years. Income-eligible GMP customers with the $2,000 bonus see payback in 3.6-7.2 years. After payback, savings continue for the 18-25 year equipment lifespan.
EVT + GMP income bonus guide.
Pricing breakdown by type + city.
Models for VT -15F winters.
Propane at $3.77/gal comparison.
EVT contractor checklist.
Which utility is best for HP.
Save $2,200+ per year by switching from oil to a cold-climate heat pump. NuWatt Energy connects Vermont homeowners with EVT-participating installers. Get a free quote and see your savings.