Conversion to natural gas from oil

[Scanner]

Anyone know a hard, fast and steady rule?

Here's my situation (so many financial decisions in the last 2 month):

Oil furnance boiler at my house of 1-2 months owner is on it's last leg. It will last the winter though as they "patched it up." Home inspector did not catch it but covered himself nicely in the report with a disclaimer "You should have this inspected by a qualified oil furnace inspector". Basically, I paid $385 for an energy audit (another thread/story - the "value" of home inspectors).

So, okay, it' $3700 to replace an oil furnace - that's one estimate.

Add to it the hot water heater is kind of old (I think there is a burned out element in there). I have to keep it on 140 degrees to not run out of hot water in 7 minutes in the shower.

So, the proposal is convert to a natural gas boiler (I have radiator heat) and merge the hot water tank with the boiler.

First estimate: $9700.

I can 0% finance $8000 of it thru South Jersey Gas Co. (a certified contractor does the inside work but SJG finances it apparently) but if I do that, I forego any tax credit subsidy, which actually requires a further energy upgrade (it's really comprehensive to do that - extra insulation, basement wallboard, etc.).

Any energy/utility saving hounds out there? Would you finance this? I'd imagine my utility bills would have to go down in the winter and getting off of electric hot water would probably help year round.

Any insight is appreciated.

[Scanner]

PS: Something of a BLOG topic, I suppose, but I must admit, I do struggle with decisions like this - going for value/efficiency over the "patch job" and knowing when the return of investment (ROI) is appropriate.

Of course, there is no such thing as "0% financing". . .something is padded somewhere of course. . .but oil was $3.35 gallon from my supplier - last delivery was $600. I have to think this makes economic sense, a natural evolution of taking a home built in 1950 in 2011.

Again, I'll stop speaking now and let you all speak. . .but it's just something I struggle with - like my car - I am paying $200/month in car repairs on average. . .so it makes sense to pay a bank interest for a new(er) car but I must admit, I struggle with a past that says

"DEBT = EVIL"

[Snodog]

Here is a fuel cost comparison calculator that may prove helpful.

I was looking at replacing my old oil furnace a few months ago but decided to run it till it dies. Natural gas is not available where I live and the fact that the new oil furnaces are not any more efficient were determining factors for keeping it. Plus the fact that who knows how long we plan to live here.

Natural gas is cheap right now compared to oil and its hard to imagine it will change with all the shale gas drillings.

Everyone has an opinion and you hear differnent things but here's my 2 cents- I wouldn't go with the highest effeciency. Higher effeciency models are newer technology that's usually unproven and you may have more problems. And once you get above 80-85% or so more effeciency won't save you that much.

If your savings on fuel are greater than what your monthly payments would be on a loan with the duration being the expected lifetime of the new furnace I would think it would be worthwhile to replace.

[Scanner]

Snodog,

Very good advice I think. . .I have no clue as a consumer what to buy. Maybe they are quoting me the "Cadillac" of boiler/hot water heaters when a Toyota or Ford would be just fine.

Even though i am getting 2-3 quotes on contractors, it's hard to know how to be a good consumer.

I agree - I don't think natural gas will ever exceed oil any time soon. There should be immediate savings.

I know natural gas, oil, all fossil fuels rise and fall, whereas electric is just a steady climb.