Wood Stove vs. Heating Oil Cost: Which Is Cheaper?

Updated August 2026

A modern wood stove can reduce the cost of heating a home that relies on oil, but the actual savings depend on local fuel prices, equipment efficiency, firewood quality and how much of the home the stove heats.

This wood stove vs. heating oil cost comparison explains the cost per delivered million BTUs, estimates seasonal heating expenses and identifies expenses that basic fuel-price comparisons may overlook.

For help choosing and sizing a stove before comparing models, visit our Wood Stove Buying Guide.

The Short Answer

Using the assumptions in this guide, a modern EPA-certified wood stove delivers heat for approximately half the cost of an 85%-efficient oil furnace: about $18.94 versus $38.22 per million BTUs.

For the seasonal example below, that equals estimated savings of approximately $1,350. Actual savings depend on local fuel prices, firewood moisture, equipment efficiency and the amount of heating the wood stove replaces. Including the stove and installation, a realistic payback period is often two to four heating seasons.

Why Heating Oil Costs Can Be Volatile

Heating oil prices can change substantially based on crude-oil markets, refining capacity, seasonal demand, severe weather, regional distribution constraints and global supply disruptions. Households in the Northeast can be especially exposed because oil heating is more common and winter demand is typically higher.

This volatility makes annual heating expenses difficult to predict. For the most accurate comparison, use your current delivered heating-oil price—not a national average—and enter that figure into the cost calculation below.

What a Gallon of Oil Actually Delivers

A gallon of No. 2 heating oil contains approximately 138,500 BTUs of energy. With an 85%-efficient oil furnace, about 117,725 BTUs are delivered as usable heat; the remaining energy is lost during combustion and through the venting system.

At an oil price of $4.50 per gallon, that equals approximately $38.22 per million BTUs of delivered heat. Your actual cost will change with your local oil price and the efficiency of your furnace.

What a Cord of Wood Actually Delivers

The energy available from a cord of firewood varies by wood species, moisture content and how tightly the wood is stacked. For this comparison, we use 22 million BTUs per cord for properly seasoned mixed hardwood.

At 72% overall stove efficiency, that cord provides approximately 15.84 million BTUs of usable heat. With firewood priced at $300 per cord, the estimated cost is $18.94 per million BTUs delivered.

Your actual results will depend on the firewood and how the stove is operated. Properly seasoned wood—typically measuring 20% moisture or less—burns more efficiently and produces less smoke and creosote than wet wood.

Wood Stove vs. Heating Oil Cost Comparison

A fair fuel-cost comparison must account for both the energy contained in the fuel and the efficiency of the heating equipment. The example below assumes heating oil at $4.50 per gallon, an 85%-efficient oil furnace, seasoned hardwood at $300 per cord and a wood stove operating at 72% overall efficiency.

These figures provide a consistent comparison—not a guaranteed household cost. Substitute your local oil and firewood prices for a more personalized estimate.

Under these assumptions, the wood stove provides delivered heat for approximately 50% less than heating oil: $18.94 versus $38.22 per million BTUs.

This comparison reflects fuel cost and heating-system efficiency only. It does not include stove installation, chimney maintenance, firewood handling, oil-delivery fees or the value of the homeowner’s time.

Example Seasonal Cost: Wood Stove vs. Heating Oil

Consider a home that requires approximately 70 million BTUs of delivered heat during one heating season. Using the same fuel prices and efficiency assumptions as the comparison above:

• Heating oil: approximately 595 gallons × $4.50 = $2,678
• Wood stove: approximately 4.42 cords × $300 = $1,326
• Estimated seasonal savings: approximately $1,350, or 50%

Your home’s heating demand will vary based on its size, insulation, climate, floor plan and the percentage of heat supplied by the wood stove. Use this example as a comparison framework rather than a guaranteed savings estimate.

Choosing a Wood Stove to Replace or Supplement Oil Heat

The right wood stove depends partly on how much heating-oil use you want to replace. A smaller stove may be appropriate for supplemental or zone heating, while a stove intended to provide most of the home’s heat may need a larger firebox, longer burn time and greater heating capacity.

Do not select a stove using square footage alone. Insulation, ceiling height, climate, floor plan and heat distribution can all affect performance. Use the table below as a starting point before confirming the manufacturer’s specifications and installation requirements.

Actual heating area varies based on insulation, ceiling height, floor plan, climate, and firewood quality.

If you're not sure which size fits your home, our Wood Stove Buying Guide walks through square footage, climate, and layout considerations in more detail — or browse the full wood stove collection to compare models side by side.

Upfront Cost and Estimated Payback

Fuel savings should be weighed against the complete project cost, including the wood stove, chimney components, hearth protection, permits and professional installation when required.

Using the estimated seasonal savings of $1,350 above, a project costing $3,000–$5,000 would have a simple payback period of approximately two to four heating seasons. Actual payback depends on installation requirements, local fuel prices, annual heating demand and how much oil heat the stove replaces.

Additional Costs and Practical Considerations

The fuel-cost calculation does not capture every financial and practical difference between wood and oil heat. Before making a decision, consider:

• Firewood handling: Wood must be delivered or processed, stacked, stored and carried indoors.
• Maintenance: Wood stoves and chimneys require regular inspection and cleaning to operate safely.
• Insurance and permits: Your insurer or local authority may require notification, permits or an installation inspection.
• Heat distribution: A wood stove primarily heats the area around it. Open layouts and properly positioned fans can help move heat to adjoining rooms.
• Backup heat: Many households retain their oil system for overnight use, extended absences or unusually cold weather.
• Local fuel prices: Firewood and heating-oil prices vary significantly by location and season.

Frequently Asked Questions

Is a wood stove really cheaper than heating oil?
A wood stove can provide heat at a lower fuel cost than an oil furnace. Using the assumptions in this comparison, delivered wood heat costs approximately $18.94 per million BTUs, compared with $38.22 for heating oil. Actual savings depend on local fuel prices, equipment efficiency, firewood quality and how much oil heat the stove replaces.

How long does it take a wood stove to pay for itself?
Using the example in this guide, an installed wood stove project costing $3,000–$5,000 could have a simple payback period of approximately two to four heating seasons. Actual payback depends on installation cost, annual heating demand, local fuel prices and the amount of oil use the stove replaces.

Do I need to switch entirely from oil to wood?
No. A wood stove can supplement an oil furnace by heating the rooms used most often and reducing how frequently the furnace runs. Keeping the oil system provides convenient backup heat when you are away, overnight or during extremely cold weather.

What factors have the biggest effect on wood-stove savings?
The most important factors are local firewood and heating-oil prices, stove and furnace efficiency, firewood moisture content, home heating demand and the percentage of oil heat the stove replaces. Using your own local fuel prices will provide a more accurate estimate than national averages.

Is Switching from Heating Oil to a Wood Stove Worth It?

For a home that relies on heating oil and has access to reasonably priced firewood, a modern wood stove can substantially reduce seasonal fuel expenses. Under the assumptions used in this guide, wood provides delivered heat for approximately 50% less than oil, with estimated seasonal savings of about $1,350.

Before purchasing, compare local fuel prices, estimate the complete installation cost and confirm the appropriate stove size for your home. A wood stove can replace a significant portion of oil use while the existing furnace remains available as convenient backup heat.

Related Wood Stove Guides

This article is part of our complete Wood Stove Buying Guide. Continue your research with these related resources:

• Wood Stove vs. Pellet Stove: Which Is Right for You?
• Best Firewood for Wood Stoves: Types, Seasoning & Storage
• How to Choose the Right Wood Stove: 7 Buying Decisions
• How to Install a Wood Stove: Planning, Chimney & Safety Guide
• Wood Stove Safety Guide: Installation, Operation & Emergency Tips
• Wood Stove Chimney Guide: Installation, Maintenance & Safety

Cost estimates in this article are illustrative and use the fuel-price and efficiency assumptions stated in the comparison. Actual costs and savings vary by location, home heating demand, equipment performance, firewood quality and installation requirements. Consult a qualified professional for stove sizing and installation.