Southern Michigan Heating & Cooling

Service · Hillsdale, MI

Oil to Propane Conversion in Hillsdale, MI

The one conversion the state actually pays toward

In Hillsdale, MI and across the county: the one conversion the state currently pays toward, and the questions worth asking before anyone quotes it.

Fuel oil is down to 2.5 percent of occupied homes in Hillsdale County, Michigan — still several hundred households, and the direction of travel across the state has been one way for a decade.

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A blue burner unit bolted to the front of a green boiler, with the fuel line and controls attached
  • 76,879 → 35,680 Michigan households heating with distillate fuel, 2010 to 2021 MPSC Winter Energy Appraisal 2025–26
  • 2.5% of Hillsdale County homes still on fuel oil or kerosene, against 0.9% statewide US Census ACS B25040
  • $250 per unit from MiPropane, and a furnace plus a water heater counts as two Michigan Propane Commission

Why This Is the Conversion This County Keeps Doing

Three numbers explain it. Michigan households heating with distillate fuel fell from 76,879 in 2010 to roughly 35,680 in 2021, per the MPSC's 2025–2026 Winter Energy Appraisal — more than half gone in about a decade. Hillsdale County is down to 2.5 percent of occupied homes on fuel oil or kerosene. And 36.2 percent of the county already heats with bottled, tank or LP gas, against 8.6 percent for Michigan as a whole (ACS B25040).

So the infrastructure, the dealers and the delivery routes are already here. A household leaving oil in this county is not adopting an unusual fuel — it is joining the local norm. Natural gas would be the cheaper destination, but for most addresses it is not on the table: the main runs to Hillsdale and Coldwater through Michigan Gas Utilities Corporation, and across most of the county's 18 townships there is nothing to connect to.

The MiPropane $250 Rebate, Condition by Condition

The Michigan Propane Commission, through the Michigan Department of Agriculture, pays $250 per unit. Read the conditions before you plan around it, because two of them catch people:

ConditionWhat it means here
Replacing electric or fuel oil equipment An oil furnace coming out is squarely eligible. Propane replacing propane is not.
New ENERGY STAR equipment Furnaces must be at least 40,000 BTU. Storage and tankless water heaters and boilers also qualify.
Michigan-licensed installer Check LARA's public licence lookup before work starts, not after.
Not paired with a heat pump This rules out a hybrid system. If you were considering one, the two incentives do not stack.
Timing Installed 1 Jan – 31 Dec 2026, application in by 31 Dec 2026.

Per unit is worth reading literally. A furnace and a water heater converted in the same job are two units. If the oil system was also producing your hot water, that is worth planning around.

What you cannot claim

No utility rebate — a propane dealer is not a regulated utility, so Consumers Energy's 2026 gas measures do not apply to a tank-fed house. And the federal 25C credit applies only to property placed in service before 31 December 2025, with 25D likewise unavailable after that date, per the IRS. Any 2026 quote showing a $2,000 federal credit is short by $2,000.

What the Job Actually Involves

A red cast-iron boiler with a pressure gauge and burner assembly in a basement mechanical space
Cast-iron boilers like this one outlive almost everything else in the house. Most of what goes wrong is the burner, the circulator or the controls — not the vessel.

More than swapping a box. In rough order:

  • The propane tank arrangement — bought, leased or rented from a dealer, sited and set on a pad clear of snow.
  • Gas piping from the tank to the appliance. In Michigan this is its own licence classification: LP distribution piping and fuel gas piping are separate from HVAC equipment under LARA's Bureau of Construction Codes.
  • The furnace itself, sized to the load rather than to what came out. Hillsdale County is IECC zone 5A with 6,469.8 heating degree days a year, so this is an ACCA Manual J calculation, not a like-for-like swap.
  • Flue and venting, which change with the fuel and change again if you go to a condensing high-efficiency unit.
  • The old oil tank, removed or properly decommissioned.
  • Ductwork, if the existing runs cannot carry what the new unit pushes — a live question in a county where 26.7 percent of housing predates 1940. See ductwork.

What to Ask For Before You Sign

We publish the furnace price ranges because they are sourced. We do not publish a total conversion price, because the tank arrangement, the piping run and the oil tank removal vary by property and we have no local figures for them. Rather than invent a number, here is what to make the quote show:

  1. Each line separately — furnace, piping, tank, oil tank removal, ductwork, permits.
  2. The Manual J result, or at least what the sizing was based on.
  3. Tank terms in writing — buy, lease or rent, and what happens if you change dealer later.
  4. The MiPropane paperwork — who files it, and whether the $250 is deducted up front or reimbursed to you.
  5. Licence classifications held, checked against LARA's lookup.

For the equipment ranges themselves, see furnace replacement and what things cost.

We cover oil to propane conversion in every town and township in the county.

Oil to Propane FAQ

How much does an oil to propane conversion cost in Hillsdale County?

The equipment side is the furnace itself: installed in Michigan in 2026, roughly 3,200 to 5,500 dollars for a standard-efficiency 80 percent AFUE unit, 4,500 to 7,200 for a mid-efficiency 92 to 95 percent AFUE two-stage, and 6,000 to 9,500 or more for a high-efficiency 96 to 98 percent AFUE modulating unit, including permits and removal of the old equipment. Those are Michigan-wide ranges from a published contractor guide, not local quotes. What we cannot give you sourced is the cost of the tank arrangement, the gas piping run and the oil tank removal, because those vary by property and we have no local figures to publish. Ask for them itemised.

Does MiPropane pay for an oil to propane conversion?

Yes — this is close to the exact case the programme is written for. The Michigan Propane Commission, through the Michigan Department of Agriculture, pays $250 per unit toward ENERGY STAR propane furnaces of at least 40,000 BTU, storage and tankless water heaters, and boilers, specifically when they replace electric or fuel oil equipment or go into new construction. The conditions: Michigan resident, Michigan-licensed installer, new ENERGY STAR equipment, and the unit may not be paired with a heat pump. Installations between 1 January and 31 December 2026, applications due 31 December 2026. If you are converting the furnace and the water heater, that is two units.

Is fuel oil actually disappearing in Michigan?

Steadily. Michigan households heating with distillate fuel fell from 76,879 in 2010 to roughly 35,680 in 2021, per the Michigan Public Service Commission’s 2025–2026 Winter Energy Appraisal — a drop of more than half in about a decade. In Hillsdale County specifically, fuel oil and kerosene are down to 2.5 percent of occupied homes, against 0.9 percent for Michigan as a whole and 4.0 percent in neighbouring Branch County, per US Census ACS table B25040. That 2.5 percent is still several hundred households in this county.

Why propane rather than a heat pump or natural gas?

Natural gas is not usually an option, which is the whole point. The main only runs where density justifies laying it — Hillsdale and Coldwater are served by Michigan Gas Utilities Corporation, and across most of the county’s 18 townships there is nothing to connect to. That is why 36.2 percent of Hillsdale County homes heat with bottled, tank or LP gas against 8.6 percent statewide. A heat pump is a real alternative and Consumers Energy pays $300 toward an air-source unit at 15.2+ SEER2 for its electric customers — but note that MiPropane explicitly excludes equipment paired with a heat pump, so the two incentives do not stack.

What happens to the old oil tank?

It has to come out or be properly decommissioned, and that is a line item worth getting in writing before work starts rather than discovering afterwards. We are not publishing a price for it because we have no sourced local figure, and a made-up number here would be worse than none. Ask for it itemised separately from the furnace, along with the gas piping run and the propane tank arrangement — whether you are buying, leasing or renting the tank changes the shape of the deal considerably.

Ask About an Oil to Propane Conversion

Tell us roughly how old the oil furnace is, whether the oil tank is indoors or buried, and whether you already have a propane dealer. Those three decide most of the scope.

There is no phone number published on this site yet, so requests come in through this form — we reply by email or call you back on the number you give. That is also why the phone field is required rather than optional.

Where these numbers come from

Fuel oil trend: Michigan Public Service Commission 2025–2026 Winter Energy Appraisal. Heating fuel shares and housing age: US Census American Community Survey tables B25040 and B25034. Climate and degree days: NOAA 1991–2020 Climate Normals, Jackson Reynolds Field (KJXN); climate zone per DOE Building America. MiPropane conditions: Michigan Propane Commission via the Michigan Department of Agriculture. Consumers Energy measures: Consumers Energy 2026 programme documentation. Federal credits: IRS. Licence classifications: LARA Bureau of Construction Codes. Sizing method: ACCA Manual J. Installed furnace ranges are Michigan-wide figures from a published contractor guide. No price is published here for tank work, gas piping or oil tank removal because we have no sourced local figures for them.