The central A/C needs replacing, so we are getting a heat pump. With the heat pump, we would also need an air handler, but I was told that a furnace also functions as an air handler. So for just an additional $200-300 more I could have a propane furnace?

Currently the heat is a Smith oil boiler with baseboard radiators. I've heard this heat is great, but every house I've ever lived in has had forced air heating, so I have no experience. I have no idea how old the boiler is or how efficient it is.

The way I see it I have 3 choices:

1. For only $200-300, get a propane furnace. Scrap the oil boiler, radiators, and oil drums.

2. Replace the oil boiler with a propane boiler. Estimated cost would be $6-8k. I'm sure a new propane boiler would be more efficient than the current oil and I would save in upkeep.

3. Keep the oil boiler, but I would have to pay for cleaning, tune-up. I would also have to pay to re-run the flue (the current one is corroded, so the previous owners had been basically venting the boiler to the attic, surprised no one died)

Any suggestions?

Get a good high efficient single stage heat pump with demand defrost. This will handle a big majority of your heating. 15 seer would be good. I would want one that is one the quiet side since it will be running alot. Having a compressor blanket is a must.

The propane option sounds nice, but propane is not cheap either. You would probably be better off with straight electric element as backup (probably just as expensive as oil or propane).

The nice thing about the water heat is it is very even, quiet, and produces no dust. But you won't be using it very often since you will have the heatpump. Its up to you if you want to keep the oil base-board, get rid of the base-board altogethor. I'm not sure what the point of switching from oil to propane would do for the baseboard.

Good point on the heatpump running all the time. I was considering the pros of the water heat for the entire winter, but with the heatpump, I would only be using water heat maybe 1 month a year.

If I was starting from scratch, I would have no problem just going with a heatpump and propane furnace, but I just feel guilty about tearing out installed water heat.

What is a compressor blanket?

Is this area prone to power outages in the winter? If so, then having propane (and a generator to run the blower) will keep you warm.

Fuel oil may cost you $4-$5/gal this winter and beyond.

the baseboard heat is even and quiet.

I would not do a propane boiler.

Have you checked on the disposal price of the oil equipment? The tank is not just something you toss in the trash (assuming it is above-ground).