[gorkish]

From 2500/yr to 300/yr is 88% reduction in cost.

Heat pumps are 300% - 500% efficient, enough to represent a 66% to 80% savings on their own. Adding insulation reduces the total amount of heating necessary, plus heating oil and electricity aren't priced the same per-unit of energy.

This is not unbelievable in the slightest. Perhaps if you find it surprising, you should ponder where your reasoning got hung up.

[nimbix]

Yep, the "magic ingredient" is definitely insulation (along with triple pane windows).