There are many fuel options to choose from for heating a home. Natural gas, if available, is currently one of the cheapest. I’ve also seen fuel oil, propane, electric, wood, and even city produced steam systems heating homes in Northern Minnesota. They all have advantages and disadvantages. Today, I am going to discuss heating fuel costs and heat outputs.
Before I get started, we need the definition of a BTU. The British Thermal Unit is the heat needed to
raise the temperature of one pound of water one degree. The BTU is how heat requirements of a home are measured. Most heat sources will have a BTU output listed somewhere on the unit. The photo shows a nameplate for a Natural gas boiler producing 105,000 BTU’s.
The chart below compares common heat fuels and their costs. I’ve compared the BTU output to the cost of the fuel and calculated the cost per 100,000 BTU’s so that we are comparing apples to apples. The fuel costs column is the actual cost of the fuel source at the time of this writing.
As you can see, costs vary from a low of $1.10 for natural gas to a high of $3.51 for electricity per 100,000 BTU’s. These costs are for full BTU output of the fuel. In the real world, we also have the efficiency of the heating equipment to factor in. For instance, the average efficiency of a woodstove is around 60%, making the actual cost of the heat $1.87 per 100,000 BTU’s. The next table shows cost per 100,000 BTU after factoring the efficiency of the furnace or heat source. Heat source efficiency will vary, for example, a propane furnace is available in 80% to 98% efficient models rated by the manufacturer. I assumed an average efficiency for each heat source.
We now know the real cost of heating fuels after factoring manufacture’s listed efficiencies. There are several other factors that will affect the efficiency of the heating system. Ductwork location, sizing and air sealing can all change the actual efficiency, and the cost of operating the heating system.
As an energy auditor, I’m often asked how to reduce heating costs. Of course, changing the fuel source can have an effect, but many people don’t have the option of natural gas. Changing the furnace to a more efficient unit will also reduce costs, but only slightly. Changing a 90% efficient propane furnace to a 95% efficient unit will save $.04 per 100,000 BTU’s. Having a properly sized and well installed system is important, for example, ductwork that is installed in an unconditioned attic will change the overall performance of the heating system.
Usually, the biggest reduction in heating costs is through increased insulation and air sealing measures of the home. Many homes in Northern Minnesota have an hourly heating requirement of 50,000 BTU’s during cold weather. We have the ability to reduce this heat load for comparable home to under 20,000 BTU’s. Achieving this reduction is easier when building new, but deep energy retrofitting on an existing home can produce similar results.
I would like to make a couple comments on heating with electricity. Using an electric space heater, which operates on the general service rate (the normal cost of power) of $.12 per kilowatt, (a kilowatt is 1,000 watts), is the most expensive source of heat, regardless of the style of heater. A $15 space heater will always produce the same amount of heat as a fancy $250 space heater of the same size.
So, why do people use electricity to heat their home? Many utility companies that supply electricity will offer programs for electric heating at a reduced electric rate. For example, my electricity provider has a program called dual fuel. For allowing the electricity provider the ability to turn on and off your heating equipment, the electricity rate will be reduced, typically by 50% or more. If we take the $3.51 per 100,000 BTU cost and reduce it by 50%, the rate become $1.75, which is only beat by natural gas. The dual fuel program will typically require a second source of heat that is controlled thermostatically, a wood heat source usually won’t qualify for the program. I will discuss reduced rate electricity programs in a future blog post.
So, if I were asked to suggest a heating and cooling source for a new home, what would I recommend? A cold weather air source heat pump, which is an electric heat source, would be my answer. Many of these systems can produce heat to -20 degrees, and because they move heat, instead of creating heat, their efficiency compared to other sources is over 200%. This efficiency will vary depending on outdoor air temperatures and the heat pump selected. Many electric companies will allow an air source heat pump to be placed on a reduced rate program, as long as there is a second source of heat in the home. Assuming an average efficiency of 150% and utilizing the reduced rate electricity program of $.06 per kilowatt, the cost will be $1.17 per 100,000 BTU’s. That’s cheaper than natural gas at current rates. If this system is installed in a well-insulated, tight home, the heating and cooling costs will be very little. Many high efficiency homes using air source heat pumps as their main heat are installing electric baseboard heaters to cover the heating needs of the home during the few times in the year where temperatures become too cold to operate the air source heat pump.
As a side note, I find it interesting that other areas of the world do not use the British Thermal Unit, or BTU, to show the heating needs for a structure, more common is the kilowatt hour. There are 3412 BTU’s in one kWh. The kWh makes it much easier to compare energy use when all the energy in the home is rated the same way. An example is if you were building to passive house standards, (a stringent building standard for a high-performance house), the house would have to consume less than 11.1 kWh per square foot annually. This includes all electricity loads plus any heating or cooling loads.
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