Compare Heating Costs

The best way to evaluate the economic impact of the heating alternatives available to you is with a side-by-side comparison. That's what you'll find here. Fuel, equipment and installation costs have been estimated for a typical American home in the Northeast. The annual energy demand for heat and hot water for the home in this example is 110 million BTUs, net of system inefficiencies.

  Wood Pellet Boiler Oil Propane Geothermal Heat Pump Electric Heat
Annual Energy Delivered (Btu) (1) 110,000,000 110,000,000 110,000,000 110,000,000 110,000,000
Price for Fuel (2) $240/ton $2.93/gallon $3.08/gallon $0.222/kWh $0.222/kWh
Annualized efficiency (3) 83% 83% 90% 222% 100%
Annual Fuel use (4) 8.08 tons 960 gallons 1,333 gallons 14,522 kWh 32,239 kWh
Annual cost for fuel (5) $1,939 $2,814 $4,106 $3,224 $7,157
Fuel price/MMBtu Net (6) $17.63 $25.58 $37.32 $29.31 $65.06
Investment (7) $8,500 $7,000 $7,500 $35,000 $0
Capital cost/month (8) 76 63 67 315 $0
Capital cost/year (9) $917 $755 $809 $3,775 $0
Capital Cost/MMBtu (10) $8.33 $6.86 $7.35 $34.32 $0.00
Annual Fixed Cost + Maintenance (11) $250 $150 $150 $0 $0
Total Cost per Year (12) $3,206 $3,719 $5,065 $6,999 $7,157
Total Cost/MMBtu (13) $29.15 $33.81 $46.04 $63.63 $65.06

The comparisons are made on a cost per unit of usable energy, in this case million BTUs (MMBtu). Your heating requirements may be more or less than in the example above. If your energy requirements are even higher than in the example, the cost of fuel becomes even more important. If your energy demand is lower, then the capital costs play a more significant role than in the example. For an evaluation of your situation, please contact EcoHeat Solutions.

Note that we did not include cordwood as an option in our chart because of its daily labor requirement.  It is a good economical choice for those who can manage the labor involved.

 

  1. Because boilers are less than 100% efficient, more energy is needed in the form of purchased fuel. Therefore, the energy content of the fuel consumed is higher than is actually delivered to the space in the form of heat. The figures in the table take these efficiencies into account so you get a true apples to apples comparison of heating systems. Because geothermal heat pumps are more than 100% efficient, less energy is purchased than is delivered by the heat pump, with the remaining energy coming from the ground. Typical annual efficiencies for new systems are accounted for in the table.
  2. These values are averages for March 2010 in New England, obtained either from the Energy Information Administration or from independent surveys of fuel vendors. The values are updated periodically. They were last updated April 2010.

    Pellets: Lowest of two online wood pellet vendors located in Massachusetts.
    #2 Heating Oil: http://tonto.eia.doe.gov/dnav/pet/pet_pri_wfr_a_EPD2F_PRS_cpgal_w.htm
    Propane: http://tonto.eia.doe.gov/dnav/ng/hist/n3010ma3m.htm
    Electricity: http://www.eia.doe.gov/cneaf/electricity/epm/table5_6_b.html
  3. Seasonal efficiencies are typical values for new systems. Efficiencies published by manufacturers in their marketing materials are often higher, and they represent efficiencies under ideal, steady operating conditions, not the cycling on and off that typically occurs many times every day during the course of a heating season. Cycling on and off lowers the efficiency of the heating system.
  4. These values across this row are all equivalent energy values, and factor in differences in the system efficiencies noted on the previous line. The energy content of the various fuels before accounting for efficiencies are:
    Pellets: 16.4 million BTU/ton
    #2 Heating Oil: 138,000 BTU/gallon
    Propane: 91,690 BTU/gallon
    Electricity: 3,412 BTU/kWh
  5. These values are a product of the fuel price multiplied by the fuel use.
  6. This is an apples to apples comparison of the annual cost of energy divided by the annual energy consumption, factoring in system inefficiencies, and converting into MMBtu.
  7. This is a typical installation cost (product + labor) for a system installation in eastern Massachusetts, sized at the default value (110 million BTU/year for heat and hot water) for a "typical" home. EcoHeat Solutions can help you determine what size system components you will require.
  8. This cost is a monthly cost based on the default system cost financed 100% at 7% over 15 years.
  9. The annualized capital cost is the monthly capital cost x 12
  10. This is the annualized capital cost divided by the energy use, in MMBtu.
  11. Typical "fixed" costs such as fuel delivery and annual maintenance.
  12. This is the total annualized operating costs plus the annualized capital costs, plus annual maintenance costs
  13. Total costs expressed in price per MMBtu.

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