Crunched numbers reveal true heating costs
When it comes to managing home heating costs, identifying the most economical energy source is not simple. One reason is the way energy is priced. Electricity is sold in cents per kilowatt-hour; oil in cents per litre; propane is also sold in cents per litre, but a litre of propane has about 50 per cent less energy than a litre of furnace oil. Some people heat with wood pellets (sold in dollars per 40-pound bags), other people buy firewood (dollars per face cord or dollars per bush cord). I touched on the confusing topic of home energy pricing late last year, and enough readers asked for more information that I see the issue needs more attention. Choosing the most economical energy source comes down to wading through math to reveal truths that’s not immediately obvious. That’s what we’ll do here. My own overall household electricity rate hovers around 15 cents per kilowatt-hour and this is probably pretty typical. This number comes from the total amount I pay monthly, divided by the total number of kilowatthours consumed. Electric heat makes sense as a basis of financial comparison because it’s so universal. Many Canadian homes could have electric heat, so it’s a useful starting point. To compare apples to apples, the financial numbers coming up next reflect how much it costs to purchase one million BTUs of heat as supplied in different forms and with various efficiency ratings from the different heating appliances. Energy rates quoted below are typical where I live (Ontario):
ELECTRICITY
@15 cents per kilowatthour; baseboard or resistance heater = $43.96/million BTU @15 cents per kilowatthour; air source heat pump = $18.29/million BTU
PROPANE
@$1.15 per litre; vented room heater = $73.27/million BTU @$1.15 per litre; furnace or boiler = $61.06/million BTU
OIL
@$1.20 per litre; furnace 78 per cent efficient = $41.97/ million BTU
NATURAL GAS
@13 cents per cubic meter; furnace or boiler = $4.51/ million BTU @13 cents per cubic meter; vented room heater = $5.69/ million BTU
WOOD PELLETS
@$6 per bag; vented room heater = $23.31/million BTU
CORD WOOD
@$100 per 16” face cord hardwood; non-catalytic stove = $28.86/million BTU @$100 per 16” face cord hardwood; catalytic stove = $25.25/million BTU Of course, these numbers are just a snapshot based on current prices, but they do provide a lot to consider, including the fact that natural gas is by far the most economical choice right now. It’s been that way for a long time, too, but only in places with access to it. Electricity costs almost 10 times more for a given amount of heat than natural gas when that electric power is run through a baseboard heater or furnace (ouch), but electricity also turns out to be the next cheapest option up from natural gas when that electricity is run through an air-to-air heat pump. I hear plenty of people who are installing propane heating systems right now because they believe it’s an economical choice, but I wonder how many realize that operating costs for propane heat are currently almost 50 per cent more than oil, at least where I live? No discussion of home heating would be complete without talking about insulation. Moving from a poorly insulated home to a fully insulated one could do more to lower heating costs than changing your furnace from one type to another. Visit baileylineroad.com/ insulation-programs for a current list of all the government assistance programs offered in Canada for insulation upgrades. Energy prices rise and fall, and while the financial relationships of the different heating energy options will change over time, we all need to make home heating decisions based on current market realities.