CRUNCHED NUMBERS REVEAL TRUE HEATING OPTION COSTS
Figuring out the best energy source to heat your home isn’t easy but may be necessary
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), while 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 think the issue needs more attention. Choosing the most economical energy source comes down to wading through math to reveal truths that are not immediately obvious.
My own overall household electricity rate hovers around 15 cents per kWh, and this is probably pretty typical. This number comes from the total amount I pay monthly, divided by the total number of kilowatt hours 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.
ELECTRICITY
At 15 cents per kWh; baseboard or resistance heater equals $43.96/million BTU.
At 15 cents per kWh; air source heat pump equals $18.29/million BTU.
PROPANE
At $1.15 per litre; vented room heater equals $73.27/million BTU.
At $1.15 per litre; furnace or boiler equals $61.06/million BTU.
OIL
At $1.20 per litre; furnace that is 78-per-cent efficient equals $41.97/million BTU.
NATURAL GAS
At 13 cents per cubic metre; furnace or boiler equals $4.51/ million BTU.
At 13 cents per cubic metre; vented room heater equals $5.69/ million BTU.
WOOD PELLETS
At $6 per bag; vented room heater equals $23.31/million BTU.
CORD WOOD
At $100 per 16-inch face cord hardwood; non-catalytic stove equals $28.86/million BTU.
At $100 per 16-inch face cord hardwood; catalytic stove equals $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 has 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 of 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-percent 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 government assistance programs offered in Canada for insulation upgrades.
Energy prices rise and fall, and while the financial relationships of different heating energy options will change over time, we all need to make home heating decisions based on current market realities.
Steve Maxwell is often surprised at what numbers reveal. Visit Steve online for a large collection of home improvement and DIY information.