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A Heating Fuel Cost Comparison "App"

With home heating fuel prices bouncing up and down as much as they have over the last few years, it's easy to think that there must be a better solution out there, with a different fuel. But is there?

I recently caught up with where the rest of the world was in 2005 by watching the hit documentary "March of the Penguins." It's been on my list for a while but when evening arrives I'm much more prone to watching films about people--people like James Bond, for example. But my wife and I had a baby two weeks ago, and suddenly movies narrated by Morgan Freeman seem like more appropriate family fare.

My only quibble with the movie is the name: it would be more accurate to call it "Commute of the Penguins." I had understood that the movie was about this extraordinary 70-mile walk that Emperor Penguins undertake once a year to get to their Antarctic breeding ground. I learned from the movie, though, that they go back and forth several times, with the parents taking turns to get food while the other does childcare. (Tip to dads: don't let your offspring freeze while mom is out catching fish for dinner.)

Is there a better heating fuel out there?

The cold endured by these penguins got me thinking about heating fuels. With home heating fuel prices bouncing up and down as much as they have over the last few years, it's easy to think that there must be a better solution out there, with a different fuel. But is there? Some cost calculations will help us answer that question. Let's check on the prices of major regional heating fuels. According to the Department of Energy, the average price this month for residential heating oil is $3.68 per gallon (wholesale is $2.97). Residential propane costs $2.78 per gallon ($1.52 wholesale). This varies all over the map, but the most common price I am seeing for delivered cordwood is $250 per cord. Wood pellets are priced at about $270 per ton. Electricity here in southern Vermont currently costs 14 cents per kilowatt-hour, but it's all over the map (literally) across the country.

Heating value and per unit of fuel varies

By themselves, these cost figures don't mean much because the heating value, or Btus, contained in a unit of each fuel is so different. For example, one gallon of fuel oil contains 0.15 million Btus, while one gallon of propane contains 40% less: 0.091 million Btus.

Efficiency of consumption varies a lot too

Also, the amount of useful heat obtained from a given fuel depends on how efficiently it's consumed. Combustion efficiency varies widely--from as low as 30% for the worst of the outdoor wood boilers to over 95% for a top-efficiency, condensing gas boiler. Heating with electric baseboard heaters is 100% efficient. (Keep in mind that most electricity comes from coal or natural gas, and utilities are only about 30% efficient in converting those fossil fuels into electrons delivered to your home.)


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Buildings using electric heat pumps have much higher efficiencies (typically 200%–300%), because electricity is used for moving heat from one place to another, rather than being converted directly into heat.

...And don't forget efficiency of distribution

To further complicate fuel cost comparisons, a third factor is how efficiently heat is distributed. With electric baseboard radiators, the heat is produced right in the room, so the distribution is 100% efficient. Baseboard hot water (hydronic) heat is also usually very efficient, though uninsulated hot water pipes running through an unheated basement can lower that efficiency.

With a hot-air furnace and ducts to carry the heat, however, the distribution efficiency can be quite low, especially if poorly insulated, leaky ducts run through an unheated attic or crawl space--distribution efficiency as low as 60%–65% is not uncommon.

To calculate the actual delivered efficiency of your heating system, you have to multiply the combustion efficiency by the distribution efficiency. For example, if you have a 78% efficient oil furnace and a relatively leaky duct system running through an unheated attic (65% efficient distribution), your overall efficiency of delivered heat is just over 50% (0.78 x 0.65)--meaning that only half of the energy you've paid for is actually being used to keep you warm!

Combining factors into one easy comparison

In order to combine all these factors into a meaningful comparison of heating fuel costs, it's easiest to use an online comparison calculator like one offered by BuildingGreen.

This allows you to enter your cost for a particular fuel, your heating system efficiency, and its distribution efficiency. The end result is a figure in dollars per million Btu that reflects your real costs of delivered heat and allows you to compare that with other options.

Example: Switch from oil to propane?

I know someone who heats with oil, paying $3.68 per gallon, and uses an older forced-air furnace with roughly 75% efficiency. The heat is distributed through ducts that run through the heated space, with roughly 98% efficiency. Using the online calculator, we can see my friend is paying $36.10 per million Btu.

Let's say he wants to upgrade to propane in order to take advantage of the more stable prices, and the 90% efficiency offered by good propane furnaces. With the same ducted distribution, he would be paying $34.51 per million Btu.

Switching to propane would, in this case, save some money, but not a huge amount, and particularly with fluctuating prices a fuel switch here would be debatable on cost grounds. On a carbon comparison, however the higher efficiency, cleaner-burning propane would be an improvement. I might advise this friend to switch now if he felt really motivated by that, but otherwise to get more life out of his current furnace and in the meantime, work on air sealing and other cost-effective efficiency measures.

What are you heating with, and what are you considering switching to? Check out our free online calculator at and let me know what you think.

Published October 23, 2011

(2011, October 23). A Heating Fuel Cost Comparison "App". Retrieved from

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October 28, 2011 - 5:57 am

Wolfgang, are you using electric resistance heat or some kind of heat pump? We are seeing mini-split heat pumps make more and more sense, particularly when their electricity is produced renewably.

What is your backup heat?

October 28, 2011 - 5:15 am

Your Fuel Cost Calculator App is great and eye-opening. I had to go through the same calculations to decide on a heat source for my new 900 sqft house in a clustered community that does not recommend wood heat only for air quality reasons. The calculation showed, as does your App, that electric heat is very competitive with oil and propane in fuel cost and way cheaper in installed cost. Last year my total house energy usage in the Lake Champlain area was only 5600 kWh with no wood heat. This year most of my annual electrical needs will be produced by a fixed 4 kW solar PV array with wood heat used only in the extreme cold periods.
Efficiency Vermont personnel were not too happy with my electric heat choice but their wood pellet recommendation did not meet my emergency heat needs in case of electric power failure. It also did not meet my hot water needs. I.e. I would have had to provide extra means to meet hot water and emergency heat.
I would love to see a good presentation on wood heat and hot water options for new construction.

October 28, 2011 - 3:31 pm

I was aware of various types of heat pumps when I built but was concerned about their lifetimes and capital costs. Once there is more performance history, new heat pumps may make sense if their installation is not too expensive. My backup heat is a wood stove. It is easily capable of heating the whole house and I would use it for such purpose if the compact co-housing community in which I live wouldn't object to full time use because of air quality concerns.