Last week I put up an article on the Basics of Home Heating as an overview of the different methods people employ to stay warm in the winter. Today, I'm going to run some numbers showing a cost comparison of heating with natural gas vs. heating with electricity and provide a calculator that you can use to compare the costs of two different heating methods. The calculator will give you an idea of how much it would cost you to heat with a different type of fuel, in order to get the same amount of heat output as you do with your current heating method.
Keep in mind this is for comparing two different fuels in a furnace. The comparison gets a lot more difficult when looking at other heating methods like a air-source heat pump, geothermal heat pump, solar thermal radiant heat, etc.
You can press "Click to Edit" on the top of the calculator and then change the values in green if you have heating sources other than natural gas and electricity. The values in orange will then update based on your changes. In order to compare two different sources of energy, you are probably going to have to account for a conversion factor. For example, in the below calculator the preset comparison is natural gas to electricity. On my bill, natural gas is measured in therms, and electricity in kWh, so I had to use the conversion factor of 1 therm = 29.3 kWh. To find conversion factors for all kinds of energy you can go to Online Conversion for Energy. Using the conversions, you are able to convert all sorts of different energy sources including: Gallon of Residential Fuel Oil (U.S.), Gallon of Diesel Oil (U.S.), Therm, kWh, etc.
Please note that I am comparing electric resistance heating below, not an electric heat pump. (Refer to the comments for some information regarding this issue).
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Let's go over some of the items in the calculator above.
In the "Unit" column I put the units that the fuel source is expressed in on the bill. If you use heating oil and buy it by the gallon, this would be in gallons. In the "Price/Unit" column I put the amount I pay the utility or fuel provider for each unit, not including any service fees or taxes. You can find this stated amount on your bill.
In the efficiency column, put the efficiency of your furnace/boiler/space heater. The DOE Energy Savers page has a nice section on furnace and boiler efficiency. I know that my natural gas furnace is not super efficient, but it is relatively new, so it is around 80%. I also know that electric furnaces (and space heaters) are almost 100% efficient because almost all of the electricity is converted to heat, so I used 97%.
When you are finished filling out all of the information in green, you can see the price comparison in orange. If I were to use electricity, to get the equivalent heat output that I use in natural gas, it would cost me 4.44 (.097/.022) times more money (based on current natural gas and electric rates) !
One reason electricity is so much more expensive to heat with is that it has already been converted from a fuel once (at the power plant). When you use it in an electric furnace, you are converting that electricity back to heat, which adds in inefficiency. Not only that, but the electricity has to get to you from the power plant, which also means it loses efficiency. Natural gas is used right there in your house, so it doesn't lose any energy in transportation. And while natural gas rates might fluctuate more than your electricity rate, over the long term, as natural gas rates rise, so will electricity rates because natural gas makes up about 20% of the nations mix on the electrical grid.
While it's not always easy to compare different heating methods, hopefully the calculator above will help you start to think about some of the variables; which include the cost of the fuel, how much "heat" the fuel contains, and the efficiency of the boiler. When you are considering upgrading to a new heating system, ask your home contractor, energy professional, or sales person to help you with an analysis like the one above. If they can't do that, then find one who can!