Is it time to replace your worn out heating system? Or maybe you’re thinking about buying a supplemental heater for the most frequently used areas of your house. What type of heating system should you buy? If you are in the market for a home heating appliance, you will need to know how to compare the cost and value of different heating fuels. This bulletin explains how to calculate which fuel source will provide the best value.

There are several factors you will want to consider and compare before installing a new heating system. But one of the very first factors you should consider is the type of heating fuel to use. There are actually four different variables you must work with as you do the calculations to determine which fuel provides the most heat for the fewest dollars.

The four variables of heating fuel value:

1. Type of heating fuel
Several choices are available: natural gas, electricity, propane, wood, and wood pellets are fuels commonly used for our area.

2. Unit cost of heating fuel
That is, the amount of money the fuel costs per unit of measure it is typically sold by. Propane is typically sold by the gallon; wood by the cord; electricity by the kilo-watt hour, and wood pellets by the ton.

3. Per-unit energy content (Btu) of the fuel
A Btu (British thermal unit) is a measure of heat energy. One Btu is equal to the amount of heat required to raise the temperature of one pound of water by 1°F. Different fuels produce different amounts of heat energy when burned.

4. Efficiency of the heating unit
The efficiency of the heating unit, expressed as a percentage, is a measure of how effectively a heating system turns heat released from burning fuel into heat you can use to warm your home. All heating systems will lose some heat to start-up, cool-down, and escape with combustion gases.

Use the table below to figure the cost of our most common, local heating sources.  As you can see, calculating and comparing the cost per million Btu provides a way to compare the value of heating fuels sold and priced by very different units of measure. Knowing the best fuel value, along with installing the most efficient heating appliance you can, can significantly reduce your heating costs.

You will need to check for current costs of each fuel source for a more accurate comparison, but here is a few examples of local prices from early in January 2010:

Propane:                $1.89 per gallon.

Natural Gas:          $0.73 per therm.

Wood Pellets:       $195.30 per ton.

Hardwoods:          $90-$150 per cord.

Electricity:             $0.076 per kwh. (Southwest Electric Cooperative’s trailing rate, or all usage over 200 kwh’s, is $0.076 per kwh).

Cost Per Million BTU For Several Heating Options

Propane Gas

            1,000,000 BTUH                     =   18.2 GALS     X _____cost per GALLON     =     __________

(91,800 BTU/GAL X 60% EFF)                                                                                       Total Cost

            1,000,000 BTUH                     =   11.5 GALS     X _____cost per GALLON     =     __________

  (91,800 BTU/GAL X 95% EFF)                                                                                     Total Cost

            1,000,000 BTUH                     =   10.9 GALS     X _____cost per GALLON     =     __________

  (91,800 BTU/GAL X 100% EFF)                                                                                    Total Cost

Natural Gas

            1,000,000 BTUH                     = 16.7 THERMS X _____cost per THERM (CCF) = __________

(100,000 BTU/THERM X 60% EFF)                                                                                Total Cost

            1,000,000 BTUH                     = 10.5 THERMS X _____cost per THERM (CCF) = __________

(100,000 BTU/THERM X 95% EFF)                                                                                Total Cost

Wood Pellets

          1,000,000 BTUH                  =     0.09 TONS    X ______   cost per TON          =   __________

(14,000,000 BTU/TON X 80% EFF)                                                                                Total Cost

Hardwoods

         1,000,000 BTUH                     =       0.07 CORD  X  _____   cost per CORD     =       __________

(20,000,000 BTU/CORD X 70% EFF)                                                                                Total Cost

Electric Resistance Heat

           1,000,000 BTUH                 =    293 KWH      X _____cost per KWH             =     __________

  (3,413 BTU/KW X 100% EFF)                                                                                       Total Cost

Air Source Heat Pump

            1,000,000 BTUH                =    117.2 KWH     X _____cost per KWH             =     __________

     (3,413 x AVG C.O.P. of 2.5)                                                                                       Total Cost

Ground Source Heat Pump

            1,000,000 BTUH                =     73.25 KWH     X _____   cost per KWH          =     __________

     (3,413 x AVG C.O.P. of 4.0)                                                                                       Total Cost

Insert your local cost for each separate type of fuel/energy to find the cost per million BTU. 

The figures listed reflect an average value from different resources and are intended for informational purposes only.

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