One of the most common questions posed to energy
specialists at Engineering Extension asks for a com-
parison between costs to operate different heating
and cooling systems. It might be a comparison of a
furnace to a heat pump, a regular furnace to a high-
efficiency furnace, or a wood burning stove to a pel-
let stove.
There are two components to cost, the initial cost to
purchase and install the system, and the ongoing fuel
cost. In general, higher efficiency equipment costs
more initially but saves operating costs. To determine
the purchase price, get bids from one or more con-
tractors. Be certain bids include all costs to make the
system fully functional including duct work, ther-
mostats, and chimneys. This fact sheet will help you
compare the cost of fuel for several types of heating
and cooling systems.
Annual cost of delivering heating and cooling to a
home depends on cost of the fuel, how efficiently the
system converts the fuel source into heating or cool-
ing energy, and the quantity of heating and cooling
required. The following section, “Estimating the cost
of heating or cooling”, allows you to estimate the
cost of one million Btus for several fuels and system
types. However, if you want to compare annual esti-
mated costs for two or more fuels, then you will also
need to estimate the heating load of your home. This
process is explained in “Estimating annual costs” on
page 7.
Engineering Extension
June 2003
Introduction
What is the price of fuel?
Fuel prices vary between suppliers, may change
seasonally, and are affected by world events. To
estimate fuel costs, you can either contact your
local utility or supplier or you can use past
billings.
To estimate natural gas costs from your utility bill,
divide the monthly charge by the consumption,
usually measured in MCF. The cost should be
between $3 and $12 per MCF. Use a winter bill
so meter charges are spread out over several units
of gas. If your bill shows gas consumption in
CCF, you will need to multiply the gas cost by 10
to get it in $ pe