Recently a friend asked me that question. He is building a new home located where there is no natural gas service. His choices for heat are limited to #2 heating oil, propane or electric. To be complete I will include natural gas in this post.
Thanks to the SEMCO web site, I have some current data to show you.
The cost per million British Thermal Units tells part of the story. The other part of the story is how efficiently the energy source is used.
Natural gas At $8.10 per million BTUs is by far the least expensive, where it is available. Having natural gas available also gives you low cost for water heating, cooking and for the clothes dryer. Best of all it is low in pollution and it comes mostly from within our borders. The demand is seasonal so there are price peaks in winter and summer. You can usually get the best deal in September.
If your house is not located where the natural gas pipes are then the choice gets more involved. The efficiency of how well your heating system can use the available energy becomes a big factor.
Propane Is $15.37 per million BTUs works like natural gas but at a higher cost.
No. 2 heating oil With the second best cost at $10.03 per million BTUs is a good choice, as long as:
- The tank is outdoors to keep spillage smell outdoors
- The price of oil doesn’t go crazy due to some international incident
- The price of oil doesn’t go crazy due refinery damage from fire, storms or worse
- You don’t mind annual fuel filter replacement, burner adjustment and cleaning service.
Oil is not as clean as electric, natural gas or propane. Cleaning the black soot out of the furnace and chimney pipe is part of the required annual service. There will be a slight oil odor in the house after each service visit.
If you use oil for heat, you pretty much have to use electric for everything else, cooking, hot water and clothes dryer.
Electric resistance heaters like baseboard heaters or space heaters, are a poor choice because they are the highest cost way to use the highest cost energy source. Electricity is the most expensive energy source at $27.54 per million BTUs,
Electric Heat Pumps that exchange heat with the outdoor air are an interesting choice for winter heat and for summer air conditioning. They use the highest cost energy source but they have a low operating cost due to their very high efficiency.
Folks who have electric heat pumps for heating and air conditioning tell me that the comfort level on cold winter days is only “fair”. Most end up using electric space heaters in some rooms on the coldest days. That kills the efficiency savings.
The reason for the “fair” comfort rating is mostly one of perception. A house that is 70 degrees with a heat pump feels cooler than a house that is 70 degrees using oil or natural gas. How is that possible you ask? The answer is wind chill.
Most fuel fired forced air heating systems are designed for as much as a 20-degree temperature increase from the return air to the warm air discharge. The air that the furnace blows out the heating registers feels warm.
With electric heat pump systems, the temperature increase is very low. With the “wind chill” effect, the air that flows out of the heating registers feels cool. The blower must run a larger percentage of the time to move the same amount of heat. The cool feeling airflow usually results in someone pushing the thermostat up a degree or two. There goes the savings.
Heat pump systems seem to be running all the time. We all know that fuel-fired furnaces run for a time and are off for a long time until needed again.
Heat pumps offer slow gentle heating and cooling. If you turn the heat down when you leave the house, it will take a heat pump system longer to warm it back up when you return.
Heat pumps that use geothermal heat from a loop of piping buried in the ground are the most energy efficient and, of course, the highest initial cost. Their efficient use of power lowers their operating cost close to that of natural gas.
So the answer is:
I told my friend, who does not have natural gas available, from a lowest operating cash flow for energy point of view the best are:
• Electric heat pump with ground loop for heating and A/C
• Propane tankless water heater
• Propane kitchen range
• Either electric or propane clothes dryer
If you cannot afford to buy a heat pump with ground loop, go with a propane furnace and very high efficiency air conditioner.
My personal choice in his situation would be:
• Propane forced air furnace
• Propane tankless water heater
• Lennox model XC21 very high efficiency air conditioner
• Electric range, electric dishwasher
This is a compromise for the best comfort at a low energy cost with reduced safety risk. This would use short propane pipes to one part of the basement only. My dream team picks would be similar with natural gas in place of propane.
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