Energy Cost Comparison

Fuel Cost Information

The first step in comparing the cost of one energy source against another is to fill in the following table. Your sources of information are your furnace equipment manuals, your utility bills and  fuel suppliers in your area. Cross out the typical efficiency value from the table shown below (this value is of a late model furnace) and put in your information for your furnace to get an accurate comparison. You should also remember that some fuels costs fluctuate significantly between summer and winter.  Propane and #2 fuel oil are prime examples. Use mid winter rates for a good comparison of mid winter costs.

Fuel Cost Comparison Tabulation

The second step is to convert your energy source into a common energy unit. Typically a British Thermal Unit (BTU) is chosen for this purpose. Multiply the amount of energy you used this past year by one of the conversion factors below that match the unit of energy on your energy bill and then by the efficiency of the furnace in your building.

For example; in my home I have a 15 year old natural gas furnace with an efficiency rating of 80%. This means that 80% of the energy fed to the unit is converted into heat,  to heat the house, while 20% is lost up the flue with the combustion gasses.

So to estimate the upcoming heating season energy usage in BTUs, we'll assume it is the same as last year. The cost of that energy using today's prices (there was a huge increase in the price of natural gas in July of 2001) would be:

BTUs = (437 therms)(100,000 BTUs per therm)(.80 efficiency)
         = 34,960,000 BTUs

cost   = (437 therms)($ 1.20 per therm)
         = $ 523.42

The third step is to now use the following equation. The calculated energy usage in BTUs comes from above. The anticipated alternative energy source price comes from the first table above. The appropriate conversion factor and the appropriate coefficient of performance (COP) or efficiency comes from the second table above. The alternative energy cost would be equal to:

  (energy used in BTUs)(price of alternate energy source)
        (conversion factor)(COP or efficiency)

For example; suppose I were to replace my natural gas furnace with a ground source heat pump. The estimated annual cost to heat my home would be:

  (34,960,000 BTUs)($ .10 per KWH)       
      (3413 BTUs/KWH)(3.1 COP)

 or $330.43. This cuts my heating bill by almost 40% or about $200. for the entire year.

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