Comparing Fuel Costs

You can use the following method to estimate the costs of producing one million Btu of heat using different heating appliances and fuels. To do this, you need to know the efficiency of the appliance and the unit price of the fuel. To get the unit price of the fuel, take your energy bill for one month and divide it by the number of units you consumed or purchased during the billing period. This will include all the costs associated with buying that type of fuel, such as the cost of the fuel itself and other charges such as transmission, distribution or delivery, and taxes. You can also contact the utility or fuel supplier in your area for the unit price of the fuel and the cost to deliver it to your house. Remember, the fuel price should not be the sole measure for selecting a heating appliance.

To use the formula below, remember to use a decimal for the appliance heating efficiency you are assuming (see Table 2). You must first convert the Btu content of the fuel per unit to millions of Btu by dividing the fuel's Btu content per unit by 1,000,000. For example: 3,413 Btu/kWh (electricity) divided by 1,000,000 = 0.003413.

• Energy cost ($ per million Btu) =
  Cost per unit of fuel ÷ [ Fuel energy content (in millions Btu per unit) × Heating system efficiency (in decimal).]

Examples:
Note: the fuel costs used below are the national annual average residential fuel prices in 2001 according to the Energy Information Administration (EIA), U.S. Department of Energy. Prices will vary by location and season. Also, it is difficult to predict future costs for fuels. More information on heating fuel prices is available from the EIA: phone: 202-586-8800; email: infoctr@eia.doe.gov; Web site: www.eia.doe.gov. The system efficiencies used below are for these examples only.

• Electric resistance baseboard heat cost =
  $0.086 (price per kWh) ÷ [ 0.003412 × 0.99 (efficiency)] = $25.46 per million Btu.
• Electric heat pump heat cost =
  $0.086 (price per kWh) ÷ [ 0.003412 × 2 (efficiency)] = $12.60 per million Btu.
• Natural gas (in medium efficiency central heating system) heat cost =
  $9.96 (per thousand cubic feet) ÷ [ 1.03 × 0.90 (efficiency) ] = $10.74 per million Btu.
• Oil (in medium efficiency central heating system) heat cost =
  $1.25 (price per gallon) ÷ [ 0.14 × 0.85 (efficiency) ] = $10.5 per million Btu.
• Propane (in medium efficiency central heating system) heat cost =
  $1.09 (price per gallon) ÷ [ 0.0913 × 0.85 (efficiency) ] = $14.05 per million Btu.

<< Previous    1  [2]  3    Next >>