Heating Cost

When talking to customers who are wanting to change out their heating & cooling system, I often hear "I want an electric furnace instead of a gas furnace."

Some people are Chevy fans, while others Like Fords, and some love other brands. Automobiles move us from place to place and they burn fuel.

We rate cars in MPG Miles per Gallon. Knowing your cars MPG and the current cost of fuel you can calculate how much it will cost in fuel for each mile you drive. We understand that the higher the MPG the better, because it will cost less to operate.

Furnaces, heat pumps, electric heat, etc… are rated differently. Their ratings are in AFUE, SEER, EER, HSPF, The Higher the better. But what does that mean in dollars and cents to heat my home? An electric furnace is rated at 100% AFUE while a 96% natural gas furnace is rated at 96% AFUE. While the higher the rating the better is true the cost of operation is vastly different.

To make a fair comparison lets purchase 1 Million Btu's of USABLE heat for each appliance, allowing for losses out the flue.

Below is a chart that helps explain the cost of operation for 1 Million Btu's of usable heat, and below that is how the information in the chart was obtained.

The following data is from my home for the month of March 2019. My family used 123 CCF of natural gas to heat our home and our water. 1 CCF is 100 cubic feet. 123 CCF x 100 = 12,300 cubic feet. Each cubic foot of natural gas produces 1000 Btu's 12.3 x 1000 = 12,300,000 Btu's. 12.3 million Btu's x $8.51 (96% Nat. Gas Furnace in chart above) totaling $104.67. If Our home had an Electric furnace rated at AFUE of 100% our bill to heat our home and water would have been 12.3 Million Btu's x $37.22 totaling $457.81. A total Cost Difference of $353.14. This is for heating only, and does NOT COUNT the lights and other electrical items (base load) we have. This is only 1 month. Operating an electric furnace for 15 years for just the month of March would cost $353.14 x 15 = $5,297.25 MORE to operate than a gas furnace. Typically March is NOT the coldest month of the year! This $5,297.25 nearly replaces the cost of an entire system and it is only 1 month a warmer month at that. So the question is Which furnace do you want in your home? Clearly the appliance rated at 100% AFUE costs more to operate than the one rated at 96% AFUE and this is due to the cost difference of fuels used.

If you only have L.P gas available, I would recommend using a heat pump instead of A/C only. Having an air to air Heat Pump gives you a CHOICE. If the cost of L.P. is low, use the furnace it costs less to operate and is a much warmer heat. For back up heat a 96% AFUE L.P. furnace costs less to operate than an electric furnace. Using the chart above helps you to understand where the price break is.

NOTE: As the outdoor temperature goes down air to air Heat Pumps lose capacity and efficiency and cost more to operate. For this reason we show the same heat pump operating at two different outdoor temperatures 55 & 15 degrees. Air to air HP efficiency and capacity are dependent upon the outdoor temperatures, they are varied. As it gets colder your home loses more heat and the air to air HP may not keep up with the heat loss, causing the back up heat to switch on. In the St. Joseph, MO area this typically occurs at about 30-40 degrees, depending how well your home is insulated. When your thermostat calls for back up heat and you have an electric furnace both the furnace and the air to air HP will operate simultaneously. If you have a gas furnace the air to air HP shuts off and the furnace only operates. Placing your heat pump thermostat in the EM heat or Emergency heat Mode will lock out the air to air HP and only the back up furnace (gas or electric) will operate.

Does it sound complicated? Call today so that we may put together a system that best fits your situation and needs.

The Following Data is from ACTUAL monthly natural gas bills for our home for 1 year. Our home used an annual total of 528 CCF of natural gas from November of 2019 through October 2020. We have a 95% AFUE natural gas furnace and a 70% AFUE natural gas water heater. To get an idea of the actual water heating usage I used May through August gas bills to know how much gas was used to heat our water as the furnace didn't run during these months. The total amount of gas used for these 4 months was 42 CCF. This gives us an average monthly summer water heating usage of 10.5 CCF. Most homes as well as mine use more hot water during the summer than in the winter due to more showers, laundry & etc. Since we don't have a way to separate home heating VS Water heating usage in the winter I will use the 10.5 CCF each month for water heating.

FYI: 1 CCF = 100 Cubit Feet of gas. Each cubic foot of natural gas contains 1000 Btu's. All calculations include Service fees and taxes and are based off of the actual billed totals for each month. Also AFUE stands for Annual Fuel Use Efficiency which means for every $1 you speed on gas burnt by a 95% AFUE furnace will give you $0.95 worth of heat and $0.05 of that $1 goes out the flue to keep the birds warm. Did you know that water heaters are the second largest energy consuming device in the home.

Next for the months where we heat our home I simply subtracted 10.5 CCF each month from the total billed CCF to obtain the actual home heating CCF. For this 12 month period we were billed for a total of 528.0 CCF of which 126 CCF was used for water heating. This gives us a total of 402 CCF for heating our home for the year. It took a total of 40.2 million Btu's to heat our home for the year.

Our total natural gas cost for the year was $573.73. The total cost for heating water was $209.41 (36.5%) for the year, leaving $364.32 (63.5%) as the annual cost of heating our home. Now we will break down the cost into "Cost per 1 Million Btu's". $364.32 / 40.2 = $9.06 Annual average per 1 Million Btu's to heat our home.

Now after all this work we have a realistic cost per 1 Million Btu's for THIS HOME and THIS PERIOD OF TIME and we used this number in the Spreadsheet chart above for an across the board comparison. The more CCF that you use the lower the average cost per million will be due to the inclusion of the service fees and taxes. Everyone pays for the service fees and taxes and it is a cost included in using that utility, so it is more accurate to use them in the calculations. What is NOT included in these calculations is the cost of the electricity of operating the gas furnace electrical components, our water heater doesn't use electricity.

For the sake of apple to orange comparison this is what the EXCLUSION of the Service fees would look like. The cost of winter CCF is $.15637 x 402 CCF = $62.86 is what the actual cost of the gas was to heat our home for the year. The gas used to heat our water $.15637 x 126 CCF = $19.70 for the year. Taking the total paid $573.73 - $62.86 - $19.70 = $491.17 was paid in Service fees and Taxes. As you can tell 85.6% of THIS HOMES gas bill was Service fees and taxes and only 14.4% was the billed cost of the gas. For this reason we have included Service fees and taxes into the calculations to obtain a much more realistic cost per 1 million Btu's.

Cost of Heating with Heat Pumps

Which SEER rating is best?

As you know outdoor temperatures are always changing and this creates a huge challenge in answering this question. Another factor is the internal load of the structure such as lighting, bathing, laundry, computers and other heat generating devices. A simple rule of thumb is 6.3 degrees Fahrenheit below the set point. If you set your thermostat at 70 degrees the internal load will provide enough heat that a call for heat generally won’t occur until the outdoor temperature is 63.7 degree. When the outdoor temperature is below this point occasional cycles of your heat pump will occur. These calls are usually very short in duration. As the outdoor temperature drops further more frequent and longer calls for heat will occur.

Air to Air Heat pumps provide heat for your home by removing heat from the outdoor air. As the outdoor air temperature drops there is less heat in the air, so the heat pumps performance declines as the outdoor air temperature drops. In the St. Joseph, MO area about 35 degrees is a typical balance point. Every home and HVAC system is different so this balance point is only an average. The balance point occurs when the amount of heat that is lost from the home is in balance with the amount of heat that is being provided by the heat pump. When at balance point the heat pump will run 100% of the time. As the outdoor temperature drops further, the heat pump can no longer provide enough heat and a backup heat source is required to keep the home at the desired set point on the thermostat. The balance point can change on the same home. For example a calm day the balance point may be 35 degrees and on a windy day the balance point may be 39 degrees.

Simply put the answer is not easy to come by, however we can get some indication of the trend and make an educated guess. To begin lets look at a 3 ton heat pump made by Goodman Mfg. We will look at the performance data published by Goodman Mfg. www.goodmanmfg.com/support/literature-library We will compare a 14 SEER to an 18 SEER both 3 ton units. In the chart below you can see at first glance the 18 SEER will save us money. We can see by the Savingsthe difference in operational costs. The good thing is that outdoor temps usually are not below 10 degrees for very long.

Now the question is how much money can we save in a year of operation? To answer that lets use the 40.2 million Btu’s that was required to heat my home from Nov 2019 to Oct 2020. That savings is listed in the chart below.

Now we have seen several charts that show operational cost at given outdoor temperature. In St. Joseph, MO according to https://www.degreedays.net/ based on Rosecrans Memorial Airport Weather data for the past 5 years I found that half of the HDD Heating Degree Days were at and above 51 degrees. 50 degrees and below accounted for the other half. If we look at the 50 degree outdoor temp on the charts above, it gives us a place to compare. Please note this is just a look at 50 degrees and as we know the outdoor temperature is ALWAYS changing. We do need an educated guess to make a choice and the above information is how we made that guess.

Conclusion: At the averaged 50 degree point the 14 SEER operational cost for 10 years was $3924.04 and the 18 SEER was $3324.08 a Savings of $599.96. To upgrade from 14 to 18 SEER you can anticipate spending $1500 or more.

Nearly all manufactures place a 10 year warranty on their equipment. This is how long they are willing to stick their necks out to cover your equipment. Lets say your equipment will last for 15 years before requiring replacement. What can we expect to save with the higher efficiency 18 SEER heat pump?

The chart below represents 15 years of heating operational costs & savings based on the 40.2 Million Btu's for each year.