Let’s start with your conventional house heated with an oil-fired central heating system. The average annual heating cost is $2,491!
- The average New England home uses 855 gallons of oil a year for heat.
- #2 Heating Oil has a net heating value of 115,000 BTUs per gallon, and generates 98.3 M BTUs.
- In 2010, the average price of a gallon of heating oil was $2.91. (We’re not making this up – it comes from the Energy Information Agency that collects statistics on residential heating oil.)1
98.3 M BTUS from 855 gallons of oil x$2.91/gallon = $2,491
That’s 20 barrels of oil. Not good for your wallet and definitely not good for the planet!
Hybrid House with a Pellet Stove
Like most homeowners, you probably install a pellet stove in your living room or kitchen, which creates heat where you need it most – in the rooms you actually use! Instead of heating a big, drafty house just so you can be toasty on the living room couch, pellet stove owners can create that same warmth a lot more efficiently, using a lot less energy.
When a homeowner installs a pellet stove and makes modest efficiency improvements, the homeowner can save in two ways:
- Using pellets instead of oil reduces the cost of heat
- Using space heating and making modest efficiency improvements in your home can reduce the amount of heat your home requires
How do the cost of heating oil and pellets compare, per unit of energy?
- Thermal energy is measured in BTU’s or British Thermal Units.
- Wood pellets at $250/ton cost about $18 per million BTU, which is a savings of $25 per MBTU vs. heating oil at $2.91/gallon
- That means for every ton of wood pellets you use, you’ll save approximately $100 per ton, even before the additional savings possible through efficiency gains.
In addition, homeowners may realize significant additional savings – in other words, by utilizing efficiency measures including space heating.
How much less? Savings will vary for each home, but The American Council for an Energy Efficiency Economy conducted a study of the efficiency benefits of space heating, combined with modest weatherization improvements.1 In their study, homeowners installed a space heating appliance in their central living areas.
The homeowners were instructed to use the space heating instead of their central heat during the more temperate months, to close off unused space and to leave bedroom doors open at night. Other efficiency measures included improving insulation, cutting air leaks from the homes and cutting registers to promote heat transfer from the first floor to the second floor in two story residences.
Your actual savings would depend on several factors, like the configuration of your house, what weatherization improvements you make, the efficiency of your heating appliance and your behavior. But in the ACEEE study, participants were able to reduce their average energy consumption by 20-40% due to a combination of the benefits of space heating and these efficiency measures.
Results will vary by installation, but taking the lower end of this range, our typical New England home could see a reduction of 20% in energy usage, requiring only 78.6 MBTU of heat. Wood pellets have a net heating value of 13.6 M BTUs per ton.
To heat this hybrid home, a homeowner could use:
54.4 M BTUS from 4 tons of pellets * $250 = $1,000
+ 24.2 M BTUS from 211 gallons of oil * $2.91/gallon = $615
$1,000 for pellets plus $615 for oil = $1,615. You could save $877!
The more pellets you use to displace oil, and the more of these efficiency measures you take, the more you could save.
Learn more about Fuel Cost Comparisons
There are dozens of fuel cost calculators available, but we’ll include a few calculators below for your reference. Bear in mind that these fuel cost calculators can tell you the cost differential between two fuels on an energy content basis ($/BTU), but they do not provide any estimate of the savings that can be associated with space heating. So the savings estimates provided by these sources may significantly underestimate your actual savings:
Available Fuel Cost Calculators:
What’s a BTU? A British Thermal Unit (BTU) describes a unit of energy. Measuring fuels by their BTU allows you to compare the heating values of different fuels.
Aren’t oil prices volatile? You bet. The EIA tracks the price of residential heating oil. We’ll leave it to the oil futures analysts to predict what happens next. But we do know that during the last fifteen years, the price of residential heating oil has more than doubled.
What qualifies as modest weatherization improvements? Weatherizing your home is a smart way to get the most out of your pellet stove. In the ACEEE study, homeowners were instructed to use the space heating instead of their central heat during the more temperate months, to close off unused space and to leave bedroom doors open at night. Other efficiency measures included improving insulation, cutting air leaks from the homes and cutting registers to promote heat transfer from the first floor to the second floor in two story residences.
i Source: Energy Information Administration, Office of Energy Markets and End Use, Forms EIA-457 A-G of the 2005 Residential Energy Consumption Survey. www.eia.doe.gov
1 McBride, Thomas, 'Zone Heating as a Low Income Energy Conservation Measure', ACEEE 1990 Summer Study on Energy Efficiency in buildings.