Most people use their own utility bills as the measure for their expenditures on heating and cooling costs. There’s nothing wrong with that – it makes sense. But it doesn’t allow you to compare your current utility costs to other options that could raise or lower your heating and cooling bills.

A different way to look at utility costs

The bottom line on your utility bill isn’t the only way to look at utility costs, but it’s hard to compare the cost of gas to the cost of electricity, propane or heating oil, simply because they’re different things and they’re all priced in different ways.

One good way to look at fuels is in terms of the BTUs each of these fuels creates. A BTU (British thermal unit) is defined as “the amount of work needed to raise the temperature of one pound of water by one degree Fahrenheit.” By looking at the output of each fuel, rather than its unit cost, you can easily see the true cost of using a particular fuel.

Say that you need to buy enough fuel to generate 1 million BTU. (That’s a believable amount for an average sized house in moderate winter temperatures.) You could choose from among cordwood, electricity, heating oil, natural gas, propane or wood pellets. Which fuel will generate 1 million BTU most cost-effectively?

Utility costs: are you spending too much?

Utility costs: are you spending too much?

This table shows the approximate costs for each source, and the cost per 1M BTU. At a cost of $14.59 per million BTU, it’s easy to see that you can save a lot by switching to natural gas from any other fuel source. On the surface, it also looks like the big loser is electricity. At a whopping $59.48 per million BTU, it’s hard to understand why anyone would want electric heat! The other fuels – heating oil, pellets and cordwood – are roughly comparable. Propane is lower than electricity but higher than all other fuels.

So what makes electricity an attractive option at all? As usual, the story on electric heat is a little more complicated than the cost of a million BTU. While it’s undeniable that you pay much more per million BTU with electric heat, you need many fewer BTU with a highly efficient heating and cooling system, especially if you’ve also sealed air leaks and improved the insulation in your home.

On one hand, the relatively low cost of natural gas is good for consumers. On the other hand, it takes away the incentive to improve a home’s “thermal envelope.” That term describes a home’s ability to retain conditioned air inside, while the temperature outside is significantly higher or lower. With a leaky thermal envelope, it makes sense to use the least expensive fuel possible, because you’re going to need a lot of it to stay comfortable!

Your thermal envelope goes beyond insulation in the attic and walls. It also includes sealing the windows and doors, the electrical outlets, the ductwork, making sure the roof and exterior walls are in good shape, weather-stripping the doors and caulking openings to ensure that outside air and moisture don’t enter the home.

Next to air leaks, duct losses are the biggest “losers” of energy in your home. By switching to a ductless system, you can eliminate duct losses altogether and reduce your utility costs!

Improving your thermal envelope pays big dividends year-round. In all seasons, it keeps unconditioned outdoor air out of your home. In the winter, these improvements seal in the heat. In the summer, they seal in the cool air, allowing you to reduce utility costs better than you would with inexpensive but inefficient systems.

If you’d like more information about reducing your utility costs by switching to high-efficiency ductless heating and cooling, please give us a call at New England Ductless at (781) 995-2665. We can show you how to take advantage of exceptional rebates on ductless heating and cooling systems, and improvements to your home’s thermal envelope.