Heating by the Numbers:
What Can You Afford?
To see if staying with your current fuel, or making a change makes more sense, I compare fully automatic, thermostat-controlled heating options, ones requiring no human involvement other than periodic replenishment of bulk fuel storage. (Thus I do not consider heating with firewood.) Every house is different, however, using the example of a Midcoast house with a heat load of 150 million BTUs (44,000 kWh) per winter, one can compare systems based on the following nationwide costs for 1 million BTUs of heat: $28.99 (oil), $32.77 (K-1 kerosene), $32.11 (propane), $15.15 (wood pellets), $14.64 (air-source heatpump) and $10.70 (earth-coupled (geothermal) heatpump). Thus the cost of 150 million BTUs is $4,349 (oil), $4,916 (K-1), $4,817 (propane), $2,273 (pellets), and $2,196 and $1,605 respectively for electric power driven air-source and geothermal heatpumps.
Fuel costs fluctuate near term, but historically they have been rising at the annual rate of 6.8%. Factoring in this and a one time 6% electric rate rise after 5 years, the 10-year cumulative heating costs turn out to be: $59,523 (oil), $67,283 (K-1), $65,928 (propane), $31,110 (pellets), $22,620 (air-source heatpump), and $16,530 (geothermal heatpump).
For oil, K-1 and propane let’s assume a well-functioning heating system requiring no capital outlay over the next 10-years. However, to convert to any of the other options, a one-time investment will be required. I estimate $16,800 for a pellet-fueled boiler, $5,360 for a “mini-split” air source heatpump and $28,600 for a geothermal system (including drilled wells). These investments bring our ten year cumulative heating cost to $47,910 for pellets, $27,980 for the air source heatpump, and $45,130 for the geothermal system.
Adding solar panels to generate enough electricity to drive the two heatpump systems will permanently reduce the (electric) heating bill to $0, but will require a one time investment of around $17,200, bringing the 10-year cost of heating with the air-source heatpump to $22,560 and the geothermal+solar system’s to $45,800. However, there are incentives to consider as well: a 30% federal tax credit (in effect until December 31, 2016) will bring the cost of the solar panels down to $12,040. A $5,000 Efficiency Maine rebate will reduce the cost of the geothermal system to $23,600. There is also a $5,000 rebate on converting to wood pellets, reducing that investment to $11,800; and a $500 rebate on conversion to an air-source heatpump.
All told, the ten year cost of our heating options shape up like this: remaining on oil $59,523; K-1 $67,283 and propane $69,428. Converting to wood pellets: $42,910; to an air source heatpump: $27,480; to a geothermal heatpump: $40,130. To run an air source heatpump with solar generated electricity will cost $16,900 over 10 years; and a geothermal heatpump with solar generated electricity: $35,640. Investing in solar panels during the Solarize CLC campaign, will further reduce the cost of solar for all participants (FMI solarizeclc.com).
Which of these options is the best deal for you?