Now it’s time to choose the most cost-effective heating fuel.
Pennsylvania temperatures are getting colder and the leaves have fallen off the trees, putting our winter heating season in full swing.
And of course that means heating costs.
Energy specialist Dan Ciolkosz explains that the war in Ukraine combined with post-pandemic inflation has the potential to have a double impact on heating bills this winter.
So, as we slip into hot cocoa season, it may be worthwhile for you to take another look at your heating options so you’re ready to keep yourself and your loved ones warm. Here are some key points to consider when considering your heating needs.
Prices have risen across the board, with some sectors hit harder than others. Consider the following rough estimates of how heating oil prices will develop from 2021 to 2022.
Heating oil was $3.12 a gallon in 2021 and today it’s $5.43, up 74%. Propane was up just 3% from $2.90 a gallon to $2.97. Electricity rose 21% over the past year from $0.137 a kilowatt-hour to $0.166.
Natural gas rose 13% to $23.26 over the same period, from $20.54 per thousand cubic feet (kcf). Wood pellets rose from $5.79 a bag to $6.58 over the past year, a 14% increase. Cordwood is up 12% from $235 per cord to $264.
In summary, all heating fuels have increased in price compared to last year, but the magnitude of the increase varies widely.
Propane is up the least, which could be good news for propane users, but heating season is just getting started.
Heating oil often has the widest variety of fuel prices, and we’re seeing that here, up 74% year-over-year.
Both natural gas and biomass show more moderate price increases of 12-14%.
Electricity is in the midst of a notable price rebound, up an average of 21% in Pennsylvania after many years of stable prices.
If you are lucky enough to have more than one source of heat for your home or business, you are able to choose the most economical fuel and save some money this winter.
If we compare the fuels listed above in terms of cost per amount of heat, we see that some fuels offer “better bang for the buck” so to speak.
Heating oil is the most expensive option at $5.43 per gallon at $52.77 per million British Thermal Units. Electricity at $0.166 per kWh costs about $47.05 per million Btu. Propane at $2.97 per gallon is next at $38.27 per million Btu, followed by natural gas at $23.26 per kcf and $26.60 per million Btu.
Wood pellets at $6.58 per bag are the second cheapest at $24.97 per million BTU. Cordwood at $264 per cord is the best at $17.38 per million Btu.
Based on this, it appears that cordwood could be the lowest-cost heating fuel this year, followed by wood pellets and then natural gas. Heating oil is the most expensive option listed.
Even though propane hasn’t shown a major cost increase this year, it still remains one of the more expensive fuels when considering the cost per amount of useful heat.
The difference between the most expensive and the cheapest fuel is quite dramatic. If you switch from heating oil to cordwood, the current saving is about 67%!
While electricity is on the pricier side, those of you lucky enough to have a heat pump can use that heat pump to triple or even quadruple the effectiveness of that electricity in providing heat, making this option very cost-effective .
Keep in mind that both cordwood and pellets require some work on your part to use, which needs to be factored into your decision.
Note that the above costs are national averages. If you want to analyze the relative equivalent cost of fuels based on your local prices, Penn State’s Energy Selector (extension.psu.edu/online-energy-selector-tool) can help.
If you can’t choose your heating fuel, there are still things you can do to keep the heating season affordable this winter. In fact, one of the most cost-effective ways to reduce your heating bills long-term is to improve insulation and reduce drafts by sealing cracks around doors and windows.
The cheapest way to save on heating bills is to be a little stingy with your temperature settings this winter. Unpack your favorite sweater and enjoy the fresh air inside and out.
And make sure you turn the thermostat down when you’re not home, and possibly at night too. Some people find turning the thermostat down at night but using electric blankets to stay cozy is a good strategy that ultimately saves energy and cuts costs.