Comparing the costs of common heating fuel


Dan Vivian, a registered energy auditor, will be at the Smartnet Sustainability Showcase at Lansdowne on September 23.  Photo: Theshlen Nidoo

By Dan Vivian and Cecile Wilson

[Atmospheric CO2 near Mauna Loa, Hawaii on 27 August 2023: 419.38 ppm]

In June, we compared the greenhouse gas (GHG) output of various residential fuels in Ontario and discussed some of its impacts. In this article, we are going to show that low carbon heating (a combination of solar electricity and a heat pump) is less expensive over its lifecycle than natural gas.

Obstacles to comparison

It can be difficult for the layperson to compare the costs of various heating fuels. For instance, we buy electricity in dollars per kilowatt, fuel oil and propane in dollars per litre and natural gas in dollars per cubic metre. To make equivalent comparisons, we are expressing all costs in this article as dollars per gigajoule. 

“Whoa!” you say, “What is a gigajoule?” A gigajoule is a metric unit of energy. You may be familiar with the prefix giga meaning “one billion.” A joule is a unit of energy so small that it is measured in billions of joules. For example, 30 litres of gasoline will produce about one gigajoule of heat when burned.  

In addition to different ways of measuring heating costs, there is another issue that further complicates cost comparisons. Solar power is free but solar panels are not. This means that to allow an equivalent comparison of solar energy costs to other types of energy used for heating, we also need to include the costs of the heating appliances (such as furnaces) required by those other energy sources. This allows us to produce a more accurate assessment of the lifetime costs of the fuels. 

Source: Dan Vivian

The lifetime costs of heating fuels

Below is a graph showing the cost of various fuels in dollars per gigajoule over the life of the heating equipment.

Source: Dan Vivian

You can see that some fuels significantly outperform others in terms of the direct costs we pay (note: direct costs do not include the significant environmental and social costs of using fossil fuels). Clearly, fuel oil is very expensive (and it is highly polluting; see the June Glebe Report article on the GHG outputs of various fuels and the impact of GHGs). Natural gas is the most common fuel for heating in Ontario because it has the least expensive direct cost. Other common fuels (propane and electric resistance heating) lie in between. 

People can be reluctant to use solar power because of the high initial costs of installing solar panels. Typically, solar panels and their installation for a 2,000-square-foot house cost around $25,000. The initial outlay, however, is offset over the life of the solar panels by the free solar power. Put another way, the lifetime costs of the energy are paid upfront when using solar panels. 

Electric resistance heating is about three times more expensive than natural gas. However, if you use a heat pump, in Ottawa you can expect to significantly reduce your consumption of electricity. Heat pumps work by gathering free environmental energy. They operate like refrigerators, which pump heat out of the cold ice box to the back of the fridge in your kitchen. Similarly, a heat pump extracts heat from the outdoors and pumps it into the house, even when it is below zero outside. In this way, a heat pump only requires about 40 per cent of the annual electricity used by electric resistance heating.

A winning combination

Using a heat pump alone is not enough to beat the direct cost of natural gas. However, when combined with solar power, whose costs are 60 per cent of that of electric resistance heating, the total heating costs are comparable to, or a little cheaper than, the cost of natural gas heating over the life of the equipment. As a bonus, heat pumps and solar panels produce a fraction of the greenhouse gases that natural gas does (approximately four per cent of that of natural gas in Ontario and even less in Quebec). 

In our next article, we’ll discuss the most opportune time for a homeowner to switch to a heat pump and solar panels and discuss government programs available to help the homeowner make this transition.

Dan Vivian is a mechanical engineer and the principal of Building Science Trust Inc. He will be at his booth at the Smartnet Sustainability Showcase on Saturday, September 23, 10 a.m. – 4 p.m., at the Horticulture Building at Lansdowne. 

Cecile Wilson is a Glebe resident interested in climate change, social justice, sustainability and discourse.

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