Home heating Costs by Fuel Type

Getting a good handle on heating costs is not easy because the different types of fuels all use different metrics.  How do you compare the cost of something in one metric such as fuel oil which is measured in gallons with something like corn pellets which are measured by the ton.  Fortunately the government has made this easy for you.  They have created a chart which shows heating costs using a common measure, British Thermal Units (BTU's). By using this chart you can determine the cost of heating in Millions of BTU's.  That then allows you to compare costs between all fuel types. 

What's particularly nice about the chart below is that it also takes into account the type of home heating appliance you use.  For example, it compares the cost of heating using electricity for both a furnace or for a geothermal heat pump.  Since the geothermal heat pump is far more efficient it has much lower costs. 

A number of things have changed since we last updated this chart.  Noticeably the price of Fuel Oil has dropped considerably but still remains a rather expensive heating option at a cost of $21.81 per million Btu.  Current pricing trends suggest oil, propane and natural gas prices are more likely to go up then down in the near future. There have also been some interesting changes relative to biofuels.  Corn prices have dropped significantly and now the cost of corn kernels is less than the cost of wood pellets.  So if you have one of those pellet stoves that use either pellets or corn, right now prices favor using corn. 

What's your cheapest option?  Depends on how you feel about harming the environment.  Electric heating using a geothermal heat pump is one of the best options ($10.26 per million Btu) because heat pumps are so incredibly efficient.  A coal furnace is also a cheap way to heat at $10.67 per million Btu but is a non-renewable fuel which is the most harmful to the environment.