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home heating costs

Answers to your heating questions

Many of you are concerned about the rising cost of heating your home, and we have been getting questions about using electricity to help reduce those costs.  Here are some of the most frequently asked questions, along with answers and advice to help you make the best decision for your heating needs.

Question:  With the cost of oil going up so much, I want to switch to electric heat.  Is it less expensive to heat my home with electricity than with oil?

Answer:  Based on prices as of January 5, 2009, heating a home with oil is less expensive than heating a home with baseboard electric heat.  For example, a home that burns 800 gallons of oil for heating would use about 25,300 kilowatt-hours with electric baseboard heat to produce the same amount of heat.  The cost would be about twice as much as oil heat for a typical boiler or furnace.

Question:  At what price for oil would it cost the same to heat my home with either electricity or oil?

Answer:  If oil costs $4.95/gallon, then it would cost as much to produce the same amount of heat with electricity as with oil, assuming current electricity prices and the average efficiency  of an oil furnace or boiler

Question:  What is the difference between heating my home with oil vs. electricity?

Answer:  Both electric and oil systems can provide a home with sufficient heat and keep you comfortable.  Electric baseboard heat typically has a separate thermostat for each room.  This can make it easier for you to save energy by turning down the thermostats and use less heat in rooms when it's not needed. 
Oil-fired heating systems usually have thermostats that control the heat for several rooms, or even just one for the whole house.  So to increase the temperature in one room, you also end up increasing the temperature in rooms where it's not really needed, which wastes energy. 
Another way to add extra heat to one room without turning up the thermostat is to use an energy-efficient portable electric space heater.

Question:  How can I calculate the cost to heat my home with electricity, and compare it to the cost of heating with oil?

Answer:  Calculating the amount of energy needed to heat a home requires a complex, detailed analysis called a heat loss analysis.  Every home is different, and lots of factors can affect heating costs, so it's hard to estimate what it might cost to heat your home this winter.  Contact a Certified Energy Auditor to get an estimate for your home. 

Based on information from the Energy Information Administration (EIA), part of the federal Department of Energy, it is possible to convert gallons of oil used into kilowatt-hours of electricity.  For example, a home that uses 800 gallons of oil for heating would use about 25,300 kilowatt-hours to produce the same amount of heat.

To view a table that compares the costs for different heating fuels, click here.

To view and use the complete EIA spreadsheet click here.

Question:  How much does it cost to run a portable energy-efficient electric space heater?

Answer: Use the simple steps below to calculate the cost.

  1. Determine the wattage of the electric space heater
  2. Divide the wattage by 1,000 to convert to kilowatts (kW)
  3. Determine the number of hours per month your electric space heater is on (remember: appliances like space heaters cycle on and off to maintain a certain temperature)
  4. Multiply kW (your answer from part 2) by hours (your answer from part 3)
  5. Multiply the total kilowatt-hours (kWh, your answer from part 4) by the current residential price of $0.155

Question:  How do I decide when it makes sense to use an electric space heater instead of just turning up the thermostat?

Answer:  At prices as of January 5, 2009 it costs about twice as much to get the same amount of heat from electric resistance heat than it does from an oil-fired system.  So if the area that needs extra heat is less than about half the size of the total space heated by turning up the central heat, it would actually be less expensive to use an electric space heater instead.

Click here for more information about portable electric space heaters.

Question:  I want to completely stop using oil to heat my house, but don't want to have an electric heat system installed.  Can I just use several portable electric space heaters to heat my home?

Answer:  Although you can save money by using electric space heaters to supplement your central heating system, it would most likely cost more to use portable electric space heaters as your only source for heat.  Plus, water pipes that run throughout your house could freeze where there are no electric space heaters, and larger rooms are harder to heat up using only an electric space heater.

Click here for more information about electric space heaters.

Question:  Are some space heaters more efficient than others?  Which one do you recommend?

Answer:  All electric space heat, both portable and hard-wired, is considered 100% efficient.  That means all the electric heat you pay for goes into the space you want to heat.  With oil-fired systems, some of the heat goes up the chimney when the oil is burned.

There are a few different types of portable electric space heaters.  Click here to view our fact sheet, which can help you decide what type of portable electric space heater is right for you.

Question:  I heat my water with oil.  Should I switch to an electric water heater?

Answer:  At prices as of January 5, 2009, virtually all oil-fired water heating systems cost less to operate than electric.  However, the operating cost for an electric water heater is about the same now as a propane-fired one.  If you only use propane to heat your water and not for space heating as well, electric water heaters can be less expensive than propane-fired ones, as the price for lower volumes of propane is usually higher.

To estimate your kilowatt-hour use for heating water with an electric water heater, go to our online energy calculator and page down to the water heater section.

Click here for more information on electric water heaters.

Question:  Are some electric water heaters more efficient than others?  Which one do you recommend?

Answer:  Electric water heaters are all very efficient.  The minimum energy factor for a 40 gallon tank is .92 per standards set by the Federal Department of Energy.  Electric water heaters today are well-insulated and have other energy-savings features.  Water heaters with higher energy factors will cost less to operate.  Some water heaters have longer warranties than others, which is another factor you can consider when comparing brands.

Click here for more information on electric water heaters.

Question:  I've heard that I can save money with a tankless on-demand electric water heater.  Is that true?

Answer:  Compared to the least efficient new electric tank type water heater sold today, the savings from a tankless water heater are fairly small.  For an average customer at current electricity prices, the savings are about $4.00 a month.  If you purchase the most efficient electric storage water heater, the potential savings would be even less.  A tankless water heater lowers the standby losses, but it does not lower the cost of heating the water that is actually used.

Also, tankless water heaters are more expensive to purchase and install.  In fact, it may be necessary to upgrade your electrical service to the power draw from an electric tankless water heater.


more information

Download either one of the fact sheets below to find out more about these products.

Electric space heater fact sheet

Electric water heater fact sheet 


cost calculators 

Click here for a more detailed spreadsheet created by the Department of Energy to help compare the cost of heating with electricity vs. oil.

Click here to view a table that compares the costs of different heating fuels.


Bundle Up

Have contractors install energy saving features such as extra insulation for pipes and water heaters, energy efficient shower heads, and faucet aerators.  Or, do it yourself!  We’ll send you the kit.  We have a Bundle Up program that’s right for you.