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Personal: Residential

Selecting Your Energy Source

Before you decide which energy source is right for you, think about a number of factors, including energy availability, cost of the equipment and the environment.

The major energy source options for home heating are:

  • natural gas,
  • oil,
  • propane,
  • electricity
  • wood.
  • a combination of these energy sources, or
  • alternatives, such as solar energy.

Energy Availability

Not all energy sources are available in all areas of Canada. Electricity and heating oil are generally available in most places, but natural gas, which must be delivered by pipeline, is not available in much of the Atlantic region or in many rural and remote areas. Propane is available in most parts of Canada and may be used in rural or cottage areas as a substitute for natural gas or fuel oil, although often at a significantly higher operating cost. In many areas, wood is a cost-effective complement to a conventional heating system. Check with your local fuel supplier and gas or electrical utility to find out which energy sources are available in your area.

Cost of the Equipment

For most homeowners, the major factor in the home heating decision is cost. This involves two major components – the purchase price of the installed heating system and the annual operating cost for energy. You should also consider other factors, such as maintenance costs, cleanliness and noise of operation.

Purchase Price

The cost of purchasing a heating system can range from as little as $1,000 for baseboard heaters for a small house to as much as $12,000 or more for a ground-source heat pump for a larger home. Because of their apparently low initial cost, electric baseboard heaters are used in the majority of electrically heated homes in Canada. As electricity rates have risen, so has the annual cost of using electricity as the primary heat source in a home.

Heating contractors and utility representatives can give you an estimate of the purchase price of various systems. Always ask for a firm, detailed quotation before you authorize any work. Once the system is installed, it is fairly difficult and costly to convert to a different energy source and heat distribution system.

You may have to pay a higher price at first for a more efficient product, but it could be your best choice. A more efficient system can save you money every time you heat your home, and these savings increase as fuel prices increase over the life of the heating system.

Installation Costs

Installation costs for heating systems, depending on whether they are new or retrofitted, might include some of these items:

  • Hookup to gas lines or electric power lines
  • Cost of upgrading to 200-amp service for electric heating
  • Storage tanks for oil or propane
  • Heating equipment (furnace, boiler, baseboard heaters, heat pump, etc.)
  • Chimney or venting system
  • Ducting system or pipes and radiators
  • Trenching or drilling for earth-energy systems (ground-source heat pumps)
  • Thermostats and controls
  • Labour

Operating costs

The operating or fuel cost of a heating system is determined by three major factors:

1. Annual heating load or heating requirements of the house.

This depends on the climate, the size and style of the house, insulation levels, airtightness, the amount of useful solar energy through windows, the amount of heat given off by lights and appliances, the thermostat setting and other operational factors. Together, these factors determine how much heat must be supplied by the heating system over the annual heating season. This number, usually expressed as MJ, kWh or Btu per year, can be estimated by a heating contractor, home builder or utility representative or EnerGuide for Houses Representative.

2. Choice of energy source and its unit price.

Each energy source is measured and priced differently. Natural gas is priced in cents per cubic metre (¢/m3) or dollars per gigajoule ($/GJ), oil and propane in cents per litre (¢/L), electricity in cents per kilowatt hour (¢/kWh), and wood in dollars per cord. You must consider the heat content of the various energy sources to determine the most cost-effective energy source for your area. Check with your local utility or fuel supplier for the price of the energy sources in your area.

Table 1
Energy Content and Local Price of
Various Energy Sources
Energy Soure Energy Content Local Unit Price
  Metric Imperial  
Electricity 3.6 MJ/kWh 3 413 Btu/kWh $0._____ /kWh
Oil 38.2 MJ/litre 140 000 Btu/gal (US) $0._____ /litre
Natural Gas 37.5 MJ/m³ 1 007 Btu/ft³ $0._____m³
Propane 25.3 MJ/litre 92 700 Btu/gal (US) $0._____litre
Hardwood* 30 600 MJ/cord 28 000 000 Btu/cord _____$/cord
Softwood* 18 700 MJ/cord 17 000 000 Btu/cord _____$/cord
Wood Pellets 19 800 MJ/cord 20 000 000 Btu/cord _____$/cord

Conversion: 1000 MJ= 1 gigajoule (GJ)

* The figure provided for wood are for a "full" cord, measuring 1.2m x 1.2m x 2.4m (4 ft. x 4 ft x 8ft.

3. Equipment efficiency

The seasonal efficiency with which the equipment converts the energy source to useful heat in the home is also an important factor in the heating cost equation. For example, if a furnace has an annual fuel utilization efficiency (AFUE) of 80 percent, then 80 percent of the fuel is converted to usable heat in the home. The other 20 percent is lost, mostly up the chimney, and additional fuel must be consumed to make up for these losses. Improving the efficiency of the heating equipment reduces energy use and operating cost.

Heating load + Fuel choice + Equipment efficiency = Annual cost of heating

Heating Cost calculator – calculations for various energy sources and technologies.

When choosing a new heating system, it is important to buy a product that offers the best possible quality/price ratio within the limits of your budget.

In the end, to make the best financial decision, a homeowner thinking about a new heating system must balance the cost of purchasing and installing against the operating cost, taking into consideration how energy prices might change in the future. Since annual operating costs are significant, an investment in high-efficiency equipment is often the wise choice.

The Environment

The effects of energy production and consumption play an important role in many of today's key environmental problems. Exploration for and extraction of fossil fuels in fragile ecosystems, spills and leaks during transportation, urban smog, acid rain and climate change can all adversely affect our environment. Each form of energy has a different impact at various points in the energy cycle. No form of energy is completely harmless, although the environmental impacts of some sources, such as passive solar energy, are relatively low.

It is within your power to select the cleanest energy source available, but the choice can be complex, depending on where you live in Canada. Heating your home affects the environment in different ways, whether from gases leaving the chimney, emissions at coal- or gas-fired electricity-generating stations, or flooding at a remote hydroelectric site. The overall environmental impact is determined by the amount and type of fuel your heating system uses.

The combustion of natural gas, propane or fuel oil in your furnace releases various pollutants into the local environment. Electricity may be cleaner at the point of use, but it has environmental impacts at the point of generation. In Alberta, Saskatchewan, Ontario, New Brunswick, Newfoundland and Labrador, Nova Scotia, and Prince Edward Island, coal or heavy oil is burned to meet electricity demand during the winter. In British Columbia, Manitoba and Quebec, where winter peak demand is met by hydroelectric power, the environmental impact is much less obvious. However, in some instances, emissions of methane (a greenhouse gas) can be high in hydro dam projects. Nuclear power has its own set of environmental problems.

In short, there is no easy solution, but you can make a major contribution to reducing energy use along with the impact on the environment.

  • Buy the most efficient system with the most appropriate energy source for your area
  • Improve your home's insulation and airtightness (while ensuring proper ventilation)
  • Maintain your heating system
  • Install programmable or setback thermostats
  • Improve your heat distribution system.