How to Calculate Heating Efficiency and Fuel Costs

How to Calculate Heating Efficiency and Fuel Costs

Learn how to calculate heating efficiency for your non-electric heating systems.

Hannah Bastawrose (Seeger)
Hannah Bastawrose (Seeger)
3 min read • Last update March 2023

This article focuses on calculating efficiency for non-electric home heating systems. Oil, gas, and natural gas systems have their own set of rules and jargon. See our other article for more on energy efficiency and how to calculate it.

What are Therms & CCF?

Let's begin with your utility bill. You may be looking at it and wondering, "What's a Therm?" or "What's a CCF?"

CCF stands for Centum Cubic Feet and is a unit for volume. It is equal to one hundred cubic feet and may also be abbreviated to HCF. It is also equal to 748 gallons.

Therms are a unit used for natural gas energy usage over time. It is equal to 100,000 Btu. 

What is Annual Fuel Utilization Efficiency (AFUE)?

Your boiler may have an efficiency rating of AFUE which stands for Annual Fuel Utilization Efficiency. Like the other efficiency ratings we have looked at so far, this one is not much different. You have the heat output in Btu in the numerator and the energy input in Btu in the denominator. The acronym is used to clarify that this is for heating rather than cooling, and the fuel source is something other than electricity.

AFUE = Annual Heat Output (BTU) / Annual Energy Input (BTU)

What is Heating Seasonal Performance Factor (HSPF)?

HSPF is used for heat pumps specifically during the heating season. Heat pumps are a device that can heat or cool a space. It uses refrigerant and depending on which direction it is pumped, it can heat or cool. There is a separate acronym for heat pump heating because it uses electricity instead of fuel to run.

HSPF = Heat Output (BTU) / Electrical Energy Input (Wh)

Electric Coil Heating

We saved the easiest for last. The other type of heating you may have is an electric heater. Like the name suggests, it runs on electricity by using a conductive element that heats up, like a wire or coil. An electric coil heater converts 100% of the electricity into heat, yes that means it is 100% efficient! However, don't go running to the store to get an electric heater just yet. They are usually more costly to run for larger spaces. The heat is more concentrated and the unit demands more power than a heat pump or a gas furnace. 

There is no equation for electric coil heaters because it's 100%!

How do you compare systems that use different fuel types? 

The efficiency of the fuel itself needs to be considered. This is also known as combustion efficiency. During combustion, there is a percentage of how much of the fuel is converted into useful energy, how much is wasted heat, and how much is bi-products (also known as emissions).

Each fuel type has a different efficiency. Here are the most common conversions:

  • 1 gallon of finished motor gasoline (containing about 10% fuel ethanol by volume) = 120,238 Btu
  • 1 gallon of heating oil (with sulfur content at 15 to 500 parts per million) = 138,500 Btu
  • 1 cubic foot of natural gas = 1,039 Btu
  • 1 gallon of propane = 91,452 Btu
  • 1 short ton (2,000 pounds) of coal (consumed by the electric power sector) = 18,934,000 Btu

You can also find a fuel to energy conversion calculator on EIA.gov

If you are comparing two different system types that use different fuels, you will need to find the following values:

  • Cost of the fuel
  • Fuel Conversion Factor
  • Efficiency of the system

Let's give an example. 

You have a boiler that can run on either natural gas or oil. Using natural gas at $0.62/Therm, the boiler is 73% efficient. Using oil at $2.30/gal, the boiler is 77% efficient. 

Which fuel has the lowest operating cost?

Cost of Energy = Cost of fuel x Fuel Conversion Factor / Efficiency

Gas: ($0.62/Therm)(1 Therm/100,000 Btu)(1,000,000 Btu/1 MMBtu)(1/0.73) = $8.49 / MMBtu

Oil: ($2.30/gal)(1 gal/138,500 Btu)(1,000,000 Btu/1 MMBtu)(1/0.77) = $21.65 / MMBtu

Now that we have the cost of energy in the same units, it is easier to compare oil against gas. The cost of gas at $8.49/ MMBtu is less than oil at $21.65/MMBtu, and therefore has a lower operating cost. 

Gut Check

How do your bills compare against the average? What is a lot and what is a little?

Your heating bill in the winter months vary widely. Even averages on how much energy is used to heat a home changes from state to state, type of fuel, system efficiency, system type, and a handful of other factors. If you have a natural gas system, it is also used to heat the water in your home. It can be confusing and overwhelming to analyze your energy consumption.

However, we don’t want to leave you scratching your head. The easiest way may be to give another example to compare against. Below we used a 1,000 square foot space. Keep in mind that the larger the space you have for heating, the more energy will be required. If the outside temperature is colder, more energy is required. If you have a drafty house, you may be losing energy to the outside and using more energy. 

Benchmark Example:

You are looking to heat a space that is 1,000 square feet. The outside temperature is 30° F and the desired inside temperature is 68° F. Heating will be needed for 10 hours during the night. Below are the monthly expenses for a natural gas heating system and an electric coil heating system. The natural gas system has an efficiency of 83% and cost of $0.95/Therm. The electric system has an efficiency of 1 and a cost of $0.18/kWh.

  • Home is 1,000sf
  • Outside Temperature: 30° F
  • Desired Inside Temperature: 68° F
  • Heating is Required during 10 hours per day

Natural Gas system:

  • Heating System Efficiency: 83%
  • Cost of Natural Gas: $0.95/Therm
  • Heating Consumption per night: 0.61 Therms/night
  • Heating Consumption per month: 18.3 Therms/month
  • Cost of Heating per month: $17.35/month

Electric Coil Heating System:

  • Heating System Efficiency: 1
  • Cost of Natural Gas: $0.18/kWh
  • Heating Consumption per night: 14.8 kWh/night
  • Heating Consumption per month: 444 kWh/month
  • Cost of Heating per month: $79.96/month