How to Compare Different Heating Fuels

Contact: Scott Sanford, 608-262-5062,

At this time of year when the energy bill arrives after the first shot of cold weather, there is often grumbling about fuel costs and wondering if there is a less expensive option.

“Unfortunately, it’s not always easy to compare different fuels because they contain different amounts of energy, different units of measure and the thermal efficiency of the heating appliance used may also be different” said Scott Sanford, University of Wisconsin-Extension Agriculture Engineer at UW-Madison.

To compare energy types, the amount of heat – or usable energy – needed must be determined. To do this you will need:

  • The amount of energy purchased for at least one year; preferably 2 years (review previous year’s energy bills or contact the supplier)
  • The fuel cost – not including fixed costs such as tank rental or meter fees
  • The thermal efficiency of the heating appliance (often found on the name plate of the appliance or contact the manufacturer. Heating appliances older than 20 years may have lost some of their name plat efficiency and should be de-rated by 2-5 percent.)

The usable energy is measured in Btu and is determined using the following equation:

Usable energy (Btu) = Units of Energy Purchased x Energy Content per Unit x Appliance Efficiency

The energy content can be determined from Table 1 for common fuel types or contact your energy supplier. The appliance efficiency is used in the equation as a decimal (example 80% = 0.80).







Example Calculation:

A greenhouse uses 2456 gallons of heating oil from February to April using a furnace with a name plate input of 300,000 Btu/hr and output of 240,000 Btu/hr. What is the usable energy?

First calculate the appliance efficiency as follows:

Efficiency = Output energy divided by Input energy = 240,000 Btu/hr divided by 300,000 Btu/hr = 0.80

Usable Energy = 2456 gallons/yr x 138,000 Btu/gallon x 0.80 efficiency = 271,142,400 Btu/yr

If the greenhouse was heated with LP gas instead of heating oil, how much LP gas would be used. A new high-efficiency unit heater with a nameplate efficiency of 93% would be purchased.

Solving equation above for the Units of Energy Purchased:

Units of Energy Purchased =                        Usable Energy____________  

Energy content x appliance efficiency

Units of Energy Purchased =        271,142,400 Btu ____  = 3183 gallons of LP gas

91,600 Btu/gallon x 0.93

While it takes more units of LP gas to heat the greenhouse than heating oil, it’s not the amount that matters but the total cost. The price of heating oil is $2.49 per gallon while the price of LP gas is $1.59 per gallon for LP gas.

Total cost = unit cost x amount used

Heating oil cost = $2.49/gallon x 2456 gallons/yr = $ 6115/yr

LP gas cost = $1.59/gallon x 3183 gallons/yr = $ 5061/yr

In this example, it would cost $1054 less per year in fuel costs if the greenhouse was heated with LP gas. The cost savings would be used to pay for a new LP gas appliance to switch fuel types. A new high-efficiency unit heater (93% efficiency), with approximately the same output of energy, sells for $3750 installed. Is this a worthwhile investment? A quick way to see if an investment is worthwhile further consideration is simple payback which is the number of years it will take to payback the investment cost from the annual savings from making the investment. For this example, the simple payback is:

Simple Payback = Investment cost divided by Annual savings = $3750 divided by $1054 = 3.6 years

The fuel savings from 3.6 years of operations would pay back the cost of the unit heater. Is this a good investment? The new heater has a life of 10 plus years so after 4 years there will be an extra $1056 that can be invested elsewhere. This would be approximately equal to getting a 25 percent interest rate on money in a savings account. Since that is much higher than typical interest rates, this is a really good investment.

“Many people would like to consider cord wood or wood pellets as an alternate energy source,” Sanford said.

The energy content of wood varies with the species or mix of species and moisture content. The moisture content of wood should be less than 20 percent. A mix of hardwood species (oaks, maple, hickory, beach) will have a higher energy content than soft wood species (box elder, poplar, ash) mainly because it has a higher density (heavier per volume). All wood has an energy content of about 8000 Btu per pound at a moisture content of 20 percent. The energy content of wood pellets will be listed on the bag and is generally about 8000 to 8200 Btu per pound. The energy efficiency of wood combustion appliances varies greatly. Older outdoor wood boilers (Hydronic heaters) may be as low as 20 percent efficient while new EPA certified units could be as high as 75 percent efficiency. The efficiency of wood pellet appliances can range from 78-85 percent for a standard unit to over 90 percent for a high-efficiency unit. The best place to find efficiency values for all currently available wood burning appliances is the EPA Burn Wise website (  If you are comparing an older (before 2010) outdoor wood boiler, an energy efficiency of 40 percent would be representative of the boilers on the market at that time. If considering switching from a fossil fuel to cord wood, the labor for refueling needs to be considered as part of the annual cost and subtracted from any estimated fuel savings.

If you are considering switching to cord wood and cutting your own firewood and find the economics are marginal, one could consider the option of cutting and selling the firewood that you would need to heat your structure to others and using the proceeds to pay your current energy bills. This option has the advantage of no investment in an appliance but generates income to offset your energy bill while providing exercise and the heat generated from cutting and handling wood that many people enjoy.

Based on the current cost of different fuel types, if you are using natural gas for heating, it will be the least expensive option provided you’re using a high-efficiency heating unit. Any new natural gas or LP gas heating appliance should have an efficiency of 90 percent or higher (typically vented with PVC pipe). If not, replacing the heating appliance with a high efficiency unit may be a better investment than switching fuel sources.

For more information on using wood for heating visit

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