How to Compare Heating Systems and Fuel Costs

Use the information below to estimate the cost of typical heating systems in Vermont. One MMBTU represents the same amount of heat added to a home, whether it is provided by electricity, natural gas, fuel oil, or wood.

Legend:

Central Heating Space Heating Oil Gas/Propane Cord/Pellet Wood Electricity
Baseboard Heater Electric
Baseboard Heater
Electric
[+]
×
Baseboard Heater
Electric
Discount
for qualifying efficient equipment
Purchase & Installation Cost
About $1,000-$2,000

Electric baseboard heaters use electric resistance technology. Baseboard heaters contain electric heating elements encased in metal pipes.

Smart Tip

If you currently use electric baseboard heat as a primary heating system, you can save on your energy bills by switching to energy-efficient cold-climate heat pumps. Find out more about our rebates on heat pumps in Vermont.

Expected Fuel Costs per MMBTUs for a New High-Efficiency System:

Fuel Type

Inefficient System

High-Efficiency System

Electric Resistance

n/a

$46.89

Air Source Heat Pump

19.51

$15.53

  • Homeowners choose these for their ease of installation and low up-front cost.
  • They can be used on a room-by-room basis for whole house heating or for supplemental single-room heating.
  • While these heaters can be inexpensive to purchase, they can cause very high electric bills. 
Boiler Gas or Oil
Boiler
Gas or Oil
[+]
×
Boiler
Gas or Oil
Discount
$500
for qualifying efficient equipment
Purchase & Installation Cost of a High-Efficiency Replacement
$6,000 - $10,000

Boilers heat water, and provide either hot water or steam for heating. High-efficiency versions of all types of boilers are currently available.

Smart Tip

Before buying a new heating system, consider improving the energy efficiency of your home with air sealing and insulation. You’ll likely be able buy a smaller heating system which saves on the initial price and on-going operating costs.

Incentives and financing are available to improve the efficiency of your home and reduce your fuel usage. Learn how to reduce your heating bills through the Home Performance with ENERGY STAR® program.

Expected Fuel Costs per MMBTUs for a New High-Efficiency System:

Fuel Type

Inefficient System

High-Efficiency System

Fuel Oil

$33.97

$31.23

Propane

$40.52

$34.12

Natural Gas

$18.50

$15.58

REPAIR OR REPLACE?

If one or more of the following are true, consider replacing.

  • It is more than 15 years old
  • It has an AFUE rating below 80%
  • It has a pilot light
  • It was converted to a different fuel from its original design
Boiler Pellet Wood
Boiler
Pellet Wood
[+]
×
Boiler
Pellet Wood
Discount
$1,000
for qualifying efficient equipment
Purchase & Installation Cost of a High-Efficiency Replacement
$15,000-$20,000

Pellet boilers are sometimes referred to as biomass systems. These systems are centrally located or are connected to a central heating system to replace or significantly offset other central heating system fuel use, such as oil or propane.

Smart Tip

Wood is consistently one of the lowest-cost ways to heat in Vermont. It is a local and renewable resource, making it an excellent choice for home heating. However, wood heat is not for every home; it requires some extra work (stacking, splitting, feeding the fire, etc.) and, of course, the space to store cord wood or pellets.

Expected Fuel Costs per MMBTUs for a New High-Efficiency System:

Fuel Type

Inefficient System

High-Efficiency System

Cord Wood

$15.01

n/a

Pellet Wood

$23.57

$22.18

Well-seasoned wood burns cleaner and optimizes the amount of useful heat energy gained.

Fireplace Gas
Fireplace
Gas
[+]
×
Fireplace
Gas
Discount
for qualifying efficient equipment
Purchase & Installation Cost of a High-Efficiency Replacement
About $3,000

Gas inserts are a more efficient alternative to space heating than wood fireplaces. Natural gas or propane fireplaces use newer heat-efficient technology.

Smart Tip

Use of gas inserts is convenient and a decent way to provide space heating for Vermont homes. Be sure to check with a professional installer to find the most efficient and reliable unit for your home.

Expected fuel costs depend on usage.

  • Gas inserts are available as vented and unvented units.
  • Unvented insert models have higher efficiency ratings because heat does not escape up a chimney, BUT they are a safety risk from combustion by-products such as carbon monoxide.
  • It is always safest to vent combustion appliances to the outside.
  • See safety guidelines from the U.S. Department of Energy.
Fireplace Wood
Fireplace
Wood
[+]
×
Fireplace
Wood
Discount
for qualifying efficient equipment

Wood-burning fireplaces are great for aesthetics and ambiance, but they typically lose more heat than they generate. Fireplaces waste large amounts of the heat generated by your central heating system by drawing in cold outdoor air through any leakage points in the house. Traditional wood fireplaces are best used when the central heating system is not needed.

Smart Tip

If you are drawn to the look of wood burning fireplaces, consider retrofitting with a high-efficiency fireplace insert. The insert functions like a wood stove, fitting into the masonry fireplace or on its hearth, and uses the existing chimney. A well-fitted fireplace insert is nearly as efficient as a wood stove.

Wood is consistently one of the lowest-cost ways to heat in Vermont. It is a local and renewable resource, making it an excellent choice for home heating. However, wood heat is not for every home; it requires some extra work (stacking, splitting, feeding the fire, etc.) and, of course, the space to store cord wood or pellets.

Annual fuel cost depends on usage and behavior

Furnace Cord or Pellet Wood
Furnace
Cord or Pellet Wood
[+]
×
Furnace
Cord or Pellet Wood
Discount
for qualifying efficient equipment
Purchase & Installation Cost of a High-Efficiency Replacement
About $5,000

Furnaces distribute heated air through a system of supply and return ducts—you've probably heard them called "forced hot air systems." Homeowners like furnaces because they can easily sync with central air conditioning systems, but ductwork needs additional maintenance to keep dust and debris under control.

Smart Tip

Furnaces have big opportunities to improve energy efficiency by upgrading ductwork. Ductwork for heating and cooling should always to be inside the thermal envelope. Any ducts that go up into an unheated attic, through the garage, or in exterior walls should be insulated and air sealed.

Expected Fuel Costs per MMBTUs for a New High-Efficiency System:

Fuel Type

Inefficient System

High-Efficiency System

Cord Wood

$18.92

$15.37

Pellet Wood

$29.18

$23.71

Furnace Electric
Furnace
Electric
[+]
×
Furnace
Electric
Discount
for qualifying efficient equipment
Purchase & Installation Cost
About $1,000

While the purchase price of electric furnaces is less than an oil or gas model, the higher cost of electricity makes all-electric furnaces or boilers an expensive choice as a primary heating fuel type.

Smart Tip

If you currently rely on an electric furnace as a primary heating system, you can save on your energy bills if you switch to an energy efficient cold-climate heat pump. Find out more about our rebates for cold-climate heat pumps in Vermont.

Expected Fuel Costs per MMBTUs for a New High-Efficiency System:

Fuel Type

Inefficient System

High-Efficiency System

Electric Resistance

n/a

$46.89

Air Source Heat Pump

$19.51

$15.53

Furnace Gas or Oil
Furnace
Gas or Oil
[+]
×
Furnace
Gas or Oil
Discount
$500
for qualifying efficient equipment
Purchase & Installation Cost of a High-Efficiency Replacement
$10,000

Furnaces distribute heated air through a system of supply and return ducts—you've probably heard them called "forced hot air systems."

Smart Tip

If you have a furnace, you have a big opportunity to improve energy efficiency by upgrading ductwork. Ductwork for heating and cooling should always be inside the thermal envelope. Any ducts that go into an unheated attic, through the garage, or in exterior walls should be insulated and air sealed.

Before buying a new heating system, consider improving the energy efficiency of your home with air sealing and insulation. You'll likely be able buy a smaller heating system which saves on the initial price and on-going operating costs.

Incentives and financing are available to improve the efficiency of your home and reduce your fuel usage. Learn how to reduce your heating bills through the Home Performance with ENERGY STAR® program.

Expected Fuel Costs per MMBTUs for a New High-Efficiency System:

Fuel Type

Inefficient System

High-Efficiency System

Fuel Oil

$33.97

$31.23

Propane

$40.52

$34.12

Natural Gas

$18.50

$15.58

Homeowners like furnaces because they can easily sync with central air conditioning systems, but ductwork needs additional maintenance to keep dust and debris under control.

Heat Pump - Air Source
Heat Pump - Air Source
Electric
[+]
×
Heat Pump - Air Source
Electric
Discount
up to $400
for qualifying efficient equipment
Purchase & Installation Cost of a High-Efficiency Unit
About $4,000 per unit

These units are also known as ductless heat pumps, mini-splits, or cold-climate heat pumps. Heat pumps extract heat from the surrounding air and “pump” it inside to heat your home; it can also be used in reverse for efficient air conditioning. These systems typically consume much less energy than traditional electric, propane, or oil heating systems. A typical home will require more than one unit or a multi-zone system to provide heat to the entire home.

Smart Tip

Heat pumps have gained popularity in cold climates like Vermont and they can be a good choice for many households, but not every home. Consulting a professional installer is recommended to get installation and operation costs to see if heat pumps are a good fit for your home. Learn more about cold climate heat pumps.

Before buying a new heating system, consider improving the energy efficiency of your home with air sealing and insulation. You’ll likely be able buy a smaller heating system which saves on the initial price and on-going operating costs.

Incentives and financing are available to improve the efficiency of your home and reduce your fuel usage. Learn how to reduce your heating bills through the Home Performance with ENERGY STAR® program.

Expected Fuel Costs per MMBTUs for a New High Efficiency System:

Fuel Type

Inefficient System

High Efficiency System

Electric Resistance

$49.99

n/a

Air Source Heat Pump

n/a

$16.52

Heat Pump - Ground Source
Heat Pump - Ground Source
Electric
[+]
×
Heat Pump - Ground Source
Electric
Discount
for qualifying efficient equipment
Purchase & Installation Cost of a High-Efficiency System
Between $25,000- $40,000

Ground-source, or geothermal, heat pumps extract heat energy from the ground or outdoor water for use in heating your home. These systems can be used to heat and cool your home as well as for water heating. A properly designed and installed geothermal system is more efficient than an electric or gas heating system and can provide all the required heating and cooling by the home.

Smart Tip

This heating source is an energy-efficient option for Vermonters, offering a significant reduction in heating costs, but they require a substantial initial investment. Find out more information on Geothermal heating at Renewable Energy Vermont.

Expected Annual Fuel Costs for a New High-Efficiency System:

Currently unavailable

Ground Source Heat Pumps are one of the most efficient heating options available. The heat energy used is actually solar energy stored in the ground that is removed by the heat pump. However, these systems use electricity to power the heat exchangers and controls. A professional installer can estimate the energy costs and help you determine if a ground source heating system is the right fit for your home.

Outdoor Boiler Cord or Pellet Wood
Outdoor Boiler
Cord or Pellet Wood
[+]
×
Outdoor Boiler
Cord or Pellet Wood
Discount
for qualifying efficient equipment
Purchase & Installation Cost of a High-Efficiency Replacement
About $8,000

Wood pellet boilers function much like oil and gas boilers, with fully automatic operation, and these systems can also include water heating and zoned control.

Smart Tip

Wood pellets are sustainable and renewable, and buying pellets that are made in Vermont means your heating dollars stay local. Burning wood can emit air pollutants. Higher-efficiency models usually have lower emissions. Look for woodstoves with an EPA certification sticker. Remember, systems that are located outside will have a reduced level of performance due to increased heat loss to the elements.

Expected Fuel Costs per MMBTUs for a New High-Efficiency System:

Fuel Type

Inefficient System

High-Efficiency System

Cord Wood

$30.75

$17.57

Pellet Wood

$31.61

$25.29

To maintain efficiency and safety, brush the heat exchanger clean every week and empty the ash bin regularly.

Space Heater Electric
Space Heater
Electric
[+]
×
Space Heater
Electric
Discount
for qualifying efficient equipment
Purchase & Installation Cost of a High-Efficiency Replacement
$20-$300

Electric space heaters are more expensive to operate than combustion space heaters, but they are the only unvented space heaters that are safe to operate inside your home. Although electric space heaters avoid indoor air quality concerns, they still pose burn and fire hazards and should be used with caution.

Smart Tip

If you've seen ads for products like Amish heaters or infrared quartz space heaters, be wary of claims that seem too good to be true. In Vermont, electricity is still one of the most expensive ways to heat. A portable electric space heater will increase your heating costs unless you turn your central heating system down and use the portable heater in only the room you occupy. A better approach is to make your central heating system work as efficiently as possible.

Expected Fuel Costs per MMBTUs for space heaters:

Fuel Type

Cost

Natural Gas (80% efficiency)

$18.50

Propane (80% efficiency)

$40.52

Fuel Oil (80% efficiency)

$33.97

Electric Space Heater (100% efficiency)

$46.89

  • Homeowners choose these for their low up-front cost and flexibility of placing the units in any room. 
  • While these heaters can be inexpensive to purchase, they can cause very high electric bills.
  • Safety is very important when using space heaters. See safety guidelines from the U.S. Department of Energy.
  • If you're buying a space heater, check the features and warranty to make sure you're getting the most energy-efficient model for your needs.
    • Buy one that is made to heat a room about the size that you plan to use it in
    • Compare wattages of similar models to see which uses less energy
    • Look for thermostat and timer settings—these can save energy and keep the room from being overheated,
Space Heater Gas or Oil
Space Heater
Gas or Oil
[+]
×
Space Heater
Gas or Oil
Discount
for qualifying efficient equipment
Purchase & Installation Cost
About $2,000

These heaters are also referred to as direct vent or vented space heaters. They are "spot" heaters that heat a single room or even the whole house if it's small, very efficient, or has an open floor plan.

Smart Tip

If you have a constant need for supplemental space heaters, you may have insufficient insulation and/or excessive air leakage that need to be addressed. Consider improving the overall efficiency of your home and you'll be more comfortable and save money on heating costs in the long run. Find out more about upgrading the efficiency of your home.

Expected Fuel Costs per MMBTUs for a space heater:

Fuel Type

Cost

Natural Gas (80% efficient)

$18.50

Propane (80% efficient)

40.52

Fuel Oil (80% efficient)

$33.97

Electric Space Heater (100% efficient)

$46.89

  • Homeowners choose these for their ease of installation, low up-front cost, and flexibility of placing the units in most rooms.
  • Space heaters tend to be less efficient than central combustion systems. If they are used to only heating portions of the home, they can sometimes cost less to operate when compared to a whole-home heating system.
  • Unvented models are a safety risk from combustion by-products such as carbon monoxide.
  • Safety is very important when using combustion space heaters. See safety guidelines from the U.S. Department of Energy.
Stove Cord or Pellet Wood
Stove
Cord or Pellet Wood
[+]
×
Stove
Cord or Pellet Wood
Discount
for qualifying efficient equipment
Purchase & Installation Cost of a High-Efficiency Replacement
About $5,000

Wood is a renewable fuel that generally costs less than fossil fuel options. Stoves come in a variety of sizes and capacities so the best stove for your home is the one that meets your needs for efficiency, heat output, and simplicity. Wood and wood pellet stoves can reduce the quantity of fossil fuel purchased.

Smart Tip

Wood is consistently one of the lowest cost ways to heat in Vermont. It is a local and renewable resource, making it an excellent choice for home heating. However, wood heat is not for every home. It requires some extra work (stacking, splitting, feeding the fire, etc.) and, of course, the space to store cord wood or pellets.

In most cases, wood burning stoves are less expensive to operate than electric resistance heating, oil, and propane-fueled heating systems. Well-seasoned wood burns cleaner and also optimizes the amount of useful heat energy gained.

Expected Fuel Costs per MMBTUs for a New High-Efficiency System:

Fuel Type

Inefficient System

High-Efficiency System

Cord Wood

$20.50

$15.37

Pellet Wood

$37.94

$24.63

For efficient and safe operation these stoves need to be maintained on a regular basis. Always follow manufacturer’s instructions for operations and maintenance, but here are some good rules of thumb;

  • Have a certified chimney sweep inspect the system every year
  • Clean out the inside of the stove with a wire brush periodically
  • Inspect catalytic combustors regularly
  • Inspect fans and motors regularly, and maintain them properly
  • Clean the flue vent on a regular basis 

In order to help compare systems, we have used the cost of heating fuel per MMBTU to standardize the cost of heating fuels:

MMBTU = US dollars per million BTU

Typical homes use approximately
60 to 90
MMBTU per year.

Other considerations that affect savings and are not represented here:
- house size
- weather tightness
- occupant comfort
- weather

This information is meant as a guide. Individual household costs may vary. You can get personalized home energy advice from the Efficiency Vermont customer support team. Contact us.

Find More In-depth Information about Heating Your Home in Vermont

More on fuel costs and new heating technologies.

3 Ways to Reduce Heating Costs

Evaluating your heating system is a good first step to reducing your heating bills, but there are other ways to save on heating. When you take control of how much heat you use in your home, you save more money.

Thermostats

Reduce your annual heating costs by as much as 15% by turning the temperature down 10º while you are asleep or away. If you don’t already have one, you can install a programmable or smart thermostat to do this for you.

Zones

Zones allow you to control the heat in each room, or in groups of attached rooms, using a system of thermostats. Heating zones allow you to regulate the temperature of individual rooms. With zones you can determine which rooms to keep cool (those you rarely or never use) and which to keep toasty (those you use often).

Air Sealing and Insulation

Cut air leaks and add insulation to reduce heating needs. Consider a whole home energy efficiency project to tackle the drafts and lack of insulation that cause your home to waste heat. In Vermont, incentives are available for completing a Home Performance with ENERGY STAR® project. Learn more about insulation and air sealing.