How our household is saving $2,400 a year on heating costs
Our 1970s bungalow, with about 1,800 square of feet of heated space, was being heated by a oil-fuelled furnace that was original to the house. The annual cost of heating oil was about $3,000. When we had an energy audit done in preparation for upgrades, we were told that $3,000 was not unusual for an old, inefficient oil furnace in an under-insulated house.
The auditor said that an air source heat pump would be the most cost-effective upgrade over the long run, even though it would be one of the most expensive options. Combine a heat pump (powered by electricity) with more insulation, he said.
We took his advice.
After two winter seasons, and well into a third, the cost of heating is down dramatically.
In 2012, it was around $600.
In 2013, it was around $500.
That’s a big drop from $3,000.
There’s no meter to measure the cost of heating at our house, so I calculated those costs by looking at July-August electric bills, when there is no heating. It was $106.98 in 2012 and $87.96 in 2013. To make the math easy, I subtracted $100 from each of the non-summer two-month bills in each year and totalled them.
Here’s the asterisk part. It cost a lot more to install the heat pump system than a new, more efficient oil furnace that would have also knocked down our heating costs by a lot. A natural gas furnace, another cheaper route, wasn’t an option because natural gas isn’t available in our neighbourhood.
The heat pump system project cost around $10,000, which included backup electric heat coils, adjustments to heating ducts, removal of the old furnace, and removal of a hefty oil tank from our basement. We also had to upgrade our electrical system, which cost around $5,500; that price included work not related to the heat pump. The heat pump cost was trimmed a little by a federal energy efficiency program grant of $500 and a provincial one of $1,500. Those grants are no longer available.
(As they say on the home improvement TV shows, your costs may differ because your situation is different, or you have a friend in the business who will give you a discount.)
Payback for the heat pump system is working out to just under four years. After that, the savings will be real.