When selecting a new heating system for your home, it may seem like energy efficiency and operating costs go hand-in-hand. After all, shouldn't a more energy-efficient system cost less to run? While this straightforward relationship might make sense at first glance, the actual relationship between energy efficiency and heating costs can be more complex in practice.

The reason for this complexity is the variety of fuels available to heat your home. Most Americans will have access to grid-based heating systems such as electric furnaces and heat pumps, as well as fuels such as natural gas, propane, and heating oil. Understanding which options will be the cheapest for you requires understanding how to compare their costs.

Electric Furnaces: High Costs, 100% Efficiency

The efficiency of a heating system measures how well it can convert its energy supply into heat for your home. When looking at furnaces, the AFUE (annual fuel utilization efficiency) ratio provides you with this information. However, you may notice something interesting: electric furnaces have an AFUE of 100%.

Because of how they operate, electric furnaces will convert 100% of the electricity they receive into heat for your home. However, they're often the most expensive option to run due to the cost of electricity. If you live in an area where winters are very cold, or electricity prices are very high, electric furnaces will often cost more to run despite their high efficiency.

Heat Pumps: High Upfront Cost, Huge Efficiency Gains

Surprisingly, your heating system can be more than 100% efficient. While this may sound surprising, it's a function of how heat pumps work. Heat pumps are essentially reversible air conditioners, which means they scavenge heat from the surrounding air and move it inside your home. Thanks to the magic of physics, moving heat is drastically more efficient than burning fuel to generate heat.

As a result, heat pumps run on electricity but are far more efficient than electric furnaces. Their higher efficiency means they can be cheap to operate on a month-to-month basis, even if electricity costs in your area are high. The downsides are that heat pumps will cost more upfront and can't always provide enough heat for extremely cold climates.

Natural Gas, Propane, and Heating Oil: Reliable, Cheap

Since natural gas, propane, and heating oil furnaces work by burning fuel directly in your home, they can never achieve the perfect efficiency of an electric furnace. However, in parts of the country where these fuels are available, their costs per BTU tend to be cheaper than electric heating. When combined with the low cost of a traditional furnace, these fuels are usually the cheapest option for cold climates.

The trade-off is that you're using a less efficient heating system that may be less environmentally friendly, depending on your local grid's energy composition. However, these options are reliable, provide enough heat for very cold climates, and often offer the cheapest overall operating costs.

To learn more, contact a heating service in your area such as Master Mechanical, Inc.