A Visual Cost Comparison of Heating Options for Your Home

Heating systems are vital especially for homes in colder climates. However, choosing the correct system for your home is probably more complex than you may think. While the purchase price is often one of the main factors to consider when making any big purchase, with heating, running costs and energy losses can create significant long-term expenses. Considering that heating accounts for about 42% of your energy bill, it makes sense that choosing the most efficient system should be a priority. We compare heat pumps, gas boilers, gas furnaces, electric furnaces, and electric boilers to help provide a balanced view of which option will be best for you.

What the Costs Look Like From the Start Line

The above graphic was created using a combination of Fixr’s cost guides and information from U.S. Energy Information Administration and The Census Bureau. Average costs were used for a 2,000-2,500 sq. ft. home and they can vary depending on your region. As most systems require specific skills for installation, the installation cost is often quite high, as you can see in the graphic, and should be considered in conjunction with the purchase cost, when comparing overall prices. In total, a heat pump, or geothermal system, is most costly to buy and install at $7,790. Next most expensive is the gas boiler but it’s nearly 30% cheaper coming in at $5,440 closely followed by a gas furnace at $5,240. The electric furnace is the second to cheapest option at $3,040 while the electric boiler is the cheapest option at $2,500.

Though the gas boiler is most expensive to buy at $3,500, the heat pump has the highest installation cost of $4,000, which nudged it to the top of the pile in terms of overall initial cost. The electric boiler had the lowest installation cost at only $350, however, the electric furnace came in with the lowest purchase price of $1,250.

Removal and disposal costs were also considered; if you are considering a new heating system, chances are you have to first remove your existing one. These costs are not extravagant, with all options coming in below $1,000, however, they should be considered as you can’t expect your garbage men to pick up your old system on their next round.

Costs to Be Considered Down the Line

As mentioned, the running costs of heating systems can be significant so apart from purchase costs it can be helpful to assess the various options in that regard. One way to judge efficiency is by calculating the Annual Fuel Utilization Efficiency (AFUE) rating, which measures the efficiency of the system when converting energy from its fuel to heat, taking exhaust/losses into account. Another factor to consider is the cost of the fuel itself, which varies according to location.

While the electric boiler came up most cost-effective in the initial cost comparison, it doesn’t fare so well when it comes to running costs. While the AFUE for an electric boiler is as high as 95 - 100%, the cost of the electricity is often prohibitive and is often double that of gas. Also, in colder climates, the water can freeze in the pipes and take a long time to heat up. That said, an electric boiler is suitable in milder climates, when heating is not needed for much of the year, or if you only want to heat a small, specific space. It is also safer than some other options, doesn’t require as much maintenance and it is a quiet option.

A step up from the electric boiler, is the electric furnace, while it is equally costly to run due to the energy source being electricity, furnaces don’t require water, so can’t freeze up. However, apart from expense, electricity is considered the least clean fuel. Considering the production of electricity traditionally requires burning fossil fuels, this leads to high air pollution, and electric plants are generally only 33-45% efficient.

The gas furnace and boiler are more cost-effective over time than electricity, as gas is usually close to half the price of electricity and 49% of homes use gas for their heating systems. While gas systems can be less efficient than electric options with AFUEs ranging from 78-96%, their green rating is higher as gas is often called one of the cleanest energy sources.

Of course, the cleanest option by far, and most cost-effective to run is the heat pump. This system doesn’t burn fuel but rather works by extracting heat from the air or the ground (geothermal). Despite a small amount of electricity needed to run the system, it is the most eco-friendly option on the list. Though installation costs can be prohibitive, if you have the budget, this system provides the most consistent temperatures in-home, for the least energy input. Also, some municipalities offer incentives to help cover installation costs.

How to Decide

As you can see, the initial costs and running costs are almost inversely related. There are many factors that will affect the real costs to an individual household, including local climate, local energy tariffs, availability of energy in your area, space (especially for geothermal) and existing fittings, as well as budget. For example, solar or wind-generated electricity may be available, making electrical options the most cost-effective and eco-friendly options.

To start with, consult your municipality and local energy providers to see what incentives and offers they may have for all energy sources. Secondly, before you invest in any heating system, ensure you adequately seal and prepare your house, to ensure that whatever heat you do generate can’t leave the house easily. This includes sealing all ducting, and exits sufficiently, installing window drapes/shades made from insulating materials(keep them open to allow sun in during the day but closed in the evening), insulate your attic and invest in a programmable thermostat. Finally, establish what your priorities are regarding initial cost compared to running cost, and eco rating. This should leave you with a pretty clear option that is most available to you and should serve you going into the cold season.

Data Sources