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Are you looking for ways to lower your energy bill? Would you like to compare the cost of heating between different energy sources so you can have a better idea of how much you could save if you switched to another source?

You can compare the number of litres of (l) of oil with kilowatts (kWh) of electricity or cubic metres (m³) of natural gas through the common denominator of the calorific value of each energy source.

Calorific value equivalents
1 l of oil = 10.8 kWh of electricity = 1.03 m³ of natural gas = 1.53 l of propane gas

For example, if you heat with oil, and your annual consumption is 2,000 litres, this equates roughly to 2,060 m³ of natural gas. If you know the unit price of a litre of oil, and the unit price of a cubic metre of natural gas for the same period, you can get a better idea of what your cost of heating would have been if you had used natural gas as your principal source of energy.

The fuel efficiency of your oil furnace

For a more accurate energy source cost comparison, it is always important to take into consideration the fuel efficiency of the heating equipment. Fuel efficiency is the amount of energy that is actually converted into space heating. For example, an oil furnace that is more than 15 years old will generally be at 70% fuel efficiency. This means that only 70% of the amount of oil you buy is being converted into heat (30% is essentially lost). So take your furnace’s fuel efficiency into consideration, and count only 70% of the total number of litres consumed in your calculation when comparing energy sources.

Example of a cost comparison calculation

The following is an example of the cost comparison calculation for a year’s use of oil and natural gas, taking into consideration the fuel efficiency of your 15 or more year-old furnace and a new natural gas furnace one:

Calculation of the annual cost of heating with oil:
2,000 litres of oil consumed x $0.91** = $1,820 (your annual oil bill)

Comparing the cost of heating with oil and with natural gas, taking into consideration the furnace’s fuel efficiency:
2,000 l of oil x 70% efficiency = 1,400 l used for heating
1,400 l x 1.03 m³ = 1,442 m³ of natural gas required to heat for a year
1,442 m³ x $0.520/m³*** = $750 (estimated annual cost of heating with natural gas)

Annual saving from using natural gas as your energy source: $1,070

You get better fuel efficiency with the new heating systems. For oil furnaces, you are looking at 80% efficiency, and 96% for natural gas furnaces. Electric systems are 100% efficient.

Of course, this is only a rough calculation of the comparison of two different energy sources. There are a number of other parameters that would have to be taken into consideration for a more precise estimate. Check Gazifère’s Web site for a fuel savings calculator that will help you get a more accurate estimate of the annual savings you could achieve by switching to natural gas.

* For oil furnaces that are less than 15 years old, we use a fuel efficiency of 80% in the comparison calculation. For oil furnaces that are more than 20 years old, we use 60%.
** Average price of a litre of oil at July 1, 2015.
*** Price of a cubic metre of natural gas at July 1, 2015.

Additional reading:
How long should you wait before replacing an oil furnace and its tank?
To reduce your energy bill, take the age and fuel efficiency of your furnace into consideration
Choosing an energy source based on its price and advantages

Published by:

Michel Meilleur
Supervisor, Residential market development