5 Things to consider when replacing your heating system

A big old boiler

#1: Research replacement systems before your current system dies

Hopefully, you’re reading this before you need to replace your heating system. Other than buying a car, a new heating system is likely to be the biggest single item you’ll purchase for your home. And just like a car, you want to do your research before plunking down the the ten grand on something you’ll be living with for years.

Unfortunately, most people wait until their heating system dies – usually in the dead of winter. What ensues is an emergency phone-call to your “heating guy” who will either replace your system with exactly the same, inefficient, old unit you already have or whatever he’s got on the truck, most likely the latter.

You wouldn’t buy a car this way, would you? You wouldn’t call your car dealership and say “my car broke down, sell me what you’ve got. Maybe give me a few options for different cars.”

Nobody buys a car like this, it would be just plain stupid!

#2: Determine what fuel and system type makes most sense

Most of the time, people just replace their systems with whatever they already have. Burning oil? Get another oil system. Have a heat pump? Replace it with a heat pump and so on. But this doing this isn’t in your best interest.

Your heating system is probably twenty to fifty years old. A lot has changed in the last few decades! Oil costs have skyrocketed while natural gas is relatively inexpensive. Electricity rates have increased quite a bit in the last decade but are generally much more stable than fossil fuel prices. And propane prices can vary 100% from summer to winter.

Then there are other options. Maybe you’ve investigated geo-exchange (ground source heat pumps) or something else. This is a time to really do your homework. This part can be overwhelming. In future posts, I’ll be discussing the pros and cons of all the major system types to help guide you through this arduous process.

Without getting too technical, at current natural gas and oil prices, all other things being equal, you will pay much less to operate a natural gas system than an oil or propane system. And a properly sized and installed ground source heat pump can cost even less to operate. Here is a very nice calculator that computes the cost to heat using different fuels.

#3: Decide how important energy efficiency is to you

To carry the car analogy further, think about how you choose a car. If you are ecologically minded, or budget conscious, you might look for a car with good gas mileage. You’d probably evaluate a number of cars, comparing mileage, price and features.

For heating systems, the system’s efficiency is roughly comparable to gas mileage. But unlike mileage, there are a variety of different measurements and technologies, so it can be hard to directly compare units. Heat pumps have one measure, called the HSPF (Heating Seasonal Performance Factor). Boilers and furnaces use the AFUE (Annual Fuel Utilization Efficiency).

Items 2 and 3 really go hand in hand. You can buy the most efficient oil system available and it might still cost twice as much to operate as an average efficiency natural gas system. That’s why you really have to do your research and use the fuel cost calculator.

#4: Pick a qualified contractor

I could have put this as item number one because the best heating system in the world will perform horribly if installed improperly. On the other hand, some contractors only deal with certain types of system. You might have an oil specialist, a heat-pump company and so on. And if you go to a Ford dealer, you can bet that they’re going to try to sell you a Ford! Therefore, I strongly recommend doing your own research before calling in the contractors.

A few hints on picking contractors:

  • Check Angie’s List. They’ve been quite reliable in providing contractor ratings and are well worth the subscription.
  • As your energy auditor and other contractors for recommendations. Ask them “if you were having this work done on your own home, who would you use?”
  • When you get recommendations, ask the person if they get any “finder’s fee.” There’s always a conflict of interest if you’re getting paid for recommending a business. I’m not saying that it’s dishonest, just that receiving money for a recommendation is bound to skew your perspective.
  • Ask the contractor how many systems they’ve installed like the one you want to get. You don’t want go be a Guinea pig.
  • Ask if the contractor is NATE certified. Find out about other professional training or certification they have.
  • Ask the contractor to perform a Manual J calculation.

A couple more tips on contractors.

If you’ve done your homework, and you ask the contractor about something, make sure they give you a straight answer. If they say that they don’t trust that high-tech new system or they start giving you a line about how hard or expensive it is to get parts, then don’t trust anything they say. The same applies if they start badmouthing the competition. The only contractors that do this are those that sell a competitor’s product and aren’t comfortable selling on the virtues of their product. Instead, they try to plant “FUD” (fear, uncertainty and doubt) about the competition.

Reputable contractors will say “I’m not familiar with that unit” or better, “I’m not familiar with it but if you email me a link, I’ll check it out for you.” The best contractors are those who work with you to help you make the best choice for your home. Even if they don’t make the sale, they know that if they behave in a helpful and ethical manner, you’ll put in a good word for them.

Your goal in hiring a contractor is to establish a long-term relationship with them. If you don’t have a good feeling about them, don’t hire them. I can’t stress that enough.

#5: Make a decision based on long term thinking

It’s really easy to go with the “low bidder” but I strongly advise against it. You’re investing in your home and you’re pretty much stuck with that decision for decades. And there’s much more than cost to consider. You might want the super-efficient system with the lowest operational costs, but then again, you might not. Maintenance costs can offset fuel cost savings.

As an example, I purchased the most efficient oil boiler sold in the U.S. It’s a full 10% more efficient than most of the typical oil boilers sold. It’s well made, quiet and attractive. But it was made in Europe and there are important differences between the oil sold in Europe versus that sold in the U.S. It turns out that that U.S. oil is “dirtier” and has more corrosive by-products. Because of this, my burner clogs more often so sometimes I require multiple service calls/repairs every year. In addition, I recently discovered that a critical component was getting eaten away by the corrosive flue gases. Repairing these issues will cost me far more than I would have saved by buying a conventional system that was less efficient.

Again, it’s a lot like buying a car. You want efficiency, but you also want maintainability. If you get the latest unit that doesn’t have a track record, be prepared to do more maintenance. And always remember, you want to buy from someone who will stand behind the product, because invariably you’ll be working with them for years to come.

7 thoughts on “5 Things to consider when replacing your heating system

  1. “propane! In my area it’s over $3/gallon now”

    TIP for readers: We own our propane tank! So what some propane suppliers offer is a prepay plan.

    How it works, we in August we tell our dealer we’re going with (lets say) 500 gallons at the price quoted by the dealer (lets say) $2.00. So we sign a contract for $1000.00 in August. So when our tank needs a refill we just call, and they fill it until each time we’re out of that 500 gallons. Trick here is knowing what you uses in propane gallons over the year.

    Works out great in Jan and Feb when the propane prices peek up higher than what the are in August.

    The trick in you have to Own Your Tank and You have to have a Few Extra Bucks to advance towards your winter heating budget.

    Tip for an article ……

    Most people can’t read or understand their bill for gas and electric. Llike kW, term? So they can’t tell you what they use. If they can’t tell you what they use, how can they understand how to save?

    I was looking into a new car, so I asked people what type a mileage they got when I saw a model that interested me. One of the biggest replies was, Oh I fill up about once a week! get my point.

    Of course you know this and I’ll bet you have a few stories to spin yourself

    • Great points. I have a buddy who does the propane purchases like that and in the past, it’s worked well for him. Pretty much half price. This year he said the prices remained stable (high) so I guess it’s a bit of a crap shoot. It is amazing how much the prices fluctuate. Anybody with propane would be well advised to buy their own tank and optimize their costs like you recommend.
      Thanks for the tip!

  2. Fuel: Propane at $ 1.80 per Gallon (91,333 Btu)
    Heater: Furnace (standard/older) efficiency 78 %

    * Hot air, standard duct sealing (R-8) efficiency 73 % ***
    * Propane: $34.61 per million Btu ***


    Fuel: Propane at $ 1.80 per Gallon (91,333 Btu)
    Heater: Furnace (standard/older) efficiency 78 %

    * Hot air: ducts in heated space efficiency 98 % ***
    * Propane: $25.78 per million Btu ***

    $25.78 / $34.61 = 74 % of the cost of ducts without a heated space or a 26% savings

    $34.61 / $25.78 = 34 % over

    That’s the way I read it, let me know if I’m wrong about this.

    Further, as I read it (see below) upgrading my Furnace (Energy Star efficiency 90 %) would only have yield $3.44, but my ducts in a heated space, the yield was $8.83

    Fuel: Propane at $ 1.80 per Gallon (91,333 Btu)
    Heater: Furnace (Energy Star) efficiency 90 % ***

    * Hot air: ducts in heated space efficiency 98 % ***
    * Propane: $22.34 per million Btu ***

    • Well, I guess the 27% loss of ducts in non-conditioned space assumes standard leakage rates. With a good installation, the real loss should be significantly less, so it’s a little hard to bank on. However, given what I’ve seen in the field, 27% is not at all unreasonable.
      The nice thing is, the efficiencies “stack” so if you ever replace your furnace with a high efficiency unit, you’re even better off. With propane, I’d got all the way to a 95% condensing unit if I did a replacement.

      You’re making out great at $1.80/gallon propane! In my area it’s over $3/gallon now. 😦

  3. Ran the fuel cost calculator (link). Found the duct runs the cheapest way to improve my efficiency.

    Works out that the addition we built having the duct runs in the heated living space was a very good choice! We placed them in a enclosed soffit system (like the kind that’s over some kitchen cabinets) also duct runs between the 1st and 2nd floors. No attic or crawl space run here. Looks like it turns out to be a 25% savings and people thought I’m goofy!

    Now to give the heating system upgrade some consideration as we’re still running the new addition off one of our 10 year old furnaces (we have two)

    • I’m actually surprised it makes that much difference! That’s a great tip for people. Current building code strongly encourages keeping ducts in the “conditioned space” of the house for just this reason.
      I once did a consulting job for a guy who had uninsulated sheet-metal ductwork running through his cold basement. This was one of those basements with insulation on the ceiling, so it was really cold. He complained that the room above this space was always cold. Turns out, it was cold because all the heat from the furnace to that room was lost by the time it ran through the the cold sheet metal duct. He insulated it and voila! the room was warm as every other room in the house.
      Thanks for sharing your experience.

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