How Can I Reduce My Heating Bill?


If you’ve read my posts before, you know I’ve had mixed feelings about heat pumps. On the one hand, they’re great. On the other, historically, natural gas, and even heating oil, have provided heat for your home cheaper than the electricity based heat pump. But, for many reasons, especially environmental ones, my preference is to use heat pumps for primary heating and cooling.

Fossil fuels are a dead end

This last year, we’ve seen historic price increases in fossil fuels that have hit almost every household. Heating oil, natural gas and propane bills shot up, often doubling your heating bills. On top of that, automotive gas prices increased like crazy. These price spikes inflated the prices of just about everything – from fertilizer to vegetables. From avocados to sneakers. Fossil fuel prices affect almost everything.

Now is the time to add a heat pump

If you have central air conditioning, you can probably switch to a heat pump without too much difficulty.

An air conditioner and a heat pump are virtually identical. The difference is, a heat pump has an extra valve that allows the indoor air to blow cold or hot. You might have noticed that the outdoor air conditioner blows out hot air when it runs. A heat pump just switches it so that the hot air blows indoors instead of outdoors. When the air blows hot inside, the cold air blows outside. It’s the way these refrigerant based systems work. One side is hot and the other side is cold.

The great thing about heat pumps is they can be really efficient. Modern heat pumps give you three to four times as much heat out as the electrical power you put in. Think of a hair dryer. That’s considered almost 100% efficient because it converts those 1,500 electric Watts into an equivalent amount of heat. A heat pump, seemingly miraculously, can take the 1,500 Watts and convert it into the equivalent of 5,000 Watts of heat.

If you replace your air conditioner with a properly sized heat pump, you can heat your home super efficiently for most of the year without burning a drop of fossil fuels at home. You can do a heat pump retrofit if you have an existing furnace that burns oil, propane or natural gas and uses the same air handling system for air conditioning. You can continue using the furnace for the coldest parts of winter or when you need to warm your house quickly.

How much money will I save by using a heat pump?

There are a lot of details that go into answering this question. The first is: “how much does electricity cost per kilo-Watt-hour?” and “how much does my gas/oil/propane cost per gallon?”

It does get more complicated. Your local climate makes a huge difference. For example, if you live in a place where the winters are relatively mild, you can probably heat your home all year with just the heat pump and use no fossil fuels. In fact, if you live in a place like that, fossil fuel furnaces are probably relatively rare. In that climate, heat pumps are mostly a “no-brainer.”

Where it becomes trickier is where the winters are long and cold. Heat pumps will work but may struggle when it gets much colder out. In fact, the heat pump is most efficient when it’s only “cool”, like 45 degrees, F. As the temperature drops, the heat pump loses efficiency and also puts out less heat. This is exactly the opposite of what you need! But that’s the physics of it. So if you live in a climate where it’s below freezing for long periods of time, the heat pump might not be the best alternative. However, even then, a heat pump can reduce your utility bills.

During the Spring and Fall, we often start using our heating systems to take the edge off. Maybe it’s 45-60 degrees out. With a heat pump working in its optimal range, you can heat your home without using any fossil fuel. This might reduce your gas/oil/propane bills by 50% or more. Again, it depends on the cost of electricity versus the cost of your fuel.

Let’s run a few examples. Currently, home heating oil is up to about $5/gallon. That’s crazy high, so I won’t use that for comparison. Instead, I’ll use $3.20/gallon, which is about what it cost in PA during the winter of 2021/2022. Electricity here cost about $0.15/kWh when you factor in the generation and transmission costs. Some places are much cheaper, some much more expensive, so you need to adjust for your own utility costs.

At these costs, assuming typical efficiencies for furnaces and heat pumps, it would cost about half as much to heat with a heat pump, during mild weather, than using heating oil. As the temperature drops, the savings will be less, but still substantial. So, at these electricity and fuel costs, I’d say a heat pump falls into that “no-brainer” category. Every year you keep your AC and only run the oil furnace, you’re losing money. If you’re going to be in your home for more than a few more years, you could pay off the heat pump with the savings. Again, there are many factors, so you have to run your own numbers for comparison.

Now, consider what happens if oil stays at $5/gallon or goes higher for next winter. At that price, you would spend one third as much (!) on heating with a heat pump compared with oil. If you use 750 gallons of oil, the oil would cost $3,750. The electricity for the heat pump would cost only $1,250, saving you $2,500. Who knows what prices will do?

You also have to consider the “incremental costs” of upgrading to a heat pump. Suppose your air conditioner is old and you’re thinking about replacing it. It’s probably inefficient. If you replaced it with a modern heat pump, it would be cheaper for air conditioning AND you’d save money using it for heating. Since you would need to replace the AC anyway, the additional cost of the heat pump compared to a new AC unit might be small so the combination of cost savings on air conditioning and heating could pay off the additional purchase cost very quickly.

Cost comparisons for natural gas are similar. Gas prices fluctuated wildly this winter and people saw their costs double. Gas prices have since dropped a lot, but there’s no telling what will happen in the future.

I’d be remiss not to mention the price fluctuations in electricity. My own electricity costs increased about 10% this year. Others in Pennsylvania saw their electric costs double. This happened all over the country, so again, you have to do your own comparisons.

Other advantages and conclusions

There are other advantages to using a heat pump. How often do you maintain your air conditioner? Most people only call their HVAC company when they have problems. On the other hand, when you have a combustion system, you should really get it cleaned and checked at least once a year.

Safety is another important consideration. A heat pump doesn’t burn fuel, so there’s no chance of carbon monoxide poisoning. Sadly, while rare, fossil fuel systems are responsible for about 430 carbon monoxide related deaths each year, according to the CDC. They also say that about 50,000 people are hospitalized each year from accidental carbon monoxide poisoning.

If you have propane or heating oil, you have to store fuel in tanks on your property. Heat pumps use the same electricity that powers your home. No need for storage, so you never need to worry about “filling up the tanks.” Convenience with heat pumps is a big benefit.

All things considered, if you live in a mild or moderate climate, a heat pump might be a great upgrade for your air conditioning system. You can save money on your summer air conditioning and winter heating while avoiding the inconvenience and potential dangers of a fossil fuel burning system. You might even get a rebate from your electric company, as many want you to use heat pumps instead of burning fossil fuels.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s