Energy Costs

Sorry, I couldn’t come up with a snappy title for this one. This is about money and energy, so it’s a bit dry.

After my recent post on water heating, a friend dropped me a note and reminded me that the economics vary considerably depending upon the cost of the fuel. This is absolutely true, though unless you’ve studied a lot of utility bills, you might not realize just how much energy costs can vary.

Generally speaking, we have four energy sources that are widely available:

  • Natural gas
  • Propane
  • Heating oil
  • Electricity

Depending on where you live, the cost of each can vary widely. To complicate matters further, the price varies throughout the year, usually in proportion to the demand. So, for example, heating oil cost is the greatest in the dead of winter when you need it the most.

For the rest of this post, unless I note otherwise, I’ll be comparing fuels based upon their normalized cost. That is, I’ll be comparing the cost based upon the same amount of useful energy contained in the fuel. This can get confusing because most people refer to cost per gallon, but that’s meaningless because a gallon of liquid propane contains far less energy than a gallon of heating oil and you can’t even buy a gallon of natural gas or electricity.

Instead, we’ll be comparing fuels based upon their cost per million BTUs (also called MMBtu). What’s a million BTUs? It’s:

  • 7.25 gallons of heating oil
  • 10 CCF (or therms) of natural gas
  • 10.92 gallons of liquid propane
  • 292.91 kilowatt-hours of electricity

You can think of it as about the energy contained in half a tank of gas.

So the million dollar question is, how do fuels compare based on an equivalent amount of energy that they’re capable of producing?

To answer this, we have to look at a range of prices. For example, on the West coast and in the Northeast, fuel costs are quite high. Electricity in most areas is $0.15-$0.20 per kilowatt hour (KWh). That means the cost per MMBtu of electricity ranges from $43.94 to $58.58. But in some areas, or under certain rate plans, electricity is as low as $0.07 per KWh so the cost per MMBtu drops to $20.50.

So you see, this really complicates cost comparisons. That’s a three times range of cost. And it only gets more complicated when you compare multiple fuels! To simplify matters, here’s a table with each fuel, a range of costs, and then the corresponding range of costs per million BTUs.

Now the picture is getting a little clearer. You have natural gas at a low cost of $7 per MMBtu up to Electricity at almost $59 per MMBtu. That’s quite a range for the same amount of energy!

Let’s make this even more interesting! Instead of an abstract term like MMBtu, let’s convert this to “1,000 gallons of hot water”. I have to make a few assumptions here because this new calculation depends upon the starting and ending temperature of the water. For this, I’m basing the calculations on 50 degree water coming in and 130 degree hot water.

Heating 1,000 gallons of water takes 666,400 BTUs of energy. So if you were able to capture 100% of the energy contained in each of the fuels above and transfer it to the water for heating, you’d get the following:

What does the fuel really cost?

Notice that in all this discussion, I’ve kept things simple by just talking about the energy contained in the fuel. That assumes 100% efficiency. Unfortunately, nothing happens with 100% efficiency so we now have to complicate matters further by considering the actual efficiency of each system.

For these calculations, I’m going to use the typical efficiencies achieved in most households. You have to build your own spreadsheet if you want it to be accurate for your own situation.

Water heaters and their corresponding efficiencies

Water heaters are rated by their “energy factor.” This is a rating based upon the combustion efficiency and the heat loss of the storage tank, all measured under “typical conditions” whatever that means. The energy factor is a number from 0.0 to 1.0 representing 0% efficient to 100% efficient. I don’t know why they didn’t just use % efficiency, but they didn’t, so just remember an EF of 1.0 is perfect.

Natural gas, propane or standalone oil water heaters have an EF of about 0.59. Yes, you read that right – your conventional, combustion type water heater is only 59% efficient, if you’re lucky.

An electric storage tank water heater has an EF of about 0.90, or 90% efficient.

There are other technologies and types of water heaters, but in practice, these numbers apply to the vast majority of the homes in the U.S.

This tells us that the actual cost to heat your water is considerably different than what I showed in the tables above because the efficiency changes things, making electric water heaters much more appealing if you have cheap electricity.

Just for completeness, I’ll convert the table above to include these efficiencies. So the following table represents the cost to heat 1,000 gallons of water in a real water heater.

This final table represents the price range that a consumer would expect to pay to heat 1,000 gallons of water based upon typical water heater efficiencies and the range of fuel costs across the United States.

It has been a long journey, but if you followed it, you should now be able to figure out how much it’s really costing you to take a 20 minute shower or wash clothes with that old washer.


In another post, I’m going to describe how you can analyze your own utility bills to see how much fuel you’re actually using for hot water. All these numbers are great, but what’s really important is how much it’s costing you to heat your water based upon your actual consumption.

Water heating – trimming your bills

If you haven’t yet read my first posting about water heaters, I highly recommend that you do so now. Without that foundation, you’re not going to get the most out of this article.

Invariably, this question comes up – “how do I reduce my water heating bill?”

Let’s break this down into a few parts. What affects your bill?

  1. The amount of hot water you use
  2. The efficiency of your water heater
  3. The cost of your fuel
  4. Other inefficiencies

I’m going to address these points one at a time, because each one is important to understand and all impact your energy bills.

Reducing your hot water use

This one is obvious. Reduce the amount of water you use and you directly cut your energy bills. But how can you cut back on hot water use? I’m assuming that you aren’t willing to change your lifestyle because most people aren’t. I mean seriously, if you’ve taken 20 minute showers your entire life, are you suddenly going to start taking 10 minute showers, even if you know it might save you $100/year? Probably not.

Top ways to reduce your hot water usage:

Shower heads

Showers are one of the biggest consumers of hot water. Consider an older 4 gallon per minute shower head. That’s 60 gallons of water or maybe 40 gallons of hot water for each 15 minute shower. Ouch! That’s going to cost a fortune. If you can reduce that to 2 gallons per minute (GPM), you cut that to 20 gallons of hot water without changing your lifestyle. So the first act I would take is replacing the shower head.

But before you rush out and buy new shower heads, you might want to measure the flow of your existing heads. Just turn on the shower and time how long it takes to fill a 5 gallon bucket then calculate the number of gallons per minute. Easy!

  • If you’re not already using a reduced flow shower head (1.5-2.5 gallons/minute) then invest in one. I’m not talking about the pathetic little ones they sell that couldn’t wash the soap off a bald man’s head. I’m talking about nice, designer shower heads, that are designed for efficiency. Things like this one. I’ve used one of these for years and love it. No, it’s not the most efficient one around, but it’s reasonably efficient and it actually works.
  • If you’ve got teenagers who take really long showers, then get one of the 1.5gpm shower heads. They don’t work quite as well, but if they’re taking hour long showers, they can deal with a little inconvenience! If you’re feeling generous, you might get this one or this one.

Laundry Machines

Usually, I don’t endorse getting rid of perfectly good appliances – in most cases, it’s just wasteful. But I make an exception for laundry machines. The new front loaders with high-speed spin-dry cycles are worth the investment on so many levels.

A typical, old style, top-loading washer requires filling the entire tub with water multiple times during the cycle, using up to something like 35 gallons of water. They’re incredibly wasteful! Add to that the fact that the clothes are still pretty wet after the spin dry and you’re paying a lot more to dry the clothes as well. Finally, those agitators are simply brutal on delicate clothes. In all respects, top loaders are simply destined for extinction.

The front loader cuts your hot water usage very substantially. If you want a detailed discussion of them, go to the Energy Star website. They do require a little different usage, and special soap, but that’s a small price to pay for $100-$200 savings per year in reduced water use. They’re truly awesome!

Wash Clothes in Cold Water

You’ve heard it before and I’m going to say it again – the most efficient usage of hot water is not using hot water at all.

With modern laundry detergents, you do not need to wash clothes in hot water, and the savings can be hundreds of gallons per week if you do a lot of loads of laundry. That adds up to huge reductions in your hot water use over the course of a year.

Ok, so maybe you’ll still use hot water for some things, like your kids white socks that they wear outside without shoes or their football uniforms. But for a typical person, hot water wash is a complete waste.

Whole House Humidifiers

Many homes are outfitted with whole-house humidifiers. These bolt on the side of your furnace and introduce water into the air stream to humidify your home during the winter.

Unfortunately, some lazy product designers decided it was a good idea to run hot water through these units to help humidify the air because the hot water will be more “steamy” and work better. So what do these idiots do? They design a machine that runs something like 6 gallons of hot water through the system every hour, even when they’re only using a tiny fraction of that to humidify the air. Why? Because hot water is much more prone to scaling problems, so they run the water to flush out the mineral buildup!

Over the course of a day, that humidifier can be doubling your hot water use, easily. So over the course of a winter of use, that’s adding hundreds of dollars to your utility bills. Horrible. Stupid. Wasteful. These things should be outlawed.

If you’ve got one of these units that runs on hot water, disable it, shoot it, rip it off, and throw it in the trash. If you must have a humidifier (I’ll cover this topic in another post) then get one that uses cold water and a misting system or a sponge-like element.

BTW – I wrote an entire post about central humidifiers and their evils.

Remember to Fix those Drips!

Remember – there’s no such thing as a small leak! Even a slow drip can be gallons per day which means hundreds of gallons per year. That’s dollars out of your pocket and wasted water for absolutely no reason.

If you have a leaky faucet, fix it. Any homeowner should be capable of turning off the water supply and replacing a washer or faucet components. They’ve made it pretty easy for most things. So don’t hesitate. Fix the drip!

Here’s a nice tutorial on the subject.

And if you don’t like to read, here’s a video.

< End of part 2 >

Ok, I’m stopping here for the day. These have been the biggies and I’ve given you enough information to save you hundreds on your water heating bills each year. Now get busy replacing shower heads, buying new washers and dismantling your whole-house humidifiers!

Energy Data – your path to enlightenment…

As I said in the post on water heater, I’m a numbers guy. But you probably have no idea just how much of a numbers geek I am….

A few years ago, I found Phil Malone’s amazingly cool website documenting his journey to energy efficiency building his own super-efficient home. You see, Phil is a kindred spirit, as are all the people on this page. We’ve all come to the conclusion that energy monitoring can be fun and enlightening. After all, if you don’t measure it, how do you know how much energy you’re actually using? It’s all just a bunch of theoretical mumbo-jumbo.

So with this post, I’m putting my own home’s data on-line for you to see. Isn’t that cool? It’s all my home’s energy use at a glance. From anywhere in the world, I can go to that web page and see if my ground source heat pump is running and how much energy it is using.

Using this data monitoring, I’ve been able to discover when things in my home are amiss. For example, this winter, my boiler broke down, and I was able to determine exactly when it happened and how fast my house cooled down. Why is this a big deal? Because if I wasn’t at home, I would have seen this before my pipes froze and my home was flooded. It could have saved me tens of thousands of dollars.

But on a daily level, it tells me where and how much energy I’m using. At a glance, I can see how much energy my ground source heat pump is using and how much heat it’s pumping out, which tells me if it needs servicing or if it “needs a rest” (I’ll tell you that story another time, right now my blood pressure is high enough…)

It also shows me just how much it’s costing me to have a hot tub, sitting outside in the cold, all winter long, wasting energy, just so once a month (maybe), we can sit in it and enjoy the view. This is a “luxury”, so why don’t I feel luxurious…

Plus, it shows me interesting things. If you’re observant, you’ll notice that the cold water side of my radiant floor heater is hot while the hot side is cold. What’s up with that? That’s actually intentional, because I disabled the circulator pump and am allowing the system to work passively (called thermosiphoning). This saves the energy use of the circulator, which can be substantial.

So if you’re technically inclined and really want to know what’s going on around your home, I can’t recommend Phil’s Web Energy Logger highly enough. It’s truly awesome.

Energy Efficiency 101 – What’s an energy audit?

If you’ve ever looked into energy efficiency, you’ve probably heard about energy audits. But what is an energy audit? What does it involves? Why should you get one? How much does it cost?

I’ll try to touch on all these topics, and more, in this posting, but if there’s anything I miss, please ask a question at “Ask Ted” and I’ll be sure to answer!

What is an energy audit?

This is a tough question to answer. The problem is, if you ask a bunch of us this question, you’ll get lots of different answers. It’s part of the problem – it’s become a marketing phrase that people put in their ads so they can sell you windows, insulation and other services.

So I’ll give you  my definition of an energy audit.

A proper energy audit is a bottom to top analysis of your home, inside and out. It’s kind of like a general physical for your home. The goal is to find how well constructed your home is from an energy, health and comfort perspective. Is it properly insulated? Is there any sign of water intrusion? How well are the heating and cooling systems installed? Are there drafts? Are the electric bills in line with expectations? How about other heating fuels (gas, propane or oil)?

A complete energy audit will usually include a blower-door test and a detailed thermal imaging (also called infrared) scan. I say usually, because sometimes the conditions aren’t appropriate for these tests. For example, during the spring and fall, the temperatures are usually too moderate for useful thermal imaging.

If it sounds like a pretty comprehensive analysis – it is! It typically takes me a minimum of three hours to go through the process on a small home and most of the time it’s a four-plus hour process. And to do it right, it can be pretty unpleasant.

In order to do an energy audit properly, every room and space in and around the house has to be visually inspected. That includes crawling around in the attic spaces, if they’re accessible and the basement and crawlspaces. In fact, on my jobs, I’ll spend more time in the attic and basement than anywhere else in the house because those areas have the most impact on the overall performance of your home.

What’s NOT an energy audit?

A warning – there are a lot of unscrupulous contractors advertising energy audits for free or for a very low cost, like $99-$199. They do this because they’re trying to sell you something, usually windows, insulation or a new heating system. This is like going to the brake shop and asking them to tell you if you need new brakes for your car. Of course you do! If you don’t get new brakes, you and your family’s life will be in danger! Blah, blah, blah.

So if some guy (they’re almost always guys) with a green business card tries to sell you on a cheap energy audit, send them packing. There’s virtually no chance that they’re going to do a proper job or even have the equipment to do a proper job. And they certainly won’t have the training or background.

Here are some things to look for when you’re interviewing people/companies to do an energy audit:

  • How long have they been doing this type of work?
  • How many homes have they analyzed?
  • Is this their primary line of work?
  • What organizations are they part of?
  • Do they profit by selling the work they recommend?
  • Can they send you a real sample report they’ve done for someone else?
  • Can they provide a half dozen references?

I would be particularly sensitive to whether this is their primary line of work and whether they’re getting kickbacks for selling you other services, for obvious reasons.

Note that, on occasion, contractors did give me money for sending clients their way as a way of thanking me. But it wasn’t a formal arrangement – it’s not like I only sent work their way because they were paying me. I provided my clients with a list of several contractors whom I knew to do high quality work. You’ll have to play this one by ear. You’ll know pretty quickly whether you can trust your auditor.

Also, insist on getting a sample report from a real client. If they make noises about not being able to do so because of privacy, scratch them off your list. We’re not lawyers or doctors – who cares if somebody sees your energy audit report? How hard is it to remove someone’s name and address from a report? If they’re not willing to go that far to win your business, how hard are they going to work once you hire them?