When a boiler or furnace is working it turns fuel into usable heat.

Because this occurs at varying efficiencies the price of usable heat can be very different than the price of fuel.

In this post we are going to compare the cost of oil heat, gas heat, electric heat and wood heat in the US and UK.

US Heating Cost Comparison

In the image at the top of this post we compared the typical cost of heat for different fuels based on average prices and typical conversion efficiency.

The units are $/million British Thermal Units (BTU), which as an Australian, living in the UK, looking across the pond,  I find very strange.

What these heating costs show is that in the US both fuel oil furnaces and electricity furnaces are an expensive way to heat a home.  To get cheaper heat using electricity you need a heat pump.  The very cheap natural gas prices in the US mean gas heating is much cheaper, explaining its dominance for central heating.

A few things are worth noting.  These figures are based on the average system efficiency shown in the brackets.  If this increased the price would come down and  if the efficiency was worse it would be more expensive(as for an old furnace).  Secondly, these are only fuel costs.  A full evaluation for a new system choice would include capital costs of the system.  The low cost of electric heating systems may explain part of why they are more common in milder climates, as well as limitations on gas infrastructure.

via Fuel Costs of Home Heating | The Energy Collective.