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During these times of fuel price volatility, it’s important to keep a close eye on the relationship between fuel prices. Any homeowner who uses a wood pellet stove to supplement their gas furnace could be losing money and not even know it

fuel cost comparison,effective cost,wood pellets,natural gas,fuel efficiency

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I recently updated the Fuel Cost Comparison Chart at Alternative-Heating-Info.com and the results were surprising. As of 3/20/06 it was actually cheaper in Metro Boston to heat with natural gas than with wood pellets!

During these times of fuel price volatility, it’s important to keep a close eye on the relationship between fuel prices. Any homeowner who uses a wood pellet stove to supplement their gas furnace could be losing money and not even know it..

If you can use a calculator, you’re only minutes away from figuring out which fuel is the cheapest to burn at any given time.

When you compare fuel heating costs make sure it’s apples to apples. The standard quantity used for comparing residential fuel costs is 1,000,000 BTUs of fuel heat content.

Cost To Burn Wood Pellets

Since a wood pellet stove needs only 125 lbs (1/16 of a ton) of pellets to generate 1,000,000 BTUs, divide the cost per ton by 16. At $198 a ton for wood pellets it costs $12.38 to produce 1,000,000 BTUs.

Cost To Burn Natural Gas

The price per therm (look at your gas bill) of natural gas in Boston is $1.1813. When you multiply that by 10.30 (10.30 cubic feet) it costs $12.17 to produce 1,000,000 BTUs.

It’s easy to see that natural gas heat now costs about $0.21 less per 1,000,000 BTUs than wood pellets.

Here are the quick fuel cost comparison formulas for wood pellets and natural gas:

Price per ton of wood pellets divided by 16 = Cost to produce 1,000,000 BTUs.

Price per therm of natural gas x 10.30 = Cost to produce 1,000,000 BTUs.

The quick formulas are useful only for comparing natural gas to wood pellets since their fuel efficiencies are similar.

If you are comparing fuels with different efficiencies, all you have to do is find the coefficient of the fuel efficiency percentage rating. Please don’t run screaming out the door because I said coefficient. Just divide 1 by the percentage’s decimal equivalent to obtain the coefficient.

For example: The fuel efficiency rating for natural gas and wood pellets is 85%.

If you divide 1 by .85 you get a coefficient of 1.18. Now plug this into the quick formula to obtain the effective, or true cost, of the fuel you are burning.

Wood Pellets: $198 divided by 16 x 1.18 = $14.60

Natural Gas: $1.1813 x 10.30 x 1.18 = $14.36

By expanding the quick formula to include the effective cost calculation, the spread between the two fuels has now widened to $0.24.

Assuming fuel prices don’t go crazy, you could save as much as $75 during the remainder of this heating season by switching from wood pellets back to natural gas.

When prices do change, you have armed yourself with two simple, yet powerful tools to help you quickly and confidently determine when one fuel is more cost effective than the other.

These are the coefficients of commonly used percentages:

60% = 1.67, 65% = 1.54, 70% = 1.43, 75% = 1.33, 80% = 1.25, 85% = 1.18, 90% = 1.11, 95% = 1.05, 100% = 1.