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How do I estimate and compare heating costs?

You probably wonder how much it actually costs to heat your home during the cold winter months. You might also wonder if you should make an investment in upgrading your home's heating system and if it's worth that investment. The choices of heating systems and fuel types can be overwhelming. If you're building a new home, purchasing an existing home or thinking about replacing your home's heating system, we can help you estimate the annual heating costs for many of the heating system options offered today.

You may first want to start by learning more about how your home's heating system works before you jump into choosing which system to purchase. You should know some basic information about the types of fuels you can use and how they compare in terms of price. Don't reach for the phone to contact an HVAC specialist until you've had a chance to read through the information we provide on these topics and more.

Basic information about different fuel sources

Listed below are the most common fuels used for home heating:

  • Natural gas - measured in cubic feet. Residential customers typically purchase natural gas in units of 100 cubic feet - or Ccf. (A Ccf is also referred to as a "therm.") Your monthly natural gas usage can be found in the Natural Gas Section of your bill. Typical average residential usage is 80 Ccf.
  • Electricity - measured in watt hours. Residential customers purchase electricity in kilowatt hours - or kWh. A kilowatt hour is equal to 1000 watt hours. Your monthly electric usage can be found in the Electric Section of your bill. Typical average residential usage is 1000 kWh. There are 3,412 BTUs per kWh.
  • Propane (LP) gas - measured in gallons. Residential customers purchase propane gas in gallons. There are 91,000 BTUs per gallon.
  • Fuel Oil - measured in gallons. Residential customers purchase fuel oil in gallons. There are 140,000 BTUs per gallon.

It appears that each fuel type has its own unit of measurement; however, there is a common unit of measurement that applies to all of these fuel sources. It's a BTU — or British Thermal Unit. If you were to strike a single match, it would put off the same amount of heat contained in a BTU.

How much heat does my home need in the winter?

  • We use an average home when comparing fuel costs. Average homes in the Midwest use between 60 and 80 million BTUs each winter. If your home is larger or smaller, older or newer or has more or less insulation, you will require additional information before assessing your home's heating needs.
  • If you know the age of your home, its approximate square footage and how well it is insulated, you can estimate your home's heating needs. The link below can help you in determining an estimate.
  • Once you know the estimate number of BTUs your home needs, you can compare the cost to heat your home by type of heating system.
  • If you're curious about what impact you could potentially see based on various home improvements or upgrades to your heating system, see our Home Energy Analysis page.

What do I need to know about dual-fuel systems? Can adding a heat pump to my existing furnace save me money?

Fuel is converted into heat for your home through your home's heating system. Many energy experts advocate using a "dual-fuel" system. You can add an electric heat pump to your existing furnace to create a "dual-fuel" system. Some HVAC specialists refer to this as an "Add-On Heat Pump."

Your best bet is to make this decision at the time you are making a new air conditioning purchase. When you purchase a new air conditioning system, your hope is that you will save money on future summer energy bills. New air conditioning systems do nothing to reduce your winter heating bills. Consider instead a heat pump system. Heat pumps work as air conditioners in the summer and heating systems in the winter (by working with your existing furnace) to reduce your home's total energy costs.

The information contained in these sections is based on estimates and is presented as such. LG&E and KU in no way represents or warrants that actual reductions will be achieved in customers' home heating bills based on the use of the estimated calculations used. There are many variables and factors that determine a customer's actual usage; many of these variables and factors are outside of the control of the company. An individual customer's actual results and outcomes may vary from these estimates.