Heating and cooling accounts for about 30 percent of
electricity consumption and about 70 percent of gas consumption, according to a
UC Berkeley study. As much as people grumble in the summer months about high
energy bills, wait until old man winter rolls in this year!
Natural gas (NG) prices are projected to rise in the winter
months (aren’t they always?) to unprecedented levels. Sometimes the prices for
NG and fuel oil do go through the roof as demand peaks in the winter, and
sometimes the “old man” takes it easy on us. This year, The Old Farmer’s Almanac predicts some major cold weather beginning
as early as Thanksgiving in much of the North and severe cold in early
December. After that, it’s up and down through early March 2009.
So, how much does it really cost to operate a furnace? To
make this easy, let’s just use the Berkeley stats and say my furnace is the low
efficient 78 AFUE. The average cost for a 78 percent AFUE furnace is $1,043,
the average cost for a 93 percent AFUE furnace is $1,412.
I know my winter bills have hit $300 per month regularly in
the past, and given the Berkeley study, that can mean $210 is heating my house,
and even more if the water heating is counted.
The simple annual cost of heating my house in Cleveland is
going to be about $210 x 6 (mths) = $1,260. Therefore, my total cost is really
$1,043 + $1,260 = $2,303.
Over 10 years, the installed and energy costs are actually
$13,643.
If I had a 93 AFUE furnace, here is what would happen. My
heating costs would be about 15 percent less. My total annual cost would now be
the more expensive furnace and the lower monthly bills: $1,412 + $1,071 =
$2,483.
Over 10 years, the installed and energy costs of the more
efficient system are $12,122.
If the cost of NG didn’t change over 10 years then my investment
in high efficiency is worth $1,521. Would most customers be willing to pay a
little more up front for about $1,500? Ask them if they are willing to bet that
NG prices hold steady for the next 10 years.
Murphy's Law: How Much Does a Furnace Cost?
How Much Does a Furnace Cost?
September 19, 2008
Mike,
Good article, but I think you forgot to disclose one assumption you made, proper installation.
This is automatic right? I would be curious to know how a certain News staffer (Ms. Hanks) fairs this winter with her new furnace (though I must admit I do not know if it is a high efficiency unit or not.)
I would be willing to be a dollar to a hole in a doughnut that she does not realize the savings she might expect - IF - the unit was not properly installed.
Good blog.
Wes
How Much Does a Furnace Cost?
September 19, 2008
Wes,
Excellent point. I have heard (LSU Study) that a system can degrade by as much as 10% per year, after year three, if no maintenance is performed. If you were to start out with a poor installation, things could be really bad. It makes sense to have a good installation and good maintenance.
Murph
Fair investment
September 2, 2011
I think many homeowners are skeptical about the benefits of furnace costs in the long term, but the way I see it since you are going to be spending thousands of dollars on installation prices anyway, the extra $1500 should not need much deliberation.
March 28, 2013
If we analyze last 10 years, then we can easily recon about coming 10 years. NG prices do not accelerate rapidly as we know, very rare changes on per unit cost. that is why for furnace NG is the best option to save huge amount rather oil furnace. So I am with gas furnace. Cosmopolitan Mechanical is the best to ask more.