Which is less expensive for home heating: oil or electricity?
I buy home heating oil by the gallon, but what I really want from it is heat, which is measured in megajoules (MJ). According to Wikipedia, a gallon of home heating oil contains 138,500 British thermal units (BTU) of energy, which is 146 MJ.
I buy electricity in kilowatt hours (kWh). A kilowatt hour is exactly 3.6 MJ.
With that, I have a way to compare prices.
It is hard to buy heating oil at this time of year, but diesel is almost the same thing. Today’s price for diesel in Pennsylvania, excluding highway taxes, is $4.403 per gallon. That is 3.02 cents per megajoule. My “high efficiency” oil furnace is estimated to operate at 83 percent efficiency, so I pay 3.64 cents per megajoule of heat.
On my latest electric statement, I paid 16.2 cents per kilowatt hour. That is 4.5 cents per megajoule. Electricity, when measured and used this way, is 100 percent efficient; only the tiniest amount of energy is lost in the wires that connect the electric meter to the house. So I really get a megajoule of heat for my 4.5 cents of electricity.
To recap: oil, 3.64¢/MJ; electricity, 4.5¢/MJ. Oil still has an advantage, but the advantage is so slight that installing, or even repairing, an oil heater at this point would not be a sensible investment.
As oil prices go up, we reach a point at which oil heat costs as much as electric heat. Beyond that point, we save money by switching over from oil to electricity. In my scenario, with 83 percent efficiency for oil, we reach that point when the price per gallon of oil is 33.7 times the price per kilowatt hour of electricity. If the local price of electricity does not change first, the switchover point is a heating oil price of $5.454. That doesn’t seem so far away; in fact, it’s lower than the $6.00 price I think I ought to be planning for. When my oil tank runs dry, I am not sure I will want to refill it.