(905) 875-2700
785 Main St. E Milton, ON L9T 3Z3
785 Main St. E Milton, ON L9T 3Z3

5. Comparing Annual Heating Costs

5. Comparing Annual Heating Costs

The combination of heating load, energy source and equipment efficiency determines the annual cost of heating.

Heating Costs When Upgrading Your Existing Gas Heating System

If you are heating with gas and are thinking of converting to a more efficient gas heating system, you may be interested in calculating the savings you could expect. Using Table 1 (on page 49) and the following formula will provide you with reasonably accurate figures. You need to know your annual fuel cost and the type of heating technology you are using. (Note: the published AFUE for propane-fired appliances is based on firing with natural gas. This rating should be adjusted in accordance with the footnotes to Table 1 to arrive at a more accurate rating for calculation purposes.)

Equation 1

Annual $ savings =  A – B
 x C


A = Seasonal efficiency of the proposed system

B = Seasonal efficiency of the existing system

C = Present annual fuel cost for space heating

Example: How much would you save by changing from a conventional gas furnace to a high-efficiency gas furnace at 96 percent efficiency if your present annual gas cost for space heating is $800?

The seasonal efficiency of the new condensing furnace is 96 percent,and the efficiency of your present gas furnace is 60 percent.Hence, A =96 percent, B =60 percent and C =$800.

Annual $ savings =  96– 60

= $300
 x 800

Thus, you would save $300 a year in energy costs by installing a high-efficiency gas furnace, and you would also eliminate the need for a chimney.

Table 1

Gas Heating Appliances –Features and
Efficiency Ranges

Type Features Seasonal
(AFUE) (%)
Conventional furnace1
  • chimney
  • draft hood
  • with continuously lit pilot light
  • with electronic ignition and vent damper
Conventional boiler1
  • chimney
  • draft hood
  • with continuously lit pilot light
  • with electronic ignition and vent damper
Standard-efficiency furnace1
  • chimney or side wall vent
  • draft hood
  • electric ignition
  • powered exhaust
Standard-efficiency boiler1
  • similar to mid-efficiency furnace
Condensing furnace2
  • no chimney
  • no draft hood
  • electric ignition
  • multi-stage heat exchanger
  • condenses water vapour from flue gases
  • PVC or ABS flue pipe to side wall
Condensing boiler 2,3
  • similar to condensing furnace
Conversion burners for oil equipment1
  • chimney
  • pilot light or electric ignition
  • special barometric damper or draft hood
Direct-vent wall furnace1
  • vent
  • sealed combustion
  • pilot light or electric ignition
Room heaters1
  • vent
  • pilot light or electric ignition
  • draft hood or sealed combustion
1 If this appliance is fired with propane rather than natural gas, add 2 percent to the efficiency.
2 If a condensing appliance is fired with propane rather than natural gas, subtract 2 percent from the efficiency.
3 See pages 37–38 for conditions affecting condensing boiler efficiency.


You may be interested in calculating the cost of heating with gas compared with the cost of heating with other energy sources, such as electricity, propane, oil or wood. If this is the case, you can use the following procedure (Steps 1 to 4). You need to find out the cost of the energy sources you want to compare and the types of heating technologies you might want to use.

Step 1. Determine the Price of Energy Sources in Your Area

Call your local fuel and electricity suppliers to find out the cost of energy sources in your area. This should be the total cost delivered to your home, and it should include any basic cost that some suppliers might charge, along with necessary rentals, such as a propane tank. Be sure to get the prices for the energy sources in the same units as shown in Table 2. Write the costs in the spaces provided. If your local natural gas price is given in gigajoules (GJ), you can convert it to cubic metres (m3) by multiplying the price per gigajoule by 0.0375. For example,

$5.17/GJ 3 0.0375 = $0.19/m3

Table 2

Energy Content and Local Price of Various
Energy Sources

Energy Source Energy Content Local Price
Natural Gas 37.5 MJ/m3
$0. _________/m3
Propane 25.3 MJ/L $0. _________/L
Oil 38.2 MJ/L $0. _________/L
Electricity 3.6 MJ/kWh $0. _________/kWh
Hardwood* 30 600 MJ/cord $_________/cord
Softwood* 18 700 MJ/cord $_________/cord
Wood Pellets 19 800 MJ/tonne $_________/tonne
Conversion 1000 MJ = 1 gigajoule (GJ)
* The figures provided for wood are for a "full "cord, measuring
1.2 m x 1.2 m x 2.4 m (4 ft. x 4 ft. x 8 ft. ).

Step 2. Select the Type of Heating Appliance

Choose the type of equipment you want to compare from the list of appliance types in Table 3 on page 52. Note the efficiency figures in the column titled "Seasonal Efficiency." By using these figures, you can calculate the savings you can achieve by upgrading an older system to a newer, more energy-efficient one or by choosing a higher-efficiency appliance that uses an alternative energy source.

Step 3. Determine Your Home's Annual Heating Load

If you know your bill for space heating and the unit cost of your energy source, you can determine your annual heating load in gigajoules from the following equation:

Equation 2

Annual Heating Load  =  Heating Bill
100 000
 x  Seasonal Efficiency
Energy Cost/Unit
 x  Energy

For example,you have been able to determine that your annual bill for space heating with natural gas is $687, gas costs $0.22/m3, and you have an old conventional gas furnace with a seasonal efficiency of 60 percent (see Table 3).

The energy content of natural gas is 37.5 MJ/m3 (see Table 2).

Annual Heating Load  =  687
100 000
 x  60
 x  37.5 = 70 GJ

If your bills also include tap water heating and even equipment rentals, you can still calculate your annual heating load, but it will require a little more care and calculation to separate your heating-only portion.

If you cannot get your heating bills, you can estimate your annual heating load in gigajoules from Table 4 on page 53 by selecting the house type and location that is closest to you.

Table 3

Typical Heating System Efficiencies and Energy Savings

Technology Seasonal
(AFUE) %
% of Base1
Conventional furnace/boiler
60 Base
Standard-efficiency furnace 78–84 23–28
Standard-efficiency boiler 80–88 25–32
Condensing furnace 90–97 33–38
Condensing boiler 89–99 33–39
Integrated space/
tap water condensing

33–38 space
44–48 water
Propane Conventional furnace/boiler 62 Base
Standard-efficiency furnace 79–85 21–27
Standard-efficiency boiler 82–90 24–31
Condensing furnace 88–95 29–34
Condensing boiler 87–97 29–36
Oil Cast-iron head burner (old furnace)
Flame-retention head replacement burner 70–78 14–23
High-static replacement burner 74–82 19–27
New standard model 78–86 23–30
Standard-efficiency 83–89 28–33
Integrated space/tap water
83–89 28–33 space
40–44 water
Electricity Electric baseboards 100 N/A
Electric furnace or boiler 100  
Air-source heat pump 1.7 COP2  
Earth-energy system
(ground-source heat pump)
2.6 COP2  
Wood Central furnace
Conventional stove (properly located) 55–70  
"High-tech" stove3 (properly located) 70–80  
Advanced combustion fireplace 50–70  
Pellet stove 55–80  
1Base represents the energy consumed by a conventional furnace.
2 COP = Coefficient of Performance, a measure of the heat delivered by a heat pump over the heating season per unit of electricity consumed.
3 CSA B415 or EPA Phase II tested.

Table 4

Typical Annual Heating Loads in Gigajoules (GJ) for Various Housing Types in Canadian Cities

Old Detached New Detached New Semi-Detached Town-house
Victoria 85 60 45 30
Prince George 150 110 80 60
Calgary 120 90 65 50
Edmonton 130 95 70 55
Fort McMurray/
Prince Albert
140 105 80 60
130 90 70 50
Whitehorse 155 115 85 60
Yellowknife 195 145 110 80
Thunder Bay 130 95 70 55
Sudbury 120 90 65 50
Ottawa 110 75 55 40
Toronto 95 65 45 35
Windsor 80 55 40 30
Montréal 110 80 60 45
Québec 115 85 65 50
Chicoutimi 125 90 70 55
Saint John 105 75 60 45
Edmundston 120 90 65 50
Charlottetown 110 80 60 45
Halifax 100 75 55 40
St. John's 120 85 60 45
Note: "New "means houses built in 1990 or later, and "old "means houses built before 1990. Due to construction practices, "weatherizing " and re-insulating (which can be different from house to house) , these figures are meant to be used only as general guidelines; they should not substitute for an accurate heating requirement determination, as discussed in Chapter 5.

Old detached – approximately 186 m2 (2000 sq. ft.)
New detached – approximately 186 m2 (2000 sq. ft.)
New semi-detached – approximately 139 m2 (1500 sq. ft.)
Townhouse – inside unit, approximately 93 m2 (1000 sq. ft.)

Step 4. Use the Formula

The annual heating cost is calculated as follows:

Equation 3

Energy Cost/Unit
Energy Content
 x  Heating Load
Seasonal Efficiency
 x 100 000 = Heating Cost ($)
  1. Enter the cost per unit of energy and divide it by the energy content of the energy source – both numbers come from Table 2 on page 50.

  2. Select the heating load for your type of housing and location from Table 4 on page 53, and divide it by the seasonal efficiency of the proposed heating system from Table 3 on page 52.

  3. Multiply the results of these two calculations, then multiply that result by 100 000.

The result should give you an approximate heating cost for your house. If you know your actual heating costs and the type of heating system you have, you can modify the heating load originally taken from Table 4 to suit your specific house.

Sample Calculation: You have an old detached home in Edmundston, and you would like to find out what the annual heating cost would be with a high-efficiency condensing natural gas furnace at 96 percent efficiency with gas costing $0.18/m3. The house heating load is 120 GJ (see Table 4), and the energy content is 37.5 MJ/m3 (see Table 3).

 x  120
 x 100 000 = $600

If you would like to compare this heating cost with that of other types of heating systems or energy sources, replace the numbers in the formula with the appropriate ones for your comparison using Tables 2 and 3.

Previous  |  Table of Contents  |  Next

Source: Natural Resources Canada (NRCan) - Office of Energy Efficiency