Do Electric Rates Impact Wood Heat?

Electric heat is clean in the home,
but not when its made and line
losses are significant.

When the price of oil goes up, it goes up for everyone.  But electricity rates vary widely by state with residents of some states paying double what they pay they other states.  New York and Connecticut saddled with the highest electricity rates in the country, which may have contributed to the rapid rise of wood heating in those states.  Conversely, in the south where electricity rates are the cheapest, the use of wood heat decreased in most states between 2000 and 2010. 

Electric heating has surged in recent years – though not as fast as wood heat – in part because of more efficient heat pumps.  Residential geothermal heat is slowing gaining traction but requires a lot of electricity to pump the heat from the earth through the home, leading some experts to regard it simply as very efficient electric heat, not as a renewable. (Electricity for geothermal heat costs an average of $10.43 per million Btus compared to $12.63 per million Btus if you purchase cordwood.)

The economic disadvantages of fuel oil and propane as heating fuels are often discussed, but electricity is a more complex story.  More than a third of American homes use electricity as the primary source of heat (US Census) and another 24% use it as a secondary heat source (EIA).  Granted many of them are in the south, where the heating load is smaller but more northern states can have surprisingly high rates of electric heating.  For example, 15% of homes in Connecticut, where electricity is second in price only to Hawaii, primarily use this form of heating (US Census).  

An electric boiler costs an estimated $35.05 per million Btu, according to EIA, and an electric space heater, a common appliance used for secondary heating, costs an estimated $34.32 per million Btu.  An EPA certified wood stove running at 72% efficiency, in contrast, is estimated to cost only $12.63 per million Btu.       

These EIA calculations assume that electricity costs only 11 cents per kWh.  However, half of the U.S. averages more than that amount.  In northeastern states such as New York and Connecticut where electricity costs over 17 cents, the cost of using an electric heater can be as high as $56.42 per million Btu.  This may make consumers think twice before buying an electrical space heater instead of a wood stove as a secondary space heater. 

Map of average U.S. electricity prices by the Alliance for Green Heat. Click to enlarge.

Consumer rates in Alaska, California, Maryland, New Jersey and Washington DC are on the high side, ranging from 14 - 17 cents per kWh (an average of $41 - $50 per Btu for electric heating).  The majority of homeowners in the south, west and midwest pay 9 - 13 cents per kWh for their electricity, which works out to about $26 - $38 per Btu.  That is a much cheaper rate than some states, but still twice the cost of heating with wood.

Pacific northwestern states with a strong hydro-electric presence and Appalachian states with an abundance of coal typically average electricity costs below 9 cents per kWh.  Idaho has the cheapest average electricity rate of any state at 7.99 cents per kWh, thanks to low demand and a large number of dams on the Snake River.    

To compare heating fuel costs in your home, download the EIA’s comparison calculator here: www.eia.gov/neic/experts/heatcalc.xls