How to Beat the Oil Man: Savings with Wood

It is no secret that heating a home with heating oil is going to be very expensive. With oil prices rising and no end in site, it is important to find ways to beat the oil man. There are many ways to save money during the heating season.

Improving the insulation in the home and reducing drafts will help keep in much of the heat produced. Keeping the thermostat a little lower and using an extra blanket or throwing on a sweatshirt will also result in lowering heating costs. Replacing less efficient windows and doors will also help keep some of that heat in. And, finding alternative ways to heat the home could save thousands in winter heating costs.

To start, let's take a look at an average winter heating season. In the north this may run, in a regular season, from October to May. The average temperature maintained in the home is 70 degrees. In an average home this equals 800 to 900 gallons of heating oil consumed during the heating season. At a projected $5 per gallon this totals a $4000 to $4500 heating bill.

There are alternative heating fuels on the market. Electricity is always an option. Of course, many people think that electric heat is not directly affected by oil prices. However, just as any product that requires oil to produce or transport, the price of electricity must increase to reflect the cost increase in production, which is often fueled by oil. Electricity can be an expensive heat source in a larger or older home. The average cost per million BTUs (British Thermal Unit) for electric heat is $32.24 at 2007 prices. This is at $0.11 per kilowatt hour. This will rise more as oil prices increase.

Heating oil runs over $35 per million BTUs, while propane pushes $40 per million. Natural gas is a little better at around $20. Wood pellets and corn run around $18 per million BTU. Wood heat is a much more affordable $14 per million for hard wood. The lowest "per million BTU" cost is for coal, however, the mess and difficulty in finding and storing coal makes it a less viable option.

With all of this being said, it is time to look at why wood is such a promising heat alternative. There are many variables that affect total cost and we will address each as it arises. For an average look at heating costs it is estimated that to heat the same house as above, solely with wood, it would take 4 to 5 cord of wood. The first variable comes in the cost per cord of wood.

Wood that comes cut to stove length and split, during the summer months, might be as cheap as $180 per cord to as much as $260. Using the average price of $220, the total heating cost for our average home would be $880 to $1100. That is a quick savings of $3400 to $3620. Buying wood in 4 foot lengths or even tree length can reduce the per cord price by as much as $100. If you have access to wood you can cut yourself the cost per cord can be as low as $5 to $10, the cost of fuel for the saw and transport.

The next step for many is the purchase of a wood stove and installation. This is another variable. The wood stove can cost as little as $500 for a small stove that heats 1000 square feet to as much as $5000 for a decorative unit that will also heat a larger home. A simple wood stove only requires a chimney to hook into and it is ready to heat the home. A larger wood furnace-style burner may require additional duct work throughout the house to provide the most efficient heating. Outdoor furnaces are another option that adds another level of safety, but also an additional tier of cost. A good mid-level wood stove may run around $1500, with average installation costs running around $1000 for full installation, including chimney.

Now, let's put those numbers together. A heating season cost of $1000 for 4 to 5 cord of wood plus $1500 for the stove and $1000 or installation equals a total first year cost of $3500. This still means a savings of $500 to $1000 for the first year, with a promise of much larger savings in the future.

Wood heat does require a little more labor. You must have storage for the wood and then cart the wood to the wood stove as needed. It also requires constant attention to make sure the fire does not go out. For this reason, many people choose to keep their oil furnace running and use the wood heat to supplement the cost. A wood stove can cut the amount of oil used by half. At times the furnace can be shut off and the wood stove used to supply all the heat. Even if half of the heat comes from wood and half from oil the total cost for the heating season drops to $2440 ($440 for two cord of wood and $2000 for 400 gallons of fuel.) This is still in the neighborhood of $2000 in savings.

It's time to take a page out of our grandparents book and go back to a nice wood fire for heat. It is a nice dry heat that welcomes you home. After a day of hard work, the best feeling is knowing that the heat is coming at a reduced price.