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Costs of various heating systems
Sep 18, 2015

by Sean Woroniak

If you are in the market to purchase an existing home, build a new home or renovate the home you are currently living in, it can really pay to understand the different costs associated with various types of heating systems.

Manitoba experiences some of the coldest winters in Canada, so it’s no surprise that almost 60 per cent of a typical Manitoba home’s energy bill is for heating. Water heating is the second largest use of energy in your home, accounting for almost 15 per cent of your annual energy costs.

The energy source you use for heating your home and water can have a substantial impact on the size of your energy bills. As a homeowner, home and water heating systems are one of the few purchase decisions that come with two price tags.

The first price tag is the upfront cost which can vary significantly among heating systems. For example, the typical cost to install an electric forced-air furnace is $2,000 to $3,000 (without an electrical panel upgrade), whereas a high-efficiency natural gas furnace installation can run between $3,500 to $5,500. It may appear that the less expensive system is the one with the lowest upfront price tag, but this isn’t necessarily the case.

What you need to also consider is the second price tag, which is the cost to operate the heating system over its life. For example, it costs $1,274 annually to heat a typical Manitoba home using an electric furnace based on current energy rates. It would cost $666 annually to heat that same home with a high-efficiency natural gas furnace. That equates to savings of over $600 per year. When you consider that the average life of a heating system is 25 years, your total lifetime cost to own the electric furnace is $33,850 and $22,150 for the natural gas furnace. When considering the total lifetime cost (which is the cost to buy and install the system, plus the cost to operate over its life) you can save almost $12,000 by choosing a natural gas heating system.

The concept of total lifetime cost also applies to your water heating equipment. For example, a 60-gallon electric water heater in a typical Manitoba home (2.4 people living in the home) would cost approximately $800 to $1,200 upfront, and approximately $290 per year to operate. Over a 10-year period the total lifetime cost of that electric water tank would be $3,700.

In comparison, a power-vented natural gas water heater (with an energy factor of 0.67) in the same home would cost approximately $1,700 to $1,900 to install and $123 per year to operate. The natural gas water heater in this example would have a total lifetime cost of $3,130.

One of the realities of water heating systems is that we don’t typically plan ahead for their replacement.  It’s not uncommon with older systems to wake up one day with no hot water or a leaking water tank in the basement. In the rush to replace our tank quickly, we don’t have the time to look into our options.

If your water heater is nearing the end of its life (average life of water heaters is 10 years), now is the time to start thinking about what kind of heating system you want to have installed. A planned and well thought-out replacement of your water heater could end up saving you hundreds of dollars.

Whether you are in the market for a heating system for your home or water, Manitoba Hydro recommends that you carefully look into the options available to you. Consider various factors, such as how energy efficient the system is, the total lifetime cost (not just the upfront cost), and the environmental or comfort benefits the heating system may offer.

When you are ready to purchase a new heating system speak to a reputable and licensed contractor. A contractor, who is a member of the Manitoba chapter of the HRAI (Heating Refrigeration Air Conditioning Institute), is a good place to start. It’s always a good idea to get quotations in writing from multiple contractors so that you can compare and get the best value for your investment. Contractors should not charge for estimates.

Finally, you should know that Manitoba Hydro is here to help, whether you want more information on heating systems or want to take advantage of one of our many Power Smart Programs, including on-bill financing.

Visit hydro.mb.ca/heating for more information or to use an interactive online calculator for a customized estimate on annual operating and total lifetime costs of heating systems for your home.

(Sean Woroniuk is the marketing strategies officer, Strategic Marketing Initiatives, for Manitoba Hydro.)