2025 MA Heat Pump Residential Rebate: up to $16,000
2025 MA Heat Pump Commercial Rebate: up to $825,000
Not all will qualify, subject to eligibility requirements
Which Costs Less to Run: Heat Pumps or Oil Heat?
Understanding the Basics, Heat Pumps vs. Oil
Heat Pumps: Heat Pumps are devices that transfer heat from one place to another. They can extract heat from the ambient air temperature outside and move it into your home. This process is reversed in the summer to cool your home, making Heat Pumps versatile for year-round use.
Oil Heat: Oil heating systems burn fuel oil to generate heat. They are a method of heating a home dating back to roughly the 1840s. The efficiency of oil heating systems is measured by their ability to convert fuel into heat, with some energy lost in the process.
What is a BTU?
The British Thermal Unit is a unit of measurement for energy which demonstrates the capacity for a system to heat or cool a space. The higher the BTU rating, the more total heat the system can generate. In technical terms, 1 BTU is determined by measuring the amount of energy required to raise 1 lb of water by 1°F or about the amount of heat in a lit match.
With most electric resistance heating, for example, it takes 1 kWh of electricity to produce 3,413 BTUs of heat. When using an oil-fired system, it typically takes one gallon of heating oil to produce roughly 140,000 BTUs.
What is COP?
Coefficient of Performance (COP) is the measurement showing how much heat is moved or generated vs. the amount of energy (aka “work”) put in. As an example, electric resistance heat has a Coefficient of Performance of 1; because 100% of the energy provided to the system is being output as heat. Most Heat Pumps have a COP of greater than 1, because it takes significantly less energy to move heat from point A to point B instead of creating it from scratch.
What is Distribution Loss?
Distribution loss in HVAC refers to the heat lost on the way from its originating point to its end-use site. This is relevant if you have an oil-fired furnace in your basement, with ductwork spanning the entire home. The heat is generated in the furnace, but then must be pumped throughout the house via ductwork. Unfortunately, a good portion of that heat is lost along the way, escaping via cracks in the home’s ductwork.
Distribution Loss is not a factor when dealing with Ductless Heat Pumps, because they use air-tight copper piping to move refrigerant from one place to another, resulting in 0% distribution losses.
How much heat can you get for a dollar?
The table below shows the amount of heat in BTUs you can expect to receive per dollar spent on various heat sources. Look and see if you could save money by switching to a more efficient heating system.
| Fuel Source | Unit Measure | BTU/unit | Cost/Unit | Efficiency | Distribution Losses | BTU per $1 |
|---|---|---|---|---|---|---|
| Electric | kW Hour | 3,413 | $0.28 | 100% | 0% | 12,189 |
| Propane | Gallon | 90,000 | $3.50 | 82% | 8% | 19,399 |
| Heat Pump COP 2 | kW Hour | 3,413 | $0.28 | 200% | 0% | 24,379 |
| Oil | Gallon | 140,000 | $4.25 | 75% | 8% | 22,729 |
| Wood - Pellet | Ton | 16,000,000 | $275.00 | 65% | 8% | 34,793 |
| Natural Gas | Therm | 100,000 | $1.96 | 82% | 8% | 38,490 |
| Heat Pump COP 3 | kW Hour | 3,413 | $0.28 | 300% | 0% | 36,568 |
| Wood | Cord | 18,000,000 | $250.00 | 60% | 8% | 39,744 |
| Heat Pump COP 3.5 | kW Hour | 3,413 | $0.28 | 350% | 0% | 42,663 |
| Heat Pump COP 4 | kW Hour | 3,413 | $0.28 | 400% | 0% | 48,757 |
*Numbers in this table have been calculated with an outdoor temperature of 47°F.
Which heat source produces the more BTUs per dollar spent, oil or Heat Pumps?
Heat Pumps: Heat Pump efficiency will vary depending on the COP of the system and outdoor temperatures. However, even Heat Pumps with relatively low COPs typically outperform oil heat when measured dollar for dollar.
- Heat Pump COP 2: 24,379 BTUs per $1
- Heat Pump COP 3: 36,568 BTUs per $1
- Heat Pump COP 3.5: 42,663 BTUs per $1
- Heat Pump COP 4: 48,757 BTUs per $1
As the data shows, even a Heat Pump with a COP of 2 provides more BTUs per dollar than oil heat. The higher the COP, the greater the cost savings. For instance, a Heat Pump with a COP of 4 delivers more than double the BTUs per dollar compared to oil heat.
Oil Heat: Oil heating systems typically provide about 22,729 BTUs for every dollar spent. While oil heat has been a reliable method for many years, its cost-effectiveness is limited compared to more modern solutions.
How can a Heat Pump have a Coefficient of Performance over 100%?
In traditional heating systems, such as electric heaters or oil furnaces, efficiency is measured based on the conversion of fuel to heat. These systems cannot exceed 100% efficiency because they can only convert as much energy as they consume. However, Heat Pumps work differently. They don’t generate heat from electricity; instead, they move existing heat from outside to inside.
A Heat Pump uses electricity to power the compressor and fans that transfer heat. Since it’s mostly moving heat rather than creating it, it can transfer more heat energy than the electrical energy it consumes. This results in a COP greater than 1, meaning efficiencies are typically over 100%.
How does the COP of a Heat Pump change in lower temperatures?
The Coefficient of Performance (COP) of a Heat Pump drops in lower temperatures because the Heat Pump must work harder to extract heat from the colder outside air, which contains less ambient heat. This increased effort requires more electricity, thereby reducing efficiency. As outdoor temperatures fall, the temperature difference between the outside and inside increases, necessitating more energy for heat transfer and further lowering the COP. For this reason, it is important to design a system for the amount of BTU’s your home needs according to the design temperature of the city or town you live in. In Massachusetts that design temperature is usually around 8°F for the Metrowest area and varies depending on where you live.
Different models of Heat Pump have different minimum operating temperatures, most ranging from -5°F to -15°F. The COP of the system will continue to decrease as it approaches its minimum operating temperature but will still absolutely be capable of producing the maximum rated BTU output to keep your house cozy.
If you have oil heat, please consider switching to air source Heat Pumps. You’ll save about 50% on your heating costs, help the environment and be more comfortable with Heat Pump air conditioning. Did you know Heat Pump air conditioning is better than regular air conditioning? Check back for a blog post on why this is, how much cheaper it is to operate and why everyone should switch from window AC units to Air Source Heat Pumps for cooling.
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