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Fuel Costs - Wood Vs. Oil Vs. Gas Vs. Pellet Stove

Daisy Cuinn

Cost is a major factor when choosing a heating fuel for your home. How much it will cost to heat your home mostly depends on the efficiency of the heating unit. A poorly maintained or inefficient heater or stove will burn more fuel, leading to higher fuel bills. The fuel itself the other major factor. If you've narrowed it down to wood, oil, gas or pellets, there are a few pros and cons to consider.


Wood is one of several home heating options.

Wood is the most old-fashioned type of heating system, and also the one that creates the highest amount of air pollutants. The efficiency of wood stoves vary, but most will use about four or five cords of wood a winter. A cord of wood is roughly equivalent to 20 million British Thermal Units (BTUs) of heat energy. Wood generally costs less than oil, gas or wood pellets. If you cut it yourself, the cost is significantly lower. The price of a cord of cut wood as of 2011 ranges from about $100 to $200, depending on the supplier.


Oil burns cleaner than wood or wood pellets, and about as clean as gas. With oil heating, an oil tank must be filled every four to six weeks in the winter, less often in the warmer months. Larger tanks may only need to be filled once or twice a year. Oil prices rise and fall frequently, but a medium-efficiency oil heater will cost around $20 per 1 million BTU if the unit cost of heating oil is $2. Multiply that by the estimated number of BTUs your home uses; 20 million BTU, which would amount to $400 in this example, roughly equals a cord of wood.


Natural gas is about as clean-burning as oil, and significantly cleaner than wood or pellets. Gas is delivered via gas lines, so there is no tank to fill as with oil delivery. The cost of natural gas fluctuates often, but if you have a gas heater with medium efficiency it will cost about $25 per 1 million BTU at unit cost of $2. In other words, 20 million BTUs will cost $500.

Wood Pellets

Wood pellets burn in special, more efficient wood burning stoves that create less ash pollution than regular wood, but are not as clean-burning as oil or gas. Wood pellets are made of compressed sawdust, often waste from the production of wood furniture and other items. Wood pellets are sold in 40-lb. bags that cost about $6 each, or around $250 a ton as of 2011. It takes about a half-ton of pellets, or around $125 to $150, to equal a cord of wood, or 20 million BTU of heat energy.