Homeowners and people who cover their own utilities should expect to pay somewhere between $4.23 and $19 per month if their home is heated with one of the three principal systems designed to run on electricity: radiant floor heating, heat pumps or resistive heating.
Monthly Heating Costs by City for Electric Systems
| City | Monthly Cost (Electric Radiant Heating) | Monthly Cost (Heat Pump) | Monthly Cost (Resistive Heating) |
|---|---|---|---|
| Detroit | 12.67 | 5.28 | 15.84 |
| Chicago | 10.14 | 4.23 | 12.67 |
| Minneapolis | 10.77 | 4.49 | 13.46 |
| Milwaukee | 12.04 | 5.02 | 15.05 |
| New York | 15.21 | 6.34 | 19.01 |
The analysis focused on four Midwestern cities and added New York City for its lower number of heating degree days but higher utility costs. Three major factors are in play:
Type of System: A heat pump, which can operate like a standard air conditioner in reverse, provides up to 300 percent efficiency, but this drops as the temperature approaches freezing. The second most common heating system is resistive, which includes space heaters, in-window units with heating strips, and similar devices. The final option, growing in popularity in the Midwest, is electric radiant heating, which is similar to radiators, but are run under the existing floors.
Overall Climate: The number of heating degree days is an industry-standard calculation that simply adds up the amount of time that the weather is cooler than 65 degrees Fahrenheit. However, while Minneapolis and Milwaukee see more days requiring a heater to run than Detroit or New York, the principal factor affecting cost is actually the cost of electricity from the utility.
Utility Costs: In this case, Chicago and Minneapolis residents see the lowest charges, while New York stands out the other way for its pricing. We kept housing size the same, so although it might be more common to see 2,200 sq. ft. homes in Detroit than in the Big Apple, the analysis tried to keep things even.
Monthly Heating Costs by House Size for Electric Options
| Home Size | Monthly Cost (Electric Radiant Heating) | Monthly Cost (Heat Pump) | Monthly Cost (Resistive Heating) |
|---|---|---|---|
| 2-bedroom | 6.91 | 2.30 | 8.64 |
| 3-bedroom | 9.22 | 3.07 | 11.52 |
| 4-bedroom | 11.53 | 3.84 | 14.40 |
Another way to drill down into the data is to explore different sizes of living spaces: while most people associate a home with a detached house, others live in apartments, condos, and additional living situations. The above reflects a dive deeper into Michigan and Detroit specifically (Oasis HVAC is based just outside of Detroit in St. Clair Shores) and the average home sizes in the Detroit Metropolitan Area.
Of particular note is the difference in electric radiant heating versus resistive heating. A heat pump will always be the most economical option, but few people realize that radiant floor heating has a benefit over resistive heating: the denser the object that is heated, the longer it retains its heat. (This is why if you blow on your hands during the winter, they have to be very close to your mouth to have an effect: the air is cooled down rapidly by its surroundings.)
Again, size plays a role, but it is mostly linear: for every additional square foot, the cost of heating will increase at the same rate, it just depends on the method used. However, sizes can be misleading, and we wanted people who do not live in the Detroit area to get a sense for how the costs differ. To do so, we found the average square footage of homes in New York and Chicago, as well as apartments and townhomes. Below you can use the table to map the square footage to heating costs above.
Housing Square Footage and Population Percentages
| City | Detached Homes | Apartments/Townhomes |
|---|---|---|
| Detroit | 1,400 sq. ft. (65% of city population) | 1,000 sq. ft. (35% of city population) |
| New York | 2,000 sq. ft. (10% of city population) | 750 sq. ft. (90% of city population) |
| Chicago | 1,750 sq. ft. (25% of city population) | 1,000 sq. ft. (75% of city population) |
Monthly Heating Costs with Averages Excluding May-Sep (Electric Options)
| System | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec | Avg (Excl. May-Sep) |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Electric Radiant Heating | 22.89 | 19.45 | 15.92 | 9.31 | 4.26 | 0.66 | 0.00 | 0.28 | 1.79 | 7.63 | 13.05 | 19.96 | 15.46 |
| Heat Pump | 9.54 | 8.10 | 6.63 | 3.88 | 1.78 | 0.28 | 0.00 | 0.12 | 0.75 | 3.18 | 5.44 | 8.32 | 6.44 |
| Resistive Heating | 28.61 | 24.31 | 19.90 | 11.64 | 5.33 | 0.83 | 0.00 | 0.35 | 2.24 | 9.54 | 16.31 | 24.95 | 19.32 |
The final way to drill down into heating costs with electrically-run systems is to compare a month-by-month cost, since someone isn’t paying the same in April that they are in January. For this model, we utilized the heating-degree days for Detroit, along with the average house of roughly 2,200 sq. ft. We ran estimates based on the amount of time that resistive heating vs. radiant heating systems would need to run, and compared that to the Bureau of Labor Statistics’ most recent utility rates for Detroit.
As one would imagine, there is a very high usage in the coldest winter months of December, January and February that starts to tail off in March. The estimates for May and June, in comparison, could be offset simply by wearing a sweatshirt on unseasonably chilly days.
What it does show, however, is that Detroit and other Midwestern cities have significant “shoulder” seasons that should be accounted for when budgeting for heating (and consequently cooling) bills because while they are relatively small compared to peak usage, they still add up over the course of the year in a way that is not necessarily true in more Southern climates.
Final Thoughts
Since this piece focused specifically on electrically-powered heating systems, two extremely common systems were left out of the equation: hydronic systems with wall radiators are very popular throughout the Midwest and anywhere with older architecture, and furnaces remain the number one option for heating in nearly every state where a heating system is required.
What this does show, and markedly so, is the impact that a heat pump can have on utility bills compared to buying ad hoc space heaters or even radiant floor systems. When one considers that states like our home in Michigan offer rebates for these energy-saving systems that can cover the full cost, it is worth investing in research if one is buying a new home or looking to renovate their existing heating system.
For more information or a copy of this report, contact us for a PDF copy.
