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Addressing affordability: Why fossil fuels are not the answer

by Jared Duval, EAN Executive Director

January 22, 2025

One thing nearly all Vermonters seem to agree on is that we want living in our state to be more affordable. When it comes to energy, continued dependence on high-cost and price-volatile fossil fuels like gasoline, fuel oil, and propane is not a path to affordability.

In 2023, $2.2 billion was spent on fossil fuels for transportation and heating in Vermont. The average Vermont household spent between $5,000 – $8,000 on combined transportation, heating, and electricity costs (and that’s just for fuel, not including equipment or maintenance costs), with the highest amounts spent on gasoline, fuel oil, and propane.

If we want to lower Vermont’s energy bill and help more Vermonters — especially lower- and middle-income Vermonters — achieve energy affordability, then we need to do more to support access to the modern, efficient equipment that can provide savings year after year by using lower-cost, more price-stable energy.

Modern electric technology — including electric vehicles, heat pumps, and heat pump water heaters — is far more energy efficient than fossil fuel equipment. And using less energy to accomplish the same tasks opens up significant opportunities to save on energy costs.

Gas and diesel engines are terribly inefficient. Only about 16-25% of the energy from gasoline in an internal combustion vehicle actually ends up being delivered to the wheels and moving the vehicle. The vast majority of the energy from burning gasoline is lost in the form of heat and other engine losses. This inefficiency translates to both wasted energy and wasted money.

In contrast, in an electric vehicle (or EV), about 87-91% of the energy used ends up being delivered to the wheels, which is about three to five times more efficient. Put another way, the same amount of energy that it takes to move a gas vehicle 100 miles can move an EV about 350-550 miles.

Electricity prices are also much more stable than fossil fuels. For example, the current average price of gasoline in Vermont is about $3.12/gallon – but it was as high as $5.05/gallon as recently as June of 2022. In contrast, the average price per gallon-equivalent to charge an EV has held steady between $1.60 to $1.71 a gallon over the last two years, with far lower prices available for those drivers who sign up for EV rates that may be offered by their utility (currently $1.20/gallon-equivalent with GMP and $0.94/ gallon-equivalent with BED). The lower cost of EV charging versus gasoline enables significant fuel cost savings, month in and month out.

There are also maintenance savings that come with EVs, by virtue of having fewer moving parts. This includes no oil changes; no fuel filter, spark plug, or timing belt replacements; and no engine or transmission to repair. Add it all up and EVs are far more affordable to run and maintain than buying a new or used gas car, with average savings on fuel and maintenance from an EV totalling about $9,500 over the life of the vehicle. And with federal and/or utility incentives, the up-front cost of a new or used EV is now often the same or less than than a comparable new or used gas vehicle.

Or consider water heating. Even without any incentives, over its life an electric heat pump water heater is estimated to cost $3,000 less than a propane water heater. Again, the savings come from a combination of using more efficient equipment (heat pump water heaters are about four times more efficient than propane water heaters) and the lower cost of electricity compared to high-cost and price-volatile propane. Heat pump technology is able to provide heat so much more efficiently because it uses energy to transfer rather than generate heat.

These savings are something I know about not just from data and research, but from personal experience. Years ago, I took out loans to make investments to end fossil fuel use for my home heating and vehicle in favor of more energy efficient and cost-saving technologies, including with weatherization, a wood pellet stove, a heat pump water heater, and an electric vehicle. As a result, I have saved from hundreds to thousands of dollars per year.

Of course, cleaner and more efficient choices aren’t always cheaper. However, there are many more opportunities to save Vermonters money by moving away from fossil fuels and fossil-fueled equipment than are yet being taken advantage of.

As a state, we should work to help more Vermonters access the savings and benefits that are possible thanks to more energy efficient and clean energy options. We especially need to provide lower-income Vermonters the financial support they need to make this transition, including overcoming the real barrier of the up-front costs of new equipment.

Continuing to leave Vermonters exposed to and dependent on these high-cost, price-volatile fossil fuels is not an affordability strategy. What can lead to energy affordability is helping more Vermonters transition to more efficient energy options that can deliver significant and durable cost savings year after year, including with weatherization, heat pumps and heat pump water heaters, advanced wood heat, and electric vehicles.