About the Heating Cost Calculator
This heating cost calculator compares what it costs to deliver the same amount of heat to your home with five common systems: a natural gas furnace, a propane furnace, an oil boiler or furnace, electric resistance heat (baseboards, electric furnace) and an air-source heat pump. Enter your local fuel prices and equipment efficiencies, and it shows the yearly bill for each option, the cheapest choice and how much you could save compared with your current system.
Use it when your furnace is due for replacement, when deciding whether a heat pump makes sense, or simply to answer the classic question “is propane or natural gas cheaper?” with current prices. The comparison is fair because every option delivers the same heat; only the fuel price, energy content and efficiency change.
Heat demand is entered in million Btu (MMBtu) of delivered heat per year. Many US homes need somewhere around 30–80 MMBtu depending on size, insulation and climate. If you know last winter’s fuel use, multiply it by the fuel’s energy content and your equipment efficiency — for example 700 therms of gas at 95% efficiency is about 66.5 MMBtu. Heat pump efficiency is entered as a seasonal coefficient of performance (COP), which falls in very cold weather.
With the default inputs, the your current yearly heating cost is $884.21. Change any value above to recalculate instantly.
How to use the heating cost calculator
- 1Estimate your home’s yearly heat need in MMBtu (or keep the default).
- 2Choose your current heating system.
- 3Enter local prices for gas, propane, oil and electricity.
- 4Adjust equipment efficiencies to match your furnace or heat pump.
- 5Compare the yearly costs and see the savings from switching to the cheapest option.
Formula and method
Every option must deliver the same heat to the house. The fuel you have to buy is the heat needed divided by the fuel’s energy content and the equipment efficiency, then multiplied by the price. Energy contents used: natural gas 100,000 Btu per therm, propane about 91,452 Btu per gallon, heating oil about 138,500 Btu per gallon and electricity 3,412 Btu per kWh (EIA figures).
Furnace and boiler efficiency is the AFUE rating (95% means 95% of the fuel’s energy becomes useful heat). Electric resistance heat is treated as 100% efficient. A heat pump moves heat rather than making it, so its electricity use is the heat needed divided by its seasonal coefficient of performance (COP): a COP of 3 means three units of heat per unit of electricity.
- Heat needed
- Delivered heat per year (1 MMBtu = 1,000,000 Btu)
- efficiency
- AFUE for furnaces/boilers, or COP for heat pumps
- price
- Your price per therm, gallon or kWh
Worked examples
Typical home on natural gas
60 MMBtu at 95% efficiency needs about 632 therms of gas, costing $884 at $1.40 per therm. The same heat would cost about $1,796 with propane, $1,988 with oil, $2,989 with baseboard heat and $996 with a COP-3 heat pump, so gas is cheapest here.
Rural home on propane considering a heat pump
Heating 50 MMBtu with propane at $3.00 a gallon and 95% efficiency costs about $1,727. A heat pump with a seasonal COP of 3 uses about 4,885 kWh, costing $733 at $0.15/kWh — saving roughly $994 a year.
Oil boiler in an expensive-electricity state
At 82% efficiency, 80 MMBtu requires about 704 gallons of oil, or $2,536 a year. With electricity at $0.30/kWh a COP-2.7 heat pump costs about $2,605 — slightly more — while natural gas, if available, would be cheapest.
Frequently asked questions
Is propane or natural gas cheaper for heating?+
Compare the cost per million Btu. A gallon of propane holds about 91,500 Btu versus 100,000 Btu in a therm of gas, so propane at $2.60/gal costs roughly $28 per MMBtu while gas at $1.40/therm costs $14. Natural gas is usually much cheaper where it is available.
Is a heat pump cheaper than a gas furnace?+
It depends on the ratio of electricity to gas prices and the heat pump’s COP. With gas at $1.40/therm and electricity at $0.17/kWh, a heat pump needs a seasonal COP above about 3.4 to match a 95% gas furnace. In mild climates or with cheaper power it often wins.
How much heat does my house need per year?+
Multiply last winter’s fuel use by its energy content and your equipment efficiency. For example, 800 gallons of heating oil × 138,500 Btu × 0.85 is about 94 MMBtu. Homes typically need 30–80 MMBtu, more in cold climates or with poor insulation.
What is AFUE?+
Annual Fuel Utilization Efficiency is the share of a furnace or boiler’s fuel energy that becomes useful heat over a season. Older furnaces are often 60–80% AFUE, while modern condensing gas furnaces reach 95–98%.
What is a heat pump COP?+
The coefficient of performance is heat delivered divided by electricity used. A COP of 3 gives 3 kWh of heat for every 1 kWh of electricity. COP drops as outdoor temperatures fall, so use a seasonal average rather than a best-case rating.