About the Heating Fuel Cost Comparison
This heating fuel cost comparison puts seven ways of heating a home on the same footing: the cost of one million Btu (MMBtu) of heat actually delivered to your rooms. Fuel is sold in different units — therms, gallons, kWh, tons and cords — and burned at different efficiencies, so the sticker price alone is misleading. Enter your local prices and appliance efficiencies and the calculator ranks natural gas, propane, heating oil, electric resistance heat, a heat pump, wood pellets and cordwood from cheapest to most expensive.
It is useful when choosing a new heating system, deciding whether to add a pellet or wood stove, judging whether a propane price quote is good value or checking how a heat pump compares with your furnace at today’s electricity price. Enter your yearly heat need to turn cost per MMBtu into a yearly bill for every fuel.
Energy contents follow the U.S. EIA: 100,000 Btu per therm of gas, 91,452 Btu per gallon of propane, 138,500 Btu per gallon of heating oil, 3,412 Btu per kWh and 20 million Btu per cord of wood; pellets are taken as 16.5 million Btu per ton (about 8,250 Btu per pound). Cordwood energy varies a lot with species and moisture, so treat wood results as approximate.
How to use the heating fuel cost comparison
- 1Enter your yearly heat need in MMBtu, or keep the default to compare rates only.
- 2Enter local prices for each fuel you could use (set a price to 0 to leave that fuel out).
- 3Adjust efficiencies to match the equipment you have or are considering.
- 4Read the cheapest fuel and compare costs per MMBtu in the chart and ranking table.
Formula and method
Each fuel’s price is divided by the useful heat one unit delivers — its energy content multiplied by the appliance efficiency — and scaled to one million Btu. For furnaces, boilers and stoves the efficiency is a fraction (95% AFUE = 0.95). Electric resistance heat is 100% efficient, while a heat pump’s efficiency is its seasonal coefficient of performance, so a COP of 3 divides the electricity cost by three.
Multiplying the cost per MMBtu by your yearly heat need gives the yearly bill for each option, and dividing the heat need by the useful Btu per unit gives how many therms, gallons, kWh, tons or cords you would buy. Energy contents are EIA averages; wood pellets are taken as 16.5 MMBtu per ton.
- Price per unit
- Your price per therm, gallon, kWh, ton or cord
- Btu per unit
- Energy content of one unit of fuel
- Efficiency
- AFUE or stove efficiency as a fraction, or heat pump COP
Worked examples
Typical US prices
Gas at $1.40 a therm in a 95% furnace costs $14.74 per MMBtu, just ahead of a COP-3 heat pump at $16.61. Propane ($29.93) and oil ($33.13) cost about twice as much, and baseboard electric heat is the most expensive at $49.82.
No natural gas available — propane vs heat pump vs pellets
With no gas line (price set to 0, so it is excluded), a COP-2.8 heat pump on $0.14 electricity delivers heat for about $14.65 per MMBtu — far less than propane at $3.20 a gallon ($36.83) or pellets ($24.24).
Cheap local firewood
At $180 a cord in a 70% efficient EPA-certified stove, wood costs about $12.86 per MMBtu, beating a heat pump on expensive $0.30 electricity ($29.31) — if you are willing to split, stack and load it.
Frequently asked questions
What is the cheapest way to heat a house?+
Where natural gas is available it is usually cheapest per MMBtu, closely followed by heat pumps. Without gas, a heat pump is typically cheaper than propane, oil or electric resistance heat, and cheap local firewood can be cheapest of all.
Is propane or heating oil cheaper?+
Compare per MMBtu, not per gallon. A gallon of oil holds about 138,500 Btu versus 91,452 for propane, so oil at $3.90 in an 85% boiler costs about $33 per MMBtu, while propane at $2.60 in a 95% furnace costs about $30.
How do I convert a propane price to a natural gas equivalent?+
Divide the price per gallon by 0.91452 to get the cost per therm-equivalent of energy (before efficiency). Propane at $2.60 a gallon is about $2.84 per therm-equivalent, roughly double gas at $1.40 per therm.
How much heat is in a cord of wood?+
The EIA uses about 20 million Btu per cord, but dense, well-seasoned hardwoods such as oak can exceed 24 million while softwoods or wet wood may deliver far less. A modern EPA-certified stove turns about 65–75% of that into room heat.
What heat pump COP do I need to beat gas?+
Divide the cost per MMBtu of electric resistance heat by the cost per MMBtu of gas. At $0.17/kWh and $1.40/therm in a 95% furnace that ratio is about 3.4, so a heat pump needs a seasonal COP above 3.4 to win on running cost.