Heating Cost Comparison
Every fuel is sold in a different unit, and every appliance wastes a different share of it. Put them all on one scale — dollars per million BTU delivered.
Heating cost comparison calculator
All fuels, ranked
| Fuel | Price | Efficiency | Per MMBtu | Annual cost |
|---|
Every fuel is sold in a unit designed to confuse you
Natural gas comes in therms, or in hundreds of cubic feet, which are not the same thing. Propane and heating oil come in gallons with wildly different energy content — about 91,500 BTU per gallon for propane, 138,500 for oil. Electricity comes in kilowatt-hours, which contain 3,412 BTU each. Firewood comes in cords, which is a volume measure of a material whose energy content depends on species and moisture. Pellets come in tons, which at least is honest.
None of those units can be compared to each other, which is why the only useful common scale is dollars per million BTU delivered to the house. Delivered matters: a fuel's energy content is what you buy, and the appliance's efficiency is what you actually get out of it.
The rank order, and where it breaks
At typical US prices — gas near $1.10 a therm, propane near $2.60 a gallon, oil near $3.60, electricity near 17 cents — the order comes out roughly: natural gas, then a heat pump, then pellets, then firewood, then heating oil, then propane, then electric resistance. Two entries in that list surprise people.
Propane loses to a heat pump almost everywhere. Propane carries 91,500 BTU per gallon and costs about $2.60, so the raw energy costs $28 per million BTU before you burn it at 80 percent efficiency, which pushes the delivered cost to $35. A heat pump at a seasonal COP of 2.6 delivers a million BTU for about $19 at the same electricity price. Propane is the most expensive common heating fuel in the country on a delivered-heat basis, and the only reason it dominates rural heating is that the gas main does not reach those houses.
Resistance electric is worse than everything except propane at high prices. A baseboard heater converts every kilowatt-hour into 3,412 BTU, so its cost per million BTU is purely a function of the electric rate: 17 cents gives about $50, which is why heat pumps replaced resistance heat wherever the climate allowed it.
Efficiency is where the ranking actually moves
AFUE is a seasonal efficiency for combustion equipment: an 80 percent furnace turns 80 percent of the fuel's energy into heat in the ducts, and the rest goes up the flue. A 90 percent condensing furnace recovers enough of the flue gas heat to cross 90, and the difference between those two numbers is roughly an 11 percent reduction in gas use — usually worth it in a cold climate, rarely worth it in a mild one, where the equipment premium does not have enough heating hours to pay back.
Heat pumps are not measured that way. HSPF2 is BTU of heat delivered per watt-hour of electricity over a season, so dividing by 3.412 converts it to a seasonal coefficient of performance: 9.0 HSPF2 is a COP of about 2.64, meaning each kilowatt-hour of electricity delivers 2.64 kilowatt-hours of heat. That is why a heat pump beats a 95 percent furnace in most of the country on operating cost even though electricity costs far more per BTU than gas.
What the table leaves out
Fixed charges. A gas connection costs $10 to $30 a month before a single therm is burned, and a house that switches entirely to a heat pump can often drop the meter and save that as well — which is a real number that never appears in a per-MMBtu comparison. Electricity has fixed charges too, but almost nobody can drop the electric service.
Cold-weather performance. HSPF2 is a seasonal average that assumes a mild-to-moderate climate. In a zone 6 winter a heat pump spends more hours at low outdoor temperatures, where its COP falls toward 1.5, and if the system has resistance strip heat as backup, the seasonal average can be worse than the label suggests. The heat pump versus furnace page models exactly that.
Equipment, maintenance and lifespan. A gas furnace costs less to install than a cold-climate heat pump and lasts about 15 to 20 years; a heat pump lasts 12 to 15 and needs a refrigerant check. Wood is cheap per BTU and expensive per hour of your labour, and it is the only fuel on the list that requires you to be home to feed it.
How to use this in an actual decision
Put your own bill in, not a national average, because the spread between states is larger than the spread between fuels in some markets. Natural gas in Louisiana and in Massachusetts differ by a factor of two; electricity in Washington and in Hawaii differ by a factor of four. Then compare the two options you can actually choose between — usually "keep the gas furnace" versus "install a heat pump" — and add the fixed charge you would drop, the equipment premium, and any state or utility rebate still available.
The federal 25C credit is gone for equipment placed in service after December 31, 2025, so the incentive side of that arithmetic is now state and utility programs only. Some are large: Massachusetts still pays $1,500 to $3,000 on an air-source heat pump through Mass Save, and Colorado stacks a state credit with utility rebates. Those change the answer more than a ten cent difference in the electric rate.
Frequently asked questions
Is it cheaper to heat with gas or a heat pump?
At 17 cents a kilowatt-hour and $1.10 a therm, a heat pump with a seasonal COP of 2.6 costs about $19 per million BTU and an 80 percent gas furnace costs about $14, so gas wins. The heat pump only takes the lead once gas passes roughly $1.50 a therm at that electric rate. The crossover moves with both prices, which is why the calculator takes yours.
Why is propane so expensive per BTU?
Because it carries only 91,500 BTU per gallon and costs about $2.60, so the raw energy is near $28 per million BTU before the furnace's 80 percent efficiency is applied. Delivered cost lands around $35, more than a heat pump at typical electric rates.
Is electric resistance heat really that bad?
It is 100 percent efficient, which sounds good until you notice that a heat pump is 260 percent efficient seasonally. At 17 cents a kilowatt-hour, resistance heat costs about $50 per million BTU against $19 for a heat pump, so it is nearly three times the operating cost.
How many BTU are in a cord of wood?
Roughly 20 million for a cord of seasoned hardwood, but it varies by species and moisture: oak near 24 million, pine near 15, and green wood loses a large share of that to boiling off water. A cord is 128 cubic feet stacked, which is not the same as 128 cubic feet of solid wood.
What AFUE should I use for an old furnace?
A furnace from the 1980s is typically 65 to 75 percent, a 1990s unit 78 to 80, and anything with a PVC flue is 90 or above. If you do not know, 80 is a safe assumption for a standard atmospheric-vent furnace.
Does this include the cost of the equipment?
No. It compares operating cost per unit of heat only. Equipment, installation, maintenance and any rebates belong in a separate comparison, which the heat pump versus furnace page handles.
Why does my bill not match the calculation?
Fixed charges, taxes, delivery fees, and the difference between a seasonal average efficiency and what your equipment actually achieves. A dirty furnace or a duct system leaking into the attic can waste 20 percent before the fuel is even counted.
Disclaimer: This tool compares fuel cost per unit of delivered heat for planning purposes. It excludes utility fixed charges, delivery fees, equipment cost and non-fuel operating costs, and it uses seasonal average efficiencies rather than the efficiency at any one outdoor temperature.
Citing this page? FigureMill, “Heating Cost Comparison” (last reviewed October 30, 2026). Delivered cost per million BTU for natural gas, air-source heat pump, fuel oil, propane, resistance electric, wood pellets, and cordwood, all on one $/MMBtu basis. https://figuremill.com/hvac/heating-cost-comparison
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