How this calculator works
The only fair way to compare fuels is the price of one unit of heat that reaches the house. Each fuel contains a known amount of energy, and each heating system turns only part of it into useful heat (its efficiency). A heat pump is the exception: it moves heat instead of making it, so each unit of electricity delivers 2 to 3.5 units of heat.
The energy in each unit: electricity 3,412 BTU per kWh, natural gas 100,000 BTU per therm, propane 91,500 BTU per gallon, heating oil 138,500 BTU per gallon, seasoned hardwood about 24 million BTU per cord, and pellets about 16.4 million BTU per ton.
Worked example: a 1,800 ft² house in a moderate climate (30 kBTU per ft² per year) with average insulation needs 1,800 × 30 = 54 million BTU of heat a year. Natural gas at $1.45 per therm in a 95% furnace costs $1.45 ÷ (0.1 × 0.95) = $15.26 per million BTU, or $824 a year. Electric resistance heat at 17 cents per kWh costs $0.17 ÷ 0.003412 = $49.82 per million BTU, or $2,691 a year. A heat pump with a COP of 2.5 delivers the same heat for $19.93 per million BTU, or $1,076.
Energy in each fuel, and a typical efficiency
These are the constants the calculator uses.
| Fuel | Energy per unit | Typical efficiency | Useful heat per unit |
|---|---|---|---|
| Electricity (resistance) | 3,412 BTU per kWh | 100% | 3,412 BTU per kWh |
| Electricity (heat pump) | 3,412 BTU per kWh | 250% (COP 2.5) | 8,530 BTU per kWh |
| Natural gas | 100,000 BTU per therm | 95% | 95,000 BTU per therm |
| Propane | 91,500 BTU per gallon | 95% | 86,925 BTU per gallon |
| Heating oil | 138,500 BTU per gallon | 85% | 117,725 BTU per gallon |
| Firewood (seasoned hardwood) | 24 million BTU per cord | 70% | 16.8 million BTU per cord |
| Wood pellets | 16.4 million BTU per ton | 80% | 13.1 million BTU per ton |
Tips before you buy
- Use your own latest prices. Fuel prices change by region and by season, and the cheapest option can flip with a few cents.
- Electric baseboard and electric furnaces are 100% efficient but are usually the most expensive way to heat, because a kWh of electricity costs far more than a kWh of heat from gas.
- A heat pump uses about a third to a half of the electricity of resistance heat. It loses some efficiency in very cold weather, and cold-climate models hold up better. Use a lower COP if winters are harsh.
- Cutting the heat the house needs (attic insulation, air sealing, weatherstripping) lowers every fuel's cost by the same percentage, so it works whichever fuel you use.
- Wood and pellets are cheap per unit of heat but need space, storage and handling, and wood needs a chimney. Buy pellets and firewood in the summer, when they cost the least.
- This compares running costs only. A new furnace, a heat pump install or a wood stove has a purchase price, and some have rebates or tax credits worth checking.
Tools & materials for this project
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Frequently asked questions
What is the cheapest way to heat a house?
It depends on what you pay for each fuel. Natural gas and heat pumps are usually the cheapest, wood can be cheap if you have the supply and the stove, and electric resistance heat is usually the most expensive. Enter your own prices to see.
Is a heat pump cheaper than gas?
With a COP of 2.5 against a 95% gas furnace, a heat pump is cheaper whenever electricity costs less than about 13 cents per kWh while gas costs $1.45 per therm. At a COP of 3.0 the break-even rises to about 16 cents per kWh. Higher gas prices favor the heat pump, and higher electricity prices favor gas.
How much does it cost to heat a 2,000 square foot house?
In a moderate climate with average insulation, the heat needed is about 60 million BTU a year. At the example prices, that is about $916 with natural gas, $1,196 with a heat pump (COP 2.5), $1,933 with propane, $1,988 with oil and $2,989 with electric resistance heat.
Why is electric heat so expensive?
Electricity carries 3,412 BTU per kWh, so at 17 cents a kWh the heat costs about $50 per million BTU, while gas at $1.45 per therm costs about $15 per million BTU with a 95% furnace.
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Estimates only. Results assume standard materials and simple shapes. Supplier products vary, and the final call on quantity, structure and safety is yours. Check your local code and your supplier's guidance before ordering.