Heating Cost Comparison
What does heating with natural gas, heating oil, propane or a heat pump cost? Compare annual energy cost at the same heat demand — in dollars, with US prices.
Key facts
- At 60 MMBTU of heat and 2025/26 EIA prices, natural gas heats cheapest (~$848/year), followed by a heat pump (COP 3.0, ~$1,014). Heating oil (~$1,774) and propane (~$1,754) cost roughly twice as much.
- The key lever for a heat pump is the COP: at COP 3.0, 1 kWh of electricity delivers 3 kWh of heat. Raising the COP from 3.0 to 3.5 cuts heat-pump cost proportionally by about 14%.
- The comparison counts running energy cost only. Purchase and installation (a heat pump costs more upfront than a gas furnace) and tax credits (IRA) are not included — factor them into the total picture.
FAQ
- Which heating is cheapest in the US?
- On energy cost, natural gas is usually cheapest, followed by an efficient heat pump. Heating oil and propane cost noticeably more per unit of delivered heat. The calculator compares all four at the same heat demand with your prices.
- What is MMBTU and how do I find my heat demand?
- MMBTU = one million BTU of delivered heat. An average US home needs roughly 40–90 MMBTU of heat per year (default 60). Reference: 1 therm of gas ≈ 0.1 MMBTU, 1 gallon of heating oil ≈ 0.1385 MMBTU — multiply your annual usage accordingly.
- Is a heat pump cheaper than gas?
- It depends on your electricity price and COP. With cheap natural gas, gas is often slightly ahead on energy cost; against pricey oil/propane or with a high COP, the heat pump wins clearly. Purchase cost and IRA tax credits further shift the total picture.