How it works
Fuels are sold in different units, so the fair way to compare them is the cost of one million Btu of heat that actually reaches your home. That is the fuel price divided by its energy content, then divided by how efficiently your equipment turns it into heat. This is the standard way to compare heating fuels.
Energy contents used here are EIA figures: 100,000 Btu per therm of natural gas, 91,452 Btu per gallon of propane, 138,500 Btu per gallon of heating oil and 3,412 Btu per kilowatt-hour. Wood pellets are taken as about 16.5 million Btu per ton, burned in an 80% efficient stove.
A heat pump moves heat rather than making it, so it delivers more heat than the electricity it uses. Its coefficient of performance (COP) measures this: a COP of 2.5 means 2.5 units of heat for every unit of electricity. Electric baseboard and furnaces have a COP of 1.
To estimate your heat need, take last winter’s fuel use, multiply by the energy content and your furnace efficiency, and divide by one million. For example, 700 therms of gas in a 90% furnace is 700 × 100,000 × 0.9 ÷ 1,000,000 = 63 million Btu.
Formula
Cost per million Btu = price per unit ÷ (Btu per unit × efficiency) × 1,000,000; season cost = cost per million Btu × heat needed
Questions people ask
Is propane or natural gas cheaper for heating?
Natural gas almost always is. A gallon of propane holds about 0.91 therm of energy, so propane at $2.80 a gallon costs about the same as gas at $3.06 a therm, roughly twice typical gas prices.
Is a heat pump cheaper than a gas furnace?
It depends on your prices and climate. At 17¢/kWh and a COP of 2.5, heat costs about $19.93 per million Btu, versus $16.67 for gas at $1.50 a therm in a 90% furnace. Cheaper electricity or a more efficient heat pump tips it the other way.
What is a therm?
A therm is 100,000 Btu. Gas bills list usage in therms or in hundreds of cubic feet (ccf); one ccf of natural gas is about 1.036 therms.
Why is electric resistance heat so expensive?
It turns each kWh into only 3,412 Btu of heat. At 17¢ a kWh that is about $50 per million Btu, two to three times the cost of gas or a heat pump.