Heat Pump vs Propane or Oil Heat
Enter your heated square footage and insulation, pick your state, and see a year of heat with a heat pump next to a year on propane or heating oil.
Heat pump vs propane or oil
B02Scenario A
Sets the electricity rate. Pick US average if you're not sure.
From EIA for US average. Use the rate on your bill if you know it.
Rate used: 18.4¢/kWh · US average · EIA reference 2025–26 · propane $2.60/gal · heating oil $3.70/gal · 4,500 heating degree-days · climate zone 4 (data as of 2026-09-26) ·
On the furnace label: 0.80 older, 0.90–0.98 condensing.
Heat pump costs less per year by
Heat pump: $1,456.04 a year · Propane furnace: $2,527.29 a year, for 75.6 MMBtu of heat.
- Yearly heating load
- 75.6 MMBtu
- Heat pump, $ per MMBtu
- $19.26
- Propane furnace, $ per MMBtu
- $33.43
- Heat pump, per year
- $1,456.04
- Propane furnace, per year
- $2,527.29
- Difference per year (Propane furnace − Heat pump)
- $1,071.25
- Seasonal heat pump COP used
- 2.8
- Prices used
- electricity 18.4¢/kWh · gas $1.55/therm · propane $2.60/gal · oil $3.70/gal
Cost by month, in season only
The yearly cost spread across the months using a typical heating degree-day pattern from NOAA 1991–2020 normals. Months outside the season show $0.
Estimate. Formula and sources are under “How it works”. Change any input; the result updates as you type.
2026 note: The federal 25C and 25D tax credits ended for installations after Dec 31, 2025. Our numbers use 2026 rules. State rebates, HEAR/HOMES programs and utility programs may still apply.
Formula
How it works
- Annual heating load (MMBtu) = square feet × insulation factor × heating degree-days × 24 ÷ 1,000,000 (insulation factor: good 0.25, average 0.35, poor 0.50 BTU/h·°F per sq ft)
- Propane, $ per MMBtu = price per gallon ÷ 0.0915 ÷ AFUE (91,500 BTU per gallon)
- Heating oil, $ per MMBtu = price per gallon ÷ 0.1385 ÷ AFUE (138,500 BTU per gallon)
- Heat pump, $ per MMBtu = price per kWh × 293.07 ÷ seasonal COP of your climate zone
- Cost per year = annual load × $ per MMBtu; difference = fuel cost − heat pump cost
Propane and heating oil are delivered fuels, and per unit of heat they are usually the most expensive way to heat a US home. That is why a heat pump comes out ahead in most states, including cold ones. The exception is a state where electricity is expensive and the climate pushes the heat pump's seasonal COP down; oil can then come close.
Sources: EIA Electric Power Monthly table 5.6.A (electricity); EIA Heating Oil and Propane Update (propane and heating oil, October–March average); NOAA CPC heating degree-day normals 1991–2020; ACCA Manual J (simplified envelope factors); NEEP cold-climate heat pump data (seasonal COP by zone).
Worked example
A worked example
A well-insulated 1,800 sq ft house in Georgia needs about 30.2 MMBtu of heat a year. At Georgia's reference price of $2.90 a gallon, an 85% propane furnace delivers heat at $37.29 per MMBtu. A heat pump at a seasonal COP of 3.1 and 14.5¢/kWh delivers it at $13.71. That's $1,127.56 a year on propane against $414.55 with the heat pump: an estimated $713.01 a year less with the heat pump.
Reference
By state, at the default inputs
Heat pump costs less per year by, with this page's default inputs and each state's reference prices (EIA reference 2025–26, data as of 2026-09-26).
| US average | $1,071.25 | 18.4¢/kWh |
|---|---|---|
| Alabama | $988.60 | 15.5¢/kWh |
| Alaska | $1,189.51 | 25.0¢/kWh |
| Arizona | $603.12 | 15.0¢/kWh |
| Arkansas | $1,136.44 | 13.0¢/kWh |
| California | $619.41 | 32.0¢/kWh |
| Colorado | $1,219.77 | 16.0¢/kWh |
| Connecticut | $1,083.28 | 30.0¢/kWh |
| Delaware | $1,804.49 | 17.0¢/kWh |
| District of Columbia | $1,590.58 | 19.0¢/kWh |
| Florida | $331.80 | 15.0¢/kWh |
| Georgia | $1,109.12 | 14.5¢/kWh |
| Hawaii | $0.00 | 42.0¢/kWh |
| Idaho | $1,510.76 | 12.0¢/kWh |
| Illinois | $736.55 | 17.0¢/kWh |
| Indiana | $934.68 | 15.5¢/kWh |
| Iowa | $1,113.07 | 13.5¢/kWh |
| Kansas | $953.44 | 14.5¢/kWh |
| Kentucky | $1,370.22 | 13.0¢/kWh |
| Louisiana | $762.84 | 12.5¢/kWh |
| Maine | $1,315.89 | 26.0¢/kWh |
| Maryland | $1,742.07 | 19.0¢/kWh |
| Massachusetts | $1,197.51 | 29.0¢/kWh |
| Michigan | $601.66 | 19.5¢/kWh |
| Minnesota | $801.55 | 15.5¢/kWh |
| Mississippi | $848.23 | 13.5¢/kWh |
| Missouri | $1,102.56 | 13.0¢/kWh |
| Montana | $1,660.72 | 13.0¢/kWh |
| Nebraska | $1,213.17 | 12.0¢/kWh |
| Nevada | $1,229.32 | 15.0¢/kWh |
| New Hampshire | $1,299.52 | 27.0¢/kWh |
| New Jersey | $1,629.78 | 22.0¢/kWh |
| New Mexico | $1,191.38 | 15.0¢/kWh |
| New York | $1,450.06 | 25.0¢/kWh |
| North Carolina | $1,420.24 | 14.5¢/kWh |
| North Dakota | $1,145.67 | 11.5¢/kWh |
| Ohio | $1,102.65 | 16.5¢/kWh |
| Oklahoma | $864.97 | 13.0¢/kWh |
| Oregon | $1,609.26 | 14.5¢/kWh |
| Pennsylvania | $1,709.47 | 18.5¢/kWh |
| Rhode Island | $1,176.86 | 29.0¢/kWh |
| South Carolina | $1,065.41 | 15.0¢/kWh |
| South Dakota | $977.64 | 13.0¢/kWh |
| Tennessee | $1,322.73 | 13.5¢/kWh |
| Texas | $631.10 | 15.5¢/kWh |
| Utah | $1,484.71 | 12.0¢/kWh |
| Vermont | $2,166.42 | 22.0¢/kWh |
| Virginia | $1,588.23 | 15.5¢/kWh |
| Washington | $1,890.25 | 12.0¢/kWh |
| West Virginia | $1,645.19 | 15.5¢/kWh |
| Wisconsin | $584.45 | 17.5¢/kWh |
| Wyoming | $1,696.23 | 12.5¢/kWh |
Questions
FAQ
How much does it cost to heat with propane per year?
At the US-average reference price of $2.60 a gallon, a 2,000 sq ft house with average insulation and an 85% furnace needs about 972 gallons and costs an estimated $2,527.29 a year. The same house on a heat pump costs $1,456.04.
Heat pump vs oil boiler in Maine?
It's close. For an 1,800 sq ft house with average insulation in Maine (zone 6, 26.0¢/kWh, oil $3.70), an 85% oil boiler costs an estimated $3,516.55 a year and a heat pump at seasonal COP 2.3 costs $3,706.98, so oil comes out about $190 a year cheaper at these reference prices. Against propane ($3.40 a gallon) the heat pump is ahead by $1,184.30. Put in your own prices: small changes in the oil price or your rate flip it.
Do I need a cold-climate heat pump?
In zones 5 and colder (for example Illinois, Minnesota, Maine), the calculator already assumes a seasonal COP of 2.5 or lower. Those numbers assume a heat pump that keeps heating on the coldest days. Ask for a model rated for your design temperature; the Heat Pump Size Calculator shows the design temperature for your state.
Why is propane so expensive per unit of heat?
A gallon of propane holds 91,500 BTU. At $2.60 a gallon in an 85% furnace, that's $33.43 per MMBtu, more than twice the $16.85 of natural gas at $1.55/therm in a 92% furnace.
Does the propane or oil price change during the winter?
Yes. EIA reports delivered propane and heating-oil prices weekly from October to March, and they move with the season. We use the winter average. If your supplier quoted a fixed price, type it in.
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