Heating Cost Comparison Calculator: Gas, Propane, Oil, Electric and Heat Pump

How the calculation works

Every fuel is sold in a different unit. Gas comes in therms, propane and oil in gallons, and electricity in kWh. To compare them, the calculator finds the cost of one million BTU (British thermal units) of heat delivered into your home.

Cost per million BTU delivered =
    price per unit ÷ (BTU per unit × efficiency) × 1,000,000

Efficiency: furnace or boiler AFUE as a fraction (95% = 0.95)
            electric resistance = 1.0
            heat pump = seasonal COP (for example 2.5)

The energy content of each fuel comes from the EIA’s BTU conversion page: 100,000 BTU per therm, 91,452 BTU per gallon of propane, and 3,412 BTU per kWh. For heating oil the tool uses 137,381 BTU per gallon, within 1% of the 138,500 figure on that EIA page.

AFUE (annual fuel utilization efficiency) is the share of fuel energy that becomes heat in the home over a season. COP (coefficient of performance) is heat out divided by electricity in. A heat pump’s COP is above 1 because it moves heat from outdoors rather than making it. You can turn an HSPF2 rating into a seasonal COP by dividing by 3.412.

The default prices are dated U.S. averages from EIA: electricity 18.31¢ per kWh (residential, July 2026), natural gas about $1.35 per therm (residential, January 2026), and propane $2.638 and heating oil $6.138 per gallon (residential, week of October 12, 2026, before taxes).

Worked example

With the defaults, here is the cost of one million BTU of delivered heat:

At these prices, natural gas is the cheapest heat. A heat pump is second. Heating oil and electric resistance heat cost far more per unit of heat than gas.

A second example

Now picture a home where gas is pricey and electricity is cheap. Gas is $1.80 a therm, propane $3.20 and oil $4.50 a gallon. Electricity is $0.13 per kWh, and the heat pump’s COP is 3.0. Efficiencies stay at the defaults.

• Heat pump: $12.70 per million BTU
• Natural gas: $18.95
• Electric resistance: $38.10
• Propane: $36.83
• Heating oil: $38.54

Here the heat pump is the cheapest heat, well below gas. Same tool, different prices, opposite answer.

What your result means

The lowest bar is the cheapest heat per unit at the prices you entered. To turn that into dollars a year, multiply by how many million BTU of heat your home uses. Or use the heat pump savings calculator, which starts from your actual fuel use.

A small gap, say a few dollars per million BTU, may not justify new equipment on its own. A large gap, such as oil or electric baseboard against a heat pump, is often worth a closer look, especially when the old system is near the end of its life. Our heat pump cost and savings guide walks through what changes the numbers.

If you want to cut costs without changing fuel, insulation and air sealing reduce how many BTU you need at all. Our guide on how to lower your energy bill ranks no-cost, low-cost and bigger fixes.

Prices, climate and rules that change the answer

Prices move. Residential natural gas prices change through the year. EIA’s monthly U.S. averages for 2026 rose from $14.95 per thousand cubic feet in February to $26.45 in July. Propane and oil are reported weekly and can swing with the season. For heating decisions, use winter prices from your own bills.

Climate. A heat pump’s real seasonal COP falls in colder places. If you live where winter nights often drop well below freezing, try a COP of 2.0 or less and see if the ranking changes. Our guide to cold-climate heat pumps explains what to expect.

Utility rate plans. Some utilities offer lower electric rates for heat pump homes, or time-of-use rates. Gas customers pay a fixed monthly charge that does not go away until the gas account is closed.

Incentives. There is no federal tax credit for heating equipment installed in 2026; the 25C credit ended for property placed in service after December 31, 2025. State-run Home Energy Rebates, where they exist, no longer pay for switching from gas, oil or propane to electric under DOE Program Notice 26-2.

Common mistakes

• Typing propane price per pound or per 100 pounds instead of per gallon.
• Using only the “supply” or “generation” line on a bill and leaving out delivery charges.
• Using the HSPF2 number directly in the COP box instead of dividing by 3.412.
• Assuming an old furnace is 95% efficient; many older units are 80% or lower.
• Comparing summer gas prices, which can look high per unit, with winter oil prices.

Limits of this calculator

This tool compares fuel cost per unit of delivered heat. It does not include equipment cost, maintenance, fixed monthly charges, tank rentals, distribution losses in ducts or pipes, or how a heat pump’s efficiency changes on the coldest days. It does not tell you how much heat your home needs. Treat it as an educational estimate, not a quote or financial advice, and confirm big decisions with written quotes from at least three contractors.