Propane vs. Electric Heat
Is propane cheaper than electric heat? It depends on which electric heat, and that’s the part most comparisons gloss over. Against baseboard heaters, propane usually wins easily. Against a modern heat pump, it usually loses. Compare propane with electric baseboard, a heat pump, heating oil and natural gas below, using this week’s official prices and your own home.
Prices: EIA, updated automatically · By Nathan Brooks · Reviewed Oct. 15, 2026
Compare heating costs for your home
U.S. average: $2.60 (EIA, Oct. 5, 2026)
U.S. average: 18.3¢ (EIA, July 2026)
U.S. average: $6.04 (EIA, Oct. 5, 2026)
U.S. residential average in January 2026: about $1.35 a therm (EIA). Leave blank if you don’t have gas service.
| Heating option | Fuel a year | Cost a year |
|---|
Running costs only: equipment, installation and maintenance aren’t included. Heat pump efficiency drops in very cold weather, and many heat pumps use backup electric heat on the coldest days.
What heating costs at U.S. average prices
| Heating option | Yearly cost |
|---|---|
| Natural gas furnace, 95% | $1,019 |
| Heat pump (seasonal COP 2.5) | $1,546 |
| Cold-climate heat pump in a cold area (COP 2.0) | $1,932 |
| Propane furnace, 95% | $2,158 |
| Propane furnace, 80% | $2,563 |
| Heating oil boiler, 85% | $3,691 |
| Electric baseboard or furnace | $3,864 |
Example: 2,000 sq ft home, average insulation, cold climate (about 6,000 heating degree days), about 72 million BTU of heat a year. Prices: propane $2.60/gal and heating oil $6.04/gal (EIA, week of Oct. 5, 2026), electricity 18.3¢/kWh (EIA, July 2026), natural gas $1.35/therm (EIA, January 2026).
Propane vs. electric baseboard heat
Electric baseboard heaters and electric furnaces turn every kilowatt-hour into heat, but a kilowatt-hour holds only 3,412 BTU, while a gallon of propane holds 91,452 BTU. At 18.3¢ per kWh, the same heat as one gallon of propane burned in an 80% furnace costs about $3.93 in electricity, compared with $2.60 for the propane itself at this fall’s U.S. average. That’s why propane usually beats resistance heat unless your electricity is unusually cheap.
Propane vs. a heat pump
A heat pump moves heat instead of making it, so it delivers two to three units of heat for each unit of electricity it uses (its “coefficient of performance,” or COP). With a typical seasonal COP of 2.5 and electricity at 18.3¢, propane would have to cost about $1.86 a gallon or less to match it, even with a 95% furnace. This fall, only the cheapest Plains and Midwest states are below that line, such as North Dakota ($1.61), Iowa ($1.63) and Nebraska ($1.70) in the EIA’s Oct. 5 survey.
- Where propane still makes sense: very cold areas with older heat pumps, homes with high electricity rates, and homes that need a reliable backup during power outages.
- Hybrid (dual-fuel) systems use a heat pump most of the time and switch to a propane furnace on the coldest days. They can combine lower running costs with strong heat in a cold snap.
- Upfront cost matters. Replacing a working propane furnace with a heat pump costs thousands of dollars. Compare the yearly savings above with a real installation quote before you decide.
Propane vs. heating oil
Heating oil holds more energy per gallon (about 138,500 BTU) than propane, but it costs much more per gallon. At the EIA’s Oct. 5, 2026 averages ($6.04 for oil, $2.60 for propane), heating with oil costs roughly 50% more for the same heat, assuming similar furnace efficiency. Oil prices follow diesel prices, so the gap changes with the market.
Who should switch, and who shouldn’t
Here’s a simple way to think about it. If you heat with electric baseboard, propane or a heat pump will almost certainly lower your bill. If you already heat with propane and your furnace works, switching to a heat pump can save money on running costs, but the payback depends on the installation price and how cold your winters get. And if you heat with oil, the numbers this fall favor propane or a heat pump by a wide margin.
For many cold-climate homes, I think the most sensible middle ground is a dual-fuel system: a heat pump for most of the year and the propane furnace for the coldest days and power outages. Whatever you consider, get a real quote and plug your own prices into the calculator above. — Nathan Brooks
How we calculate
Heat needed = heated area × heat-loss factor (8, 6 or 4 BTU per sq ft per degree day) × heating degree days. Fuel use = heat needed ÷ (energy per unit × efficiency). Energy content: propane 91,452 BTU/gal, heating oil 138,500 BTU/gal, electricity 3,412 BTU/kWh, natural gas 100,000 BTU/therm. These are planning estimates, not an energy audit. For a propane-only estimate with tank fills and monthly budgets, use our propane heating cost calculator.
Quick answers
Is propane cheaper than electric heat?
It’s cheaper than electric baseboard or electric furnace heat at recent U.S. average prices, but usually more expensive than heating with a modern heat pump. Use the calculator with your local prices to check.
Is propane cheaper than a heat pump?
Usually not. At 18.3¢ per kWh and a typical heat pump, propane would need to cost under about $1.86 a gallon to match. In very cold areas with older heat pumps, propane can come out ahead.
How many kWh equal a gallon of propane?
One gallon of propane holds 91,452 BTU, the same as about 26.8 kWh of electricity. After furnace losses, an 80% propane furnace delivers about the same heat as 21.4 kWh of electric resistance heat.
Is propane cheaper than heating oil?
At March 2026 average prices, yes. Heating oil has more energy per gallon, but it cost about twice as much per gallon, so heating with oil cost more.
Keep saving
Sources
EIA weekly heating oil and propane prices · EIA electricity retail prices · EIA natural gas prices · EIA: British thermal units and heat content · U.S. DOE: heat pump systems
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