How the cost is worked out
Every fuel is sold in its own unit: electricity by the kilowatt-hour, natural gas by the thousand cubic feet (or the therm), propane, heating oil and kerosene by the gallon. To compare them, the tool turns each price into the cost of one million Btu of heat that actually reaches your rooms:
price per unit ÷ (Btu per unit × efficiency) × 1,000,000 = cost per million Btu of heat delivered
Then it ranks the systems from cheapest to dearest. The monthly figure is that cost times the heat your home needs in a month.
Heat content of each fuel
All from the U.S. Energy Information Administration's Btu conversion factors, except kerosene:
- Electricity: 3,412 Btu per kWh.
- Natural gas: 1,036 Btu per cubic foot, so 1,036,000 per thousand cubic feet; a therm is 100,000 Btu.
- Heating oil: 138,500 Btu per gallon.
- Propane: 91,452 Btu per gallon.
- Kerosene: 5.670 million Btu per barrel in the EIA Monthly Energy Review, appendix A, table A1. A barrel is 42 gallons (same appendix), so 135,000 Btu per gallon.
Efficiency
Efficiency is the share of the fuel's heat that ends up in the house. A furnace's rating is its AFUE: an 80% furnace sends a fifth of the heat up the flue. Electric resistance heat, from baseboards, an electric furnace or a plug-in heater, is close to 100% because there is no flue. A heat pump does better than 100% because it moves heat from outdoors instead of making it: ENERGY STAR says an air-source heat pump "can deliver up to three times more heat energy to a home than the electrical energy it consumes" (ENERGY STAR).
A heat pump's rating is its HSPF2, the heat it delivers over a season in Btu for every watt-hour of electricity. A watt-hour of electricity is 3.412 Btu, so dividing the HSPF2 by 3.412 gives the seasonal COP, the number of units of heat per unit of electricity. HSPF2 7.5 is a COP of 2.20. That is a seasonal average. A heat pump's output falls in very cold weather, and many switch on electric backup strips, which are plain resistance heat. In a cold climate the real figure for the coldest months is lower than the average, so treat the heat pump line as a season-long figure, not a January one. ENERGY STAR's cold-climate label asks for a COP of at least 1.75 at 5°F (ENERGY STAR key product criteria).
What the tool assumes
- Propane furnaces get the same AFUE choices as gas furnaces. The EIA equipment review covers gas-fired furnaces; applying the same figures to propane furnaces is our assumption.
- Vent-free propane heaters and portable kerosene heaters are set at 100%. That is our assumption: an unvented heater has no flue, so all its heat stays in the room. They are room heaters for the spaces their makers rate them for, not a way to heat a whole house; read our guide to using an indoor kerosene heater safely.
- Prices are state averages. Your utility or your fuel dealer can sit well above or below them. Your own bills are the better numbers; type them in.
- Fixed charges are left out. The comparison is per unit of fuel. A gas or electric bill also has a monthly customer charge, and a propane tank may carry a rental fee.
Why natural gas uses an annual price
A gas bill carries fixed monthly charges. In summer, when a home burns little gas, those charges are spread over very few units, so the summer price per thousand cubic feet looks inflated. That is why this tool uses the EIA's annual average residential price by state rather than the latest month.
How much heat a home needs in a month
The EIA's Residential Energy Consumption Survey puts the average energy used for space heating at 34.4 million Btu a year per home that heats (RECS 2020, table CE3.1). Homes in very cold and cold climates averaged 54.0 million Btu, homes in hot-humid climates 11.5. We spread the national figure over a five-month heating season, November to March (our assumption): 34.4 ÷ 5 = 6.9, which the slider rounds to 7. A January in a cold state can need far more than an average month.
One caution: the survey counts the energy that went into the heating equipment, not the heat that came out. For a furnace home the heat delivered was somewhat less, for a heat pump home more. Your bills give a better figure. Take a winter month's use and multiply: therms × 0.1, or gallons of heating oil × 0.1385, or gallons of propane × 0.0915, then by your furnace's AFUE.
The space heater line
A 1,500 watt plug-in heater is electric resistance heat at your state's electricity rate, so per million Btu it costs the same as baseboard heat. Heating one room with it is cheap only if the central system is turned down for the rest of the house. Run it on top of a furnace that still heats every room and you pay for both. The cost to run calculator works out its cost by the hour.
Worked example
- Gas furnace at 95% AFUE, gas at $15.34 per thousand cubic feet: 15.34 ÷ (1,036,000 × 0.95) × 1,000,000 = $15.59 per million Btu.
- Electric resistance, electricity at 18.31 cents per kWh: 0.1831 ÷ (3,412 × 1.00) × 1,000,000 = $53.66 per million Btu.
- Heat pump at HSPF2 7.5: COP = 7.5 ÷ 3.412 = 2.198. 0.1831 ÷ (3,412 × 2.198) × 1,000,000 = $24.41 per million Btu.
For a month that needs 7 million Btu of heat, that is about $109 with the gas furnace, $171 with the heat pump and $376 with electric resistance. Prices: EIA, electricity July 2026, natural gas 2025 average.
The prices the tool uses
These are the prices for the state you picked, with the period each one covers. A price you typed replaces the EIA figure.
| Fuel | Price | Heat content | Period and source |
|---|
Heating systems and their efficiency
The defaults the tool starts from. Every one can be changed in the calculator.
| System | Default | Where the figure comes from |
|---|---|---|
| Electric resistance: baseboards, plug-in heaters, electric furnace | 100% | EIA: electric resistance furnaces are "considered near 100% efficient because there is no flue heat loss"; minimum AFUE 98.3% (EIA appendix B, Residential Electric Resistance Furnaces, page 25) |
| Air-source heat pump | HSPF2 7.5 (COP 2.20) | Federal minimum for split-system heat pumps made on or after 1 January 2023: 14.3 SEER2 and 7.5 HSPF2 (10 CFR 430.32(c)(5); background from AHRI) |
| Heat pump, ENERGY STAR cold climate | HSPF2 8.5 (COP 2.49) | ENERGY STAR cold climate requirement for non-ducted split systems, ≥ 8.5 HSPF2; ducted split systems ≥ 8.1 (ENERGY STAR key product criteria) |
| Natural gas furnace | 95% AFUE (or 80%) | Federal minimum for non-weatherized gas furnaces AFUE ≥ 80%; ENERGY STAR V. 4.1 for northern states AFUE ≥ 95%, the condensing level (EIA appendix B, Residential Gas-Fired Furnaces, pages 11 to 13) |
| Propane furnace | 95% AFUE (or 80%) | Our assumption: the gas furnace figures above. EIA appendix B covers gas-fired furnaces, not propane ones |
| Oil furnace | 85% AFUE (or 83%) | Federal standard AFUE ≥ 83%; ENERGY STAR V. 4.1 AFUE ≥ 85% (EIA appendix B, Residential Oil-Fired Furnaces, page 16) |
| Vent-free propane room heater | 100% | Our assumption: no flue, so all the heat stays in the room |
| Portable kerosene heater | 100% | Our assumption: no flue, so all the heat stays in the room |
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Guides that go with this tool
- 9 cheapest ways to heat your home in winterBuying guide
- Heat pump vs furnace: which is better for your home?Comparison
- 8 alternatives to baseboard heatersBuying guide
- Electric heaters vs oil-filled heatersComparison
- Propane furnace cost breakdownExplainer
- The real oil furnace replacement costHow-to
- How to safely use an indoor kerosene heaterHow-to
FAQ
Is a heat pump cheaper to run than a gas furnace?
It depends on your state's electricity and gas prices. At the US averages (electricity 18.31 cents per kWh in July 2026, natural gas $15.34 per thousand cubic feet in 2025, both EIA), a 95% gas furnace delivers a million Btu of heat for $15.59 and a heat pump at the federal minimum of HSPF2 7.5 for $24.41. Where electricity is cheap and gas is dear the order flips. Pick your state in the tool to see which way it goes for you.
Is it cheaper to heat one room with a space heater?
Only if you turn the central heating down for the rest of the house. A 1,500 watt space heater is electric resistance heat, the dearest way to make a million Btu in most states: $53.66 at the US average electricity price. It saves money when it lets you heat one room instead of the whole home, not because its heat is cheap.
Why does the tool use an annual average gas price?
A gas bill carries fixed monthly charges. In summer a home burns little gas, so those charges are spread over few units and the price per unit looks high. The annual residential average by state from the EIA smooths that out, so it is closer to what you pay per unit in the heating season.
Sources
- Electricity prices: EIA Electric Power Monthly, table 5.6.A, average residential price by state, July 2026.
- Natural gas prices: EIA natural gas prices, residential, annual, 2025 (a few states show the latest year they reported).
- Propane prices: EIA weekly heating oil and propane update, residential propane, week of Oct 12, 2026.
- Heating oil prices: EIA weekly heating oil and propane update, residential heating oil, week of Oct 12, 2026.
- Heat content of electricity, natural gas, heating oil and propane: EIA, British thermal units.
- Heat content of kerosene: EIA Monthly Energy Review, appendix A, table A1.
- Furnace and electric resistance efficiencies: EIA, Updated Buildings Sector Appliance and Equipment Costs and Efficiencies, appendix B.
- Heat pump minimum: 10 CFR 430.32(c)(5), and AHRI on the 2023 standards.
- Heat pump cold-climate level and low-temperature COP: ENERGY STAR key product criteria; "up to three times more heat energy": ENERGY STAR air-source heat pumps.
- Space heating energy per home: EIA RECS 2020, table CE3.1.
Prices last checked 20 October 2026. The calculator does not store anything you type.