Heating Annual Cost Comparison: Heat Pump vs Furnace vs Heater

In most regions of the country, a heat pump is the most efficient way to heat your home. A heat pump doesn’t make heat, like a furnace does. It gathers heat outside and pumps it into your home using refrigerant.

However, heat pumps aren’t the ideal heating solution in very cold climates.

In order of efficiency, your options from most efficient to least efficient are:

  • Heat pump – standard split system or mini split ductless heat pump
  • Natural gas furnace
  • Propane furnace
  • Oil furnace
  • Gas fireplace
  • Electric furnace
  • Space heater

Heating Cost Calculator

There is a lot of information below the calculator, but if you want quick heating cost comparison numbers, input your data into the calculator.

Natural Gas Heat
Heat Pump
Fuel Oil Heat
Propane Heat
Electric Heat

It’s pretty self-explanatory, but here are brief instructions on using it.

Your State and Yearly Heating Hours

When you select your state from the menu, the Yearly Heating Hours will automatically appear. The numbers come from US Department of Energy data, so they are considered very accurate.

BTU Needed

How large is your furnace? Or how large is the furnace you have been recommended to have installed?

Enter the amount of heat the furnace creates. Our calculator works with furnaces up to 90,000 BTUs. If your home needs a larger furnace, talk to your HVAC installer about having two furnaces installed. The upfront cost will be higher, but if you have a large home, using two furnaces to heat zones like living areas and sleeping areas without heating all the house all day can significantly reduce your heating costs.

Heating Options – Natural Gas, Heat Pump, Fuel Oil, Propane, Electric

Our calculator allows you to compare heating costs for the most common heating types. Be sure to type in the efficiency levels for the most accurate comparisons.

Natural Gas Heat

Today’s gas furnaces come in two efficiency tiers. They are either 80% efficient or somewhere between 90% and 98% efficient. The efficiency makes a sizable difference. The efficiency can be found in the manual or located online by searching the furnace model.

Heat Pump

In moderate and warm climates, a heat pump is a really good option. Manufacturers make heat pumps from about 14 SEER to more than 22 SEER for cooling. Heating ranges from 8.0 to 13.0 HSPF, and that is very efficient. We don’t recommend heat pumps in cold climates. The manufacturers are pushing them as cold-climate heat pumps, but a gas furnace is still the better option.

Fuel Oil

The Northeast is where fuel oil is most popular. If you have other options, don’t choose fuel oil.

Propane

Rural areas that don’t have natural gas service heat with propane. It’s a little more expensive than natural gas, but it burns hot, creating a lot of heat for the amount of fuel burned.

Electric Heat

Avoid electric heat when you can. Electric furnaces are cheap – huge space heaters that push hot air through your ducts. But electric heat is very expensive – the most expensive way to heat. Consider an electric furnace if you live in a warm climate and only need heat on rare days during winter.

Heating Costs in the US

Heating costs around the United State vary greatly depending on the source/type of heat that is being used, the BTUs the heating system puts out, the efficiency of the heat system, and what type of climate your home is located in.

Homes that are located in colder climates will require heating systems that have a higher BTU rating compared to homes in warmer climates. The efficiency rating will determine how much heat actually comes from the BTUs via the heating system.

This comparison guide will compare the annual and long term cost for a number of different types of heating systems. Like all heating systems, every system has different positives and negatives. Read on to see what you would pay and use the comparison guide to help you make an informed decision on what type of heating system is best for your home.

Annual Running Costs Example Chart:

 Gas Furnace Heat PumpOil HeaterPropane HeaterElectric Heater
30,000 BTU658.9897.251790.981790.982690.17
60,000 BTU1317.791794.53581.953261.365256.3
80,000 BTU1757.062392.674775.944348.487008.5
90,000 BTU1976.692691.755372.934892.057884.3

* Yearly Heating Hours: 2166

* Natural Gas Heat Efficiency: 90%

* Heat Pump Efficiency (HSPF): 10

* Heat Pump Efficiency (HSPF): 75%

* Heat Pump Efficiency (HSPF): 80%

Heat Pump vs Gas Furnace Cost Calculator

Heat pumps and gas furnaces are two of the most common types of heating systems used throughout the United States.

Warm Climate Example: Arizona

Number of Heating Hours: 1809 hours

BTUs Used: 40,000 BTUs

A natural gas furnace that is 90% efficient will cost $941.40 a year to operate.

You will pay $919.51 annually to heat your home by using a heat pump in Arizona.

Cold Climate Example: Pennsylvania

Number of Heating Hours: 2307 hours

BTUs Used: 80000 BTUs

Using a natural gas furnace in Pennsylvania will cost a homeowner $2081.84 each year to heat their home.

By having a heat pump as a primary heat source, homeowners in Pennsylvania will pay $2585.35 annually for their heat.

Verdict

Comparing heat pumps and natural gas furnaces in Arizona and in Pennsylvania was a bit unexpected. It is actually more cost effective to use a heat pump in Arizona, rather than a natural gas furnace. Keep in mind that the annual savings is only around $21, but a heat pump is a very good option in warmer climates.

In colder climates, like Pennsylvania, a natural gas furnace is about $500 less expensive to operate than a heat pump.

Space Heater vs Central Heat Cost

A space heater is generally used in smaller spaces and runs on electricity. It also does not put out much heat, compared to many other options for heat.

Central heat is any heating system that is used to heat an entire home. It can be fueled by natural gas, propane, oil or electricity. Whatever fuel source you have for your central heat will make a huge difference on how much you spend annually on your heat costs.

The price to run an electric space heater is determined by the size and the number of watts it consumes. A 600-watt space heater costs around $60 per month to run and a 1500 watt or 1.5 kilo-watt space heater costs over $150 a month to run. Keep in mind, though, that these figures are based on running the space heater 24 hours a day, which is not recommended at all.

Warm Climate Example: Arizona

Number of Heating Hours: 1809 hours

BTUs Used: 40,000 BTUs

Central heat with propane - 80% efficient furnace will cost $1815.88 a year with propane costing $2.295/gallon.

Central heat with natural gas - 90% efficient furnace will cost 941.40 a year with a price of $1.301/therms.

Central heat with electricity - Using electricity to heat your home will cost $2693.28 a year when it costs $0.127/kWh.

Space heater - A space heater will cost between $90 and $225 a year to operate, but keep in mind that this heating source will not heat an entire home.

Cold Climate Example: Pennsylvania

Number of Heating Hours: 2307 hours

BTUs Used: 80000 BTUs

Central heat with propane - 80% efficient furnace will cost $5115.90 a year with propane costing $2.535/gallon.

Central heat with natural gas - 90% efficient furnace will cost $2081.84 a year with a price of $1.128/therms.

Central heat with electricity - Using electricity to heat your home will cost $7572.91 a year when it costs $0.14/kWh.

Space heater - A space heater will cost between $240 and $600 a year to operate. As stated above, a space heater will not keep your whole home warm.

Verdict

The verdict on this one is a bit skewed due to the fact that a space heater’s purpose is to simply heat a space, not an entire house. Also, this comparison had a number of different types of central heat that were included. Regardless of what you are heating, the best choice would be to use natural gas.

Gas vs Electric Furnace Cost Calculator

Natural gas is the most common fuel used in furnaces, due to the cost to heat homes and that it is a relatively clean fuel source. Electricity uses electricity to heat your entire home.

Warm Climate Example: Louisiana

Number of Heating Hours: 1044 hours

BTUs Used: 40,000 BTUs

Natural gas furnaces are very efficient and relatively cheap to run. A homeowner in Louisiana would pay 463.54 a year for heat by using a natural gas furnace. An electric furnace would cost $1395.22 per year.

Cold Climate Example: Montana

Number of Heating Hours: 2405 hours

BTUs Used: 80000 BTUs

Using a 90% efficient furnace a yearly heating cost for natural gas would cost a homeowner $1316.02. An electric furnace that would put out the same amount of BTUs is a lot more expensive, with a yearly cost of $6484.85

Verdict

Natural gas is much cheaper to use than an electric furnace, and it isn’t even close. You would pay around five times more by using an electric furnace in a colder climate, and clost to three times as much in a warmer climate.

Heat Pump vs Electric Heat Cost

Heat pumps use electricity for a power source to heat homes. Electric heat also uses electricity for heat. Between the two types of heating systems, heat pumps use the electricity much more efficiently than actual electric heat.

Warm Climate Example: South Carolina

Number of Heating Hours: 1374 hours

BTUs Used: 40,000 BTUs

When comparing the price to use a heat pump and electric heat, heat pumps are a lot cheaper to run. In South Carolina, you would pay $725.90 a year to heat your home. By using electric heat, it would cost $2126.18.

Cold Climate Example: Minnesota

Number of Heating Hours: 2509 hours

BTUs Used: 80000 BTUs

The price to use a heat pump in Minnesota would be an annual cost of $2831.81. Electric heat would be an astounding $8294.82 per year.

Verdict

A heat pump is between 3 and 4 times cheaper to use, compared to using electric heat to heat a home, regardless of where you live.

Cost of Running Gas Fireplace vs Furnace

Both gas fireplaces and gas furnaces are fueled by natural gas. However, heating your entire home with a gas fireplace is much less efficient than using a gas furnace.

There are factors in place that will determine how much the annual cost of heating your home is. First of all, the BTUs will need to be much higher in colder climates, compared to warmer climates. Secondly, the efficiency rating of the gas fireplace and gas furnace will factor in on the cost for each heating system.

A 38,000 BTU gas fireplace will cost around $.40 an hour to run. In comparison, to operate a natural gas furnace that is between 75,000 and 100,000 BTUs will cost a homeowner between $1.12 and 1.49 per hour. Keep in mind that the gas fireplace has less than half as many BTUs as a gas furnace.

Warm Climate Example: Florida

Number of Heating Hours: 1809 hours

BTUs Used: 40,000 BTUs

A natural gas furnace will cost a homeowner in Florida $505.31 a year for heat. A gas fireplace will not warm your entire home, but the yearly rate to operate one is around $723 per year.

Cold Climate Example: New Hampshire

Number of Heating Hours: 2438

BTUs Used: 80,000 BTUs

In New Hampshire, you would pay $2962.66 a year to heat your home with natural gas. A natural gas furnace costs $.40 per hour to run, so if you operated the gas fireplace for every heating hour, you would pay $975 per year to run your gas fireplace.

Verdict

This comparison is not like apples to apples...You are comparing an entire home’s heating system (natural gas) to a gas fireplace. The fireplace will not heat your entire home, whereas the gas furnace will heat your home.

Electric Furnace vs Gas Furnace Cost

Gas furnaces are fueled by natural gas and electric furnaces are powered by using electricity. The price to annually run each type of heating system is determined by the type of climate you live in and the efficiency of each furnace.

Warm Climate Example: New Mexico

Number of Heating Hours: 1686

BTUs Used: 40,000

By far, the natural gas furnace is a much cheaper option, compared to an electric furnace. In New Mexico, you would expect to pay $2767.10 annually to power an electric furnace. Natural gas would only cost $416.10. It is almost seven times more expensive to use electricity, rather than natural gas.

Cold Climate Example: Wisconsin

Number of Heating Hours: 2429

BTUs Used: 80,000

Wisconsin has almost 1,000 more heating hours a year than New Mexico. To use an electric furnace to heat your home you would need to pay $8372.06 a year for your heat. By using a natural gas furnace, you would only pay $1439.91 annually,

Verdict

A natural gas furnace is a lot cheaper than an electric furnace to use as a primary heat source in your home. Regardless of what type of climate you are living, natural gas will be much more cost effective. Colder climates will see a huge difference in savings when using natural gas, rather than an electric furnace.

Gas vs Electric Heater Cost

Mr. Heater Vent Free Blue Flame Natural Gas Heater MHVFB30NGT

Once again, we are comparing a natural gas furnace to another heating system. This time we are dealing with an electric heater. Electric heaters, such as an Edenpure, have been used often to supplement heat in areas of homes that may need an added boost in heat, such as a basement or an upstairs bedroom. An Edenpure heater uses around 1.5 kilowatts per hour, so it would take around $40 a month to operate.

Warm Climate Example: Texas

Number of Heating Hours: 1135

BTUs Used: 40,000 BTUs

A 40,000 BTU gas furnace that is 90% efficient will cost a homeowner in Texas $464.44 a year to heat their entire home. If you run an electric heater, such as an Edenpure, you will pay around $40 dollars a month to heat a much smaller area than an entire home.

Cold Climate Example: Maine

Number of Heating Hours: 2632

BTUs Used: 80000 BTUs

Using an 80,000 BTU, 90% efficient gas furnace in Maine will be much more costly. Homeowners will pay an average $3259.47 a year to heat their home. The electric heater cost will be the same, $40 a month, but you will need to operate that heater for about two to three times as often as in a warmer climate.

Verdict

An electric heater will not heat an entire house, but they only cost around $40 a month to operate. Natural gas is your best option for whole house heat.

Gas vs Fuel Oil Cost

Warm Climate Example: Florida

Number of Heating Hours: 603 hours

BTUs Used: 40,000 BTUs

Natural gas will cost a homeowner an estimated $505.31 per year to heat your home if you live in Florida. This is based on a 90% efficient furnace that puts out 40,000 BTUs.

To heat your home with fuel oil the estimated cost for the year to heat your home in Florida is $664.79 when using a furnace that is 75% efficient.

Cold Climate Example: Michigan

Number of Heating Hours: 2793 hours

BTUs Used: 84000 BTUs

Moving to a much colder area, Michigan, we will imagine that the home uses a propane furnace that is rated at 84,000 BTUs and is 80% efficient. It is estimated that a homeowner in Michigan will pay $1713.11 per year on heating their home with natural gas.

Heating the same home by using fuel oil, rather than natural gas, will cost $5582.70.

Verdict

Comparing fuel oil and natural gas for heating costs really depends on the climate that you are living in. The yearly difference in cost to heat a home in a warm climate with either fuel oil or natural gas is not very big. It is around $160 cheaper a year to use natural gas.

The more heat you need, the more the price difference between natural gas and fuel oil becomes. If you are using an 80% efficient natural gas furnace in Michigan, you will pay around $1713 a year on heating costs. If you use fuel oil and have a 75% efficiency furnace, you will pay $5582 a year.

Natural gas heat in a colder climate, like Michigan, will be almost $4,000 per year less when compared to fuel oil.

Propane vs Natural Gas Furnace Cost

Propane and gas furnaces are two of the most common types of heating systems used throughout the United States.

Warm Climate Example: Mississippi

Number of Heating Hours: 1362

BTUs Used: 40,000 BTUs

The cost to heat your home with propane in Mississippi is $566.05 per year. To use propane to heat your living space you would expect to pay $1550.67 annually. This is based on a natural gas furnace that is 90% efficient and a propane furnace with a rating of 80% efficient.

Cold Climate Example: Wisconsin

Number of Heating Hours: 2429 hours

BTUs Used: 80,000 BTUs

Using the same comparison of furnaces, with a natural gas furnace being 90% efficient and a propane furnace having an efficiency rating of 80%, you would pay $1439.91 a year to use a natural gas furnace. A propane furnace will cost a homeowner $3975.56 annually to supply heat to their home.

Verdict

Two of the most popular choices to keep your home warm are propane and natural gas. Propane is more readily available, but natural gas is much cheaper to use to heat your home. It is almost three times more expensive to use propane than natural gas for powering your furnace and keeping your home warm and comfortable.

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