Propane VS Electric Heat Calculator (Running Cost & Savings Comparison)

What is Less Expensive to Use…..Propane or Electric Heat?

What is the difference in running costs and savings between using propane compared to electric heat?

Both energy sources have been rising in cost. So, is propane cheaper than electricity as a fuel to heat your home?

Use the Pick HVAC Propane vs Electricity Comparison Calculator to determine which source provides a more affordable way to heat your home.

The propane vs electric heat calculator uses your location, price per gallon for propane, price per kilowatt hour, your furnace’s efficiency rating, and how many BTUs will be needed. This all-in-one cost comparison calculator is unique!

Propane vs Electric Heat Annual Running Cost Calculator

Comparing the annual operating cost of using propane versus electric heat is very easy to do using our Running Cost calculator.

Fill in the boxes, and get the answer you want – Is propane cheaper than electricity as a fuel to heat your home?

Follow the instructions below on how to properly fill out each box on the calculator to find out how much you will pay for propane or electricity, as well as how much money you will save.

Propane vs Electric Heat Annual Running Cost Calculator

Box 1: Propane & Electric Heat Size by BTUs

The first box that you will need to fill in on the calculator is how many BTUs is required to heat your home.

Use the information on your current furnace or the one you are thinking about purchasing to get the most accurate information. A load calculation is the most accurate way to know how many BTUs will be needed on winter’s coldest days. Any qualified HVAC technician should be able to do a Manual J or similar load calculation for you.

The size, or BTU capacity, of your furnace or heater should be available in the Manual or even on the tag on the unit.

Figuring electric heat BTUs can be a bit different. While larger, whole-house electric heaters are usually rated by BTU, smaller units are rated by watts or kW (1000 watts). You might have to do some math.

For electric furnaces/heating systems 1 kW/h = 3,412 BTUs.

Box 2: Propane Heat Efficiency Rating

This box is fast and easy to fill out. All you need to do is find out what the efficiency rating is on your propane furnace. It is usually located on a yellow sticker on your actual furnace. Or you can find it in the Manual or online by searching the furnace or heater model number.

Simply put in the percentage that is on your furnace or that you located in your owner’s manual. Type it in or use the side arrows to adjust up/down from the default setting.

Box 3: Your State

Another quick and easy box!

Put in the state that you are living in and this will determine the cost for both propane and electricity.

In addition to automatically figures the energy costs, the number of year heating hours will be figured due to what state you live in.

Box 4: Yearly Heating Hours

Once you put in your state, this box will automatically get filled in based on data from the US Department of Energy for Heating Degree Days using the average outdoor temperature for each state.

For example, Michigan has 2,618 heating hours per year and Florida has 603 heating hours per year – less than 25% of Michigan’s! But wait till AC season, and Michigan gets back at Florida : )

Box 5: Propane ($/Gallon)

This is another box that will automatically populate based on the US DOE and Energy Information Agency data.

The price for a gallon of propane is different from state to state. Michigan’s average price per gallon is $2.025 per gallon of propane, and Florida’s average price per gallon is $4.222.

If you want to be even more exact, use what you are paying from your propane company per gallon.

Box 6: Electric Rates ($/kWh)

Choose a state, and see the average electric rate.

The rates vary greatly from state to state. To put this into perspective, Michigan’s average rate per kWh is $0.178 and Florida’s average rate for electricity is $0.120 kWh.

Again, you can use the actual price from your electric bill for increased accuracy.


  • Total Yearly Savings

Depending on the price per gallon of propane and the cost per kWh, the calculator will determine whether using propane or electricity is cheaper for you – and by how much per year.

  • Annual Propane Running Cost

The calculator will estimate how much you will spend for the year using propane for your heating source.

  • Annual Electric Heat Running Cost

You will be able to see the estimated cost to use electricity for heat for the year.

  • 5-years to up to 15-years Savings

The comparison calculator will show how much money you can save (or lose by choosing the more expensive fuel) in the short-term and over time.

Warm Climate Example

We’ve been using Florida, where propane costs are high, so let’s stick with it to determine the annual heating cost for using propane and electric heat.

For this example, we will use a 48,000 BTU propane furnace that is 80% efficient.

  • Propane furnace annual running cost: $1670.30
  • Electric heat annual running cost: $1272.45
  • Total yearly savings by using electric over propane heat: $398
  • Savings over a 5 year time period: $1990
  • Savings over a 10-year time period: $3980

Cold Climate Example

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 90% efficient.  Below is how much cheaper propane is compared to electric heat.

  • Propane furnace annual running cost: $4869.46
  • Electric heat annual running cost: $11,472.55
  • Total yearly savings by using propane over electric heat: $6,603
  • Savings over a 5 year time period: $33,015
  • Savings over a 10-year time period: $66,030

There’s a good reason few homeowners in cold states use electric heaters for the main source of heat. Operating costs would be astronomical!

However, a good space heater can help reduce costs in cold climates when the homeowner lowers the temperature in the house by 4-6 degrees and keeps only one room warm using a space heater.

Written by

Rene has worked 10 years in the HVAC field and now is the Senior Comfort Specialist for PICKHVAC. He holds an HVAC associate degree and EPA & R-410A Certifications.

2 thoughts on “Propane VS Electric Heat Calculator (Running Cost & Savings Comparison)”

  1. Your FLA warm climate example is incorrect. It states “Total yearly savings by using propane over electric heat: $398” when it should state “…by using ELECTRIC over propane, as the the example costs show PROPANE as 1600+, but the ELECTRIC as only 1200+. People only reading the Total yearly savings statement (which many will do), rather than reading the entire example, will be misled into believing the opposite of what is actually true.


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