
When it comes to heating your home, one of the most important considerations is cost. With both propane and electricity prices rising, many homeowners are left wondering, Is propane cheaper than electricity for heating? This article dives into the key differences in running costs and savings between propane and electric heat, helping you make an informed decision on the most affordable option for your home.
To help you compare, use the Pick HVAC Propane vs Electricity Comparison Calculator. This unique tool uses key factors such as your location, propane price per gallon, electricity price per kilowatt-hour (kWh), furnace efficiency rating, and your heating needs (measured in BTUs). With this all-in-one calculator, you’ll easily determine which fuel source is the most cost-effective for heating your home.
Propane vs Electric Heat Annual Running Cost Calculator
The Propane vs Electric Heat Annual Running Cost Calculator is an essential tool for homeowners trying to figure out their heating costs. By inputting just a few details, you can instantly see how much you’ll pay annually for propane or electricity, as well as how much you’ll save by choosing one over the other.
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.
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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.
Savings
- 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.
Cost Comparison: Propane vs Electric Heat
Let’s break down the key differences in heating costs using both propane and electric heat. While prices for both energy sources are on the rise, each offers distinct advantages depending on where you live and your heating system’s efficiency.
Cold Climate Example: Michigan
- Propane Furnace: 84,000 BTUs, 90% efficient
- Annual Running Cost:
- Propane: $4,836.48
- Electric: $11,472.55
- Savings Using Propane: $6,603 per year
- 5-Year Savings: $33,180
- 10-Year Savings: $66,360
In colder climates like Michigan, propane is significantly cheaper than electricity for heating. With higher heating hours and more extreme temperatures, using electric heat could lead to much higher operating costs.
Warm Climate Example: Florida
- Propane Furnace: 48,000 BTUs, 80% efficient
- Annual Running Cost:
- Propane: $1,853.44
- Electric: $1,272.45
- Savings Using Electric Heat: $580.99 per year
- 5-Year Savings: $2,904.95
- 10-Year Savings: $5,809.9
In warmer climates like Florida, electricity may be a more affordable option. However, the gap between propane and electric costs isn’t as wide as it is in colder areas.
Other Factors to Consider
While the Propane vs Electric Heat Calculator provides a straightforward comparison, there are other factors that can affect your choice of heating system.
1. Upfront Costs of Equipment
- Propane Furnaces: Typically, propane furnaces have a higher upfront cost compared to electric heat pumps or electric furnaces. However, the higher efficiency in colder climates often compensates for the initial investment in the long run.
- Electric Heaters: Electric heating systems tend to have a lower initial cost, but they might not be as efficient in colder climates. They could lead to higher running costs due to their higher energy consumption in extreme temperatures.
2. Environmental Impact
- Propane: Propane is a fossil fuel, which means it emits carbon dioxide (CO2) when burned. However, it burns cleaner than other fossil fuels like coal or oil.
- Electricity: The environmental impact of electricity depends on how it’s generated. If your electricity comes from renewable sources like wind or solar, it’s a greener option. If it comes from coal or natural gas, the environmental impact is higher.
3. Maintenance and Longevity
Electric Systems: Electric heating systems require less maintenance and have a longer lifespan, making them a good option for homes with lower heating demands.
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Propane Systems: Propane heating systems generally require more maintenance compared to electric systems, especially in areas with high humidity or extreme cold.
Long-Term Savings
While the initial investment in propane heating might be higher, the savings over time in colder climates can be significant. In warmer climates, electricity might be the more economical option. Over a span of 5, 10, or even 15 years, you can accumulate substantial savings depending on your heating needs, local energy prices, and the efficiency of your system.
Here’s an example of the savings:
- 5-Year Savings: $2,905 (Florida) to $33,180 (Michigan)
- 10-Year Savings: $5,810 (Florida) to $66,360 (Michigan)
- 15-Year Savings: $8,715 (Florida) to $99,720 (Michigan)
Conclusion
Choosing between propane and electric heat depends largely on your climate, energy prices, and heating needs. For colder climates, propane is usually the more cost-effective choice due to its efficiency. However, for milder climates, electricity may offer lower operating costs.
The Pick HVAC Propane vs Electricity Comparison Calculator can help you determine which option is right for you based on your specific circumstances, ensuring you make the most cost-effective decision for heating your home.
How to Get the Best HVAC Prices
- Firstly, keep in mind that installation quality is always the most important thing for residential HVAC project. So never sacrifice contractor quality for a lower price.
- Secondly, remember to look up the latest rebates as we talked above.
- Thirdly, ask for at least 3 bids before you make the decision. You can click here to get 3 free estimates from your local contractors, and this estimate already takes rebates and tax credit into consideration and filter unqualified contractors automatically.
Lastly, once you chose the right contractor, remember to use the tactics from this guide: Homeowners Tactics When Negotiating with HVAC Dealer to get the final best price.
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.
Thanks for the feedback. We just updated the result of calculator by adding a note to the total yearly savings.
Great information and a useful calculator. I’m in South Dakota and the info is very relevant for us. I’m looking into switching to propane heat asap.
This calculation appears to compare electric *resistance* heating to propane. In my experience, homes in FL (and the other parts of the southern US) very commonly use heat pumps for heating, not (just) electric resistance heating–although they commonly use heating strips as a “second stage” or “emergency heating” or when the heat pump goes into defrost mode. In general, heat pumps are more efficient than electric resistance heating, and this calculator does not appear have the capability to account for the COP of a heat pump.
Hi, Darren
You can try our heat pump calculator to calculate the heat pump running cost here https://www.pickhvac.com/hvac/furnace-vs-heat-pump-cost/