Heating fuels are sold in incompatible units, burned at different efficiencies, and priced differently by region and by season. One conversion makes them comparable.
The energy content
| Fuel | Unit | BTU per unit |
|---|---|---|
| Natural gas | therm | 100,000 |
| Natural gas | CCF | ≈ 103,000 |
| Propane | gallon | 91,500 |
| Heating oil | gallon | 138,500 |
| Electricity | kWh | 3,412 |
The conversion
$ per million BTU delivered
= (price per unit ÷ BTU per unit) × 1,000,000 ÷ efficiency
Efficiency is AFUE for a furnace, or COP for a heat pump. Electric resistance heat is 1.00.
Worked once for each fuel available locally, this produces four numbers that can be compared directly.
Why the ranking changes by place
Natural gas is usually the cheapest per BTU where it is available, and it is not available everywhere.
Propane carries substantially less energy per gallon than heating oil and is typically the most expensive of the fossil options per delivered BTU. It is also priced by delivery contract, which varies a great deal between suppliers.
Heating oil is regional, largely the Northeast, and its price is volatile.
Electric resistance is almost always the most expensive per BTU because it is fixed at 100% efficiency and electricity is an expensive way to buy energy.
A heat pump changes the electricity comparison entirely. At a seasonal COP of 2.5–3.5 it delivers two and a half to three and a half times the heat per kWh, which frequently makes it cheaper than propane and competitive with natural gas.
What the comparison misses
Equipment cost. A fuel switch usually means new equipment, sometimes new venting, sometimes an electrical upgrade.
Infrastructure. A gas connection where there is none, or a propane tank, is a capital cost.
Price volatility. Propane and heating oil are delivered commodities with seasonal and contract pricing. Natural gas and electricity are utility-regulated and change more slowly.
Standing charges. A gas connection carries a monthly fee whether or not much gas is used, which matters for a house that would otherwise be all-electric.
The dual fuel case
A heat pump with a gas or propane furnace as backup switches between them at a chosen outdoor temperature.
The correct switchover point is where the heat pump's declining efficiency makes it more expensive per delivered BTU than the furnace — which is exactly the calculation above, repeated at each outdoor temperature using the heat pump's COP at that temperature.
Because it depends on the ratio of two utility prices, it should be revisited when rates change rather than set once and forgotten.
Where propane houses have the most to gain
A propane furnace is usually the most expensive common heating arrangement to run, and a heat pump in the same house is frequently much cheaper per delivered BTU even in a cold climate.
Retaining the propane furnace as backup below the balance point gives most of the saving with none of the risk, and it uses equipment that is already installed.
Doing it for your own house
Take the actual price per unit from a recent bill, not a national average — regional variation is large, and delivered fuels vary by supplier.
Use the real efficiency of the equipment in the house, not the nameplate of a new one, if the question is whether to switch.
The result is a small table of four numbers, and it answers a question that generalised advice cannot.
Wood, pellets and the fuels that are not on the meter
Cordwood and pellets can be very cheap per delivered BTU where the fuel is local, and the comparison has to include the efficiency of the appliance, which for an open fireplace is close to zero and for a modern sealed stove is high.
They also carry a labour cost the other fuels do not, and they rarely heat a whole house evenly. Most households that use them treat them as a supplement to a central system rather than a replacement, which means the central system is still sized for the full load.
Rate structures change the answer
Electricity in particular is increasingly sold on time-of-use rates, and a heat pump running through a cold morning peak is being charged differently from one running at midday.
Where a utility offers a heat pump or electric heating tariff, the effective price per kWh can be materially different from the standard rate, and it is the tariff that would actually apply that belongs in the calculation.