Which heating fuel is cheapest?

At the default prices, a heat pump at COP 3.0 costs $677.23 a season for the model house, just under natural gas at $688.12. Resistance electricity is dearest at $2,031.70, then oil at $1,593.34, then propane at $1,448.38.

What COP does a heat pump need to beat gas?

COP 2.95 at 17 cents per kilowatt-hour and $1.35 per therm. Above that the pump wins on running cost; below it, gas wins. Cold weather pushes real COP down, so the season average matters, not the brochure figure.

Why is my electric heating bill higher than the EIA average?

The EIA electricity average of $1,196 blends heat pumps with resistance heat. A pure resistance home at the model defaults costs $2,031.70, far above the blended average.

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The heating ledger · Table No. 37

Home Heating Cost by Fuel

One house, five bills: gas, heat pump, resistance, oil, and propane, with the per-unit heat math that explains the ranking.

Filed October 25, 2026 · figures checked against 2026 sources

One house, five bills

Fuel comparisons usually fail because they compare different houses. A gas bill from a Minnesota farmhouse gets set against an electric bill from a Florida condo, and the conclusion tells you nothing. The honest comparison holds the house fixed and changes only the fuel. Take the calculator's default house, 1,800 square feet, moderate climate, average insulation, thermostat at 68 degrees with an 8 degree setback for 8 hours, and price it five ways at the default fuel prices.

Natural gas at $1.35 per therm: $688.12 for the season, $137.62 a month. A heat pump at COP 3.0 and 17 cents per kilowatt-hour: $677.23 for the season, $135.45 a month. Electric resistance at 17 cents per kilowatt-hour: $2,031.70 for the season, $406.34 a month. Heating oil at $4.60 per gallon: $1,593.34 for the season, $318.67 a month. Propane at $2.60 per gallon: $1,448.38 for the season, $289.68 a month. The spread from cheapest to dearest is $1,354.47, and it is entirely a fuel and equipment story, because the house never changed.

The cost per unit of heat explains the ranking

Strip out the house and price the heat itself. One million BTU of delivered heat costs $16.88 on natural gas at $1.35 per therm and 80% furnace efficiency: 12.5 therms of input per million BTU delivered. The same million BTU on resistance electricity costs $49.82 at 17 cents per kilowatt-hour, because a kilowatt-hour carries only 3,412 BTU and resistance converts at one to one. On a heat pump at COP 3.0, that million BTU costs $16.61, because the pump moves three units of heat for each unit of electricity it consumes. Gas and heat pumps land within 27 cents of each other per million BTU at these prices, and resistance heat costs roughly three times either one.

That per-unit math gives the break-even rule for the heat pump question. Divide the resistance cost per million BTU, $49.82, by the gas cost, $16.88, and you get COP 2.95. A heat pump running above COP 2.95 beats gas on running cost at these prices; below it, gas wins. Most modern heat pumps run well above 3.0 in mild weather and fall toward 2.0 or below in deep cold, which is why the season average, not the brochure COP, decides the comparison. The calculator uses COP 3.0 as its season assumption, and the article on heat pumps versus furnaces works through what happens when that assumption breaks in a cold snap.

Oil and propane: the rural penalty, priced

Heating oil at $1,593.34 costs $905.22 more than gas for the same house, and propane at $1,448.38 costs $760.26 more. Those gaps are not a mystery of equipment: oil and propane furnaces run at similar efficiencies to gas, but the fuels themselves cost more per unit of heat, and their households are concentrated where gas mains do not reach, which removes the cheapest option from the table. The EIA winter averages tell the same story from the other side: propane homes average $1,246 for the winter, and the model home at $1,448.38 sits about 16% above that average, because the model home is a middling 1,800 square feet in a moderate climate rather than the blended national average.

For oil households this winter, the comparison carries an extra sting. The EIA expects oil spending to rise 21% while gas spending falls 9%, so the oil-to-gas gap that was already about $900 on the model house widens further this season. An oil household that can switch to a heat pump, or even to a dual-fuel setup that runs the pump in mild weather and the oil burner in deep cold, attacks the most expensive line on its winter bill first. The savings article ranks those moves in dollars.

Why the model differs from the EIA averages

Readers will notice the model numbers do not match the EIA averages exactly. Gas matches closely: $688.12 against $640, about 7.5% above. Propane runs about 16% above its $1,246 average. Resistance electricity runs far above the $1,196 electricity average, at $2,031.70, and that gap is informative rather than embarrassing: the EIA electricity average blends heat pumps and resistance heat, while the model row is resistance alone. A household on pure resistance heat genuinely pays far more than the electricity average, and the average hides that fact. When a fuel average blends two very different technologies, the average describes neither household well.

The boxed insight. At 17 cents per kilowatt-hour and $1.35 per therm, a heat pump breaks even with gas at COP 2.95, and the default house prices at $677.23 on a COP 3.0 pump against $688.12 on gas. The heat pump wins the season by $10.89, and wins against resistance heat by $1,354.47. The fuel decision is really an equipment-efficiency decision wearing a fuel label.

What changes the ranking

Three prices move the ranking. First, the electricity price: at 25 cents per kilowatt-hour, the heat pump season rises to about $995.93 and gas wins comfortably. Second, the gas price: at $1.00 per therm, the gas season falls to about $509.72 and nothing electric touches it. Third, the cold: as outdoor temperatures fall, heat-pump COP falls with them, and the season average COP, not the mild-weather COP, is what the bill reflects. The ranking above is true at the stated prices and the stated COP assumption, and the calculator exists so you can rerun it at your prices instead of trusting a ranking built on someone else's utility bill.

The practical takeaway is ordered, not vague. If you heat with resistance electricity, almost any change beats the status quo: a heat pump saves $1,354.47 a season on this house, and even switching to propane saves $583.32. If you heat with gas, the fuel switch case is thin at current prices, and your money goes further on insulation and thermostat discipline. If you heat with oil or propane, the gap to gas is real but unreachable without a gas main, which makes the heat pump the realistic escape, and the cold-climate performance question the one to answer before signing a quote.

Fuel cost questions

Which heating fuel is cheapest?: At the default prices, a heat pump at COP 3.0 costs $677.23 a season for the model house, just under natural gas at $688.12. Resistance electricity is dearest at $2,031.70, then oil at $1,593.34, then propane at $1,448.38.
What COP does a heat pump need to beat gas?: COP 2.95 at 17 cents per kilowatt-hour and $1.35 per therm. Above that the pump wins on running cost; below it, gas wins. Cold weather pushes real COP down, so the season average matters, not the brochure figure.
Why is my electric heating bill higher than the EIA average?: The EIA electricity average of $1,196 blends heat pumps with resistance heat. A pure resistance home at the model defaults costs $2,031.70, far above the blended average.