Last reviewed: September 2026 · By the HVAC Brief Editorial Team · Our sourcing and editorial standards
At 2025/26 heating season prices and federal minimum efficiencies, a gas furnace delivered heat for about $18.81 per million Btu, a heat pump for $23.70, propane and oil furnaces for about $34.89, and electric resistance heat for $52.10.
The most efficient system is not automatically the cheapest to run. Electric resistance heat is 100% efficient and still the most expensive, because the fuel price matters as much as the efficiency. Cordwood follows the same logic; our outdoor wood boiler guide works out the cord price at which wood beats oil or propane.
What a million Btu of heat cost, by system
Ranked from cheapest to most expensive, using the same season’s average fuel prices for every system and each system’s federal minimum efficiency.
| System | Cost per million Btu delivered | Index, 80% gas furnace = 100 | Efficiency basis |
|---|---|---|---|
| Geothermal heat pump, closed loop | $14.47 | 77 | COP 3.6, ENERGY STAR minimum at rated conditions |
| Gas furnace, 95% AFUE | $15.84 | 84 | Federal minimum from December 18, 2028 |
| Gas hot water boiler, 84% AFUE | $17.92 | 95 | Current federal minimum |
| Gas furnace, 80% AFUE | $18.81 | 100 | Current federal minimum |
| Air-source heat pump, HSPF2 7.5 | $23.70 | 126 | Current federal minimum, seasonal COP about 2.20 |
| Propane furnace, 95% AFUE | $29.38 | 156 | Federal minimum from December 18, 2028 |
| Oil hot water boiler, 86% AFUE | $33.68 | 179 | Current federal minimum |
| Propane furnace, 80% AFUE | $34.89 | 185 | Current federal minimum |
| Oil furnace, 83% AFUE | $34.89 | 185 | Current federal minimum |
| Electric resistance, furnace or baseboard | $52.10 | 277 | Converts electricity to heat one for one |
A million Btu is a unit of heat delivered into the house, so the table compares like with like regardless of fuel. It is not an annual bill, which depends on how much heat your house needs. For a yearly figure on one system, our estimate of the cost to run a heat pump prices heating and cooling together by state.
The fuel prices behind the numbers
Each price is the average across the October 2025 to March 2026 heating season, converted to a cost per million Btu of fuel using EIA heat content factors.
| Fuel | Season average price | Btu per unit | Cost per million Btu of fuel | Series |
|---|---|---|---|---|
| Natural gas | $15.59 per Mcf | 1,036,000 per Mcf | $15.05 | EIA monthly residential price, N3010US3 |
| Propane | $2.55 per gallon | 91,452 per gallon | $27.91 | EIA weekly residential propane price |
| Heating oil | $4.01 per gallon | 138,500 per gallon | $28.96 | EIA weekly residential heating oil price |
| Electricity | 17.77¢ per kWh | 3,412 per kWh | $52.10 | EIA Electric Power Monthly, Table 5.3 |
Delivered cost is the fuel cost divided by efficiency. An 80% furnace needs 1.25 million Btu of gas to put one million Btu into the house. A heat pump with a seasonal coefficient of performance of 2.20 needs only 0.45 million Btu of electricity. Heating oil prices by season are tracked in our heating oil price series.
Efficient is not the same as cheap
Efficiency tells you how much of the fuel becomes heat. Cost per unit of heat also depends on what that fuel costs, and electricity costs far more per Btu than gas.
- Electric resistance turns 100% of electricity into heat, but electricity cost $52.10 per million Btu against $15.05 for gas, so it is the most expensive heat in the table.
- A heat pump moves heat rather than making it. At the HSPF2 7.5 federal minimum it delivers about 2.2 units of heat per unit of electricity, which is why it undercuts resistance heat by more than half.
- Propane and oil furnaces land close together at these prices, roughly 1.9 times the cost of gas heat.
- The 2028 gas furnace standard raises the minimum to 95% AFUE, which cuts delivered cost by about 16% at the same gas price. See the 95% furnace rule.
When a heat pump beats gas
At federal minimum efficiencies and 2025/26 season gas prices, an air-source heat pump matches an 80% gas furnace when electricity costs about 14.1 cents per kWh, and a 95% furnace at about 11.9 cents. Fuel also decides how much heating a household needs in the first place. Our heating degree day index shows oil-heated homes faced 5,972 degree days last season against 2,970 for electrically heated ones.
Against propane or oil, the break-even is about 26.2 cents, well above the season’s average electricity price of 17.77 cents. Higher rated heat pumps move the line:
| Heat pump rating | Status | Seasonal COP | Cost per million Btu |
|---|---|---|---|
| HSPF2 7.5 | Federal minimum | 2.20 | $23.70 |
| HSPF2 8.5 | Higher rated | 2.49 | $20.91 |
| HSPF2 9.5 | Higher rated | 2.78 | $18.71 |
Local prices can swamp all of this. June 2026 residential electricity ranged from 13.11 cents in Nevada to 52.72 cents in Hawaii; see electricity prices by state. Gas prices vary by state too.
HSPF2 is a seasonal rating under a standard federal test climate. In colder places a heat pump’s real seasonal performance is lower, and backup resistance heat raises the cost. Duct losses, fixed monthly gas charges, and minimum delivery terms for propane and oil are also excluded. The geothermal figure uses a rated COP at test conditions, not a seasonal measurement.
Frequently asked questions
What is the cheapest way to heat a house?
At 2025/26 national average prices, gas heat was cheapest among common systems: $18.81 per million Btu from an 80% furnace and $15.84 from a 95% furnace. A minimum-efficiency heat pump delivered heat for $23.70, propane and oil for about $34.89, and electric resistance for $52.10. Local prices can change the order.
What is the most efficient heating system?
By energy delivered per unit consumed, heat pumps: a minimum-efficiency air-source heat pump delivers about 2.2 units of heat per unit of electricity, and ENERGY STAR closed loop geothermal units are rated at a COP of at least 3.6. Efficiency is not the same as running cost, which also depends on fuel price.
Is a heat pump cheaper to run than a gas furnace?
It depends on local prices. At federal minimum efficiencies and 2025/26 season gas prices, a heat pump matches an 80% gas furnace at about 14.1 cents per kWh. The season’s national average was 17.77 cents, so gas was cheaper on average, but a heat pump beat propane, oil and resistance heat.
Is propane or heating oil cheaper for heating?
They were nearly identical in 2025/26. Propane averaged $2.55 a gallon and heating oil $4.01, which at 80% and 83% efficiency gives about $34.89 and $34.89 per million Btu of delivered heat.
Methodology and limitations
Prices are simple averages of EIA observations from October 2025 through March 2026. Heat content factors are EIA’s. Efficiencies are federal minimums from 10 CFR 430.32 and the ENERGY STAR geothermal heat pump criteria. HSPF2 is converted to a seasonal COP by dividing by 3.412.
- National averages; state and utility prices differ, in some cases by several times.
- Minimum efficiencies, not the efficiency of any installed system.
- Excludes equipment cost, installation, fixed charges, delivery fees and distribution losses.
Sources
- US Energy Information Administration, natural gas residential prices, series N3010US3.
- US Energy Information Administration, Heating Oil and Propane Update, weekly residential prices.
- US Energy Information Administration, Electric Power Monthly, Table 5.3.
- US Energy Information Administration, British thermal units, heat content factors.
- Code of Federal Regulations, 10 CFR 430.32.
- ENERGY STAR, Geothermal Heat Pumps Key Product Criteria.
The HVAC Brief is an independent trade publication. We do not sell equipment, take manufacturer advertising, or accept payment for placement in our research. Corrections welcome.
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