Electric Vs. Propane Heating

Electric Vs. Propane Heating

Q. Due to space and teenagers! we are in the process of selling our present home and buying another. We are in the fortunate position of being able to choose what type of heat we want installed in the home. It is a large bi-level with 2 fireplaces, so we know we won’t have to rely solely on the furnace, but will have it installed with ductwork, etc. as part of the purchase agreement.  I am looking for information and cost analysis on electric versus propane (no natural gas in the country). I think the propane will be cheaper, but my husband has concerns. Any resources or suggestions?

I may not be the most versed in the area of heating differences but I can tell you our experience.  We bought our farm 8 years ago and it had electric heat.  It was always cold.   We ended up using 2 kerosene heaters most of the winter just to keep warm.  You could wear all the sweaters ect. you wanted but your nose and toes were always cold.   One February our electric bill was 350.00 – and we were cold the whole time. We saved our money and 5 years ago had propane installed.  The propane company sold us the furnace and then did all the labor for free.  I even had them run pipes to the stove and water heater so when they needed replaced I had a choice of what type to get.  Our house is now very warm, and My heating bills are less than half of what the electric was.  I had a large propane tank installed and  have it filled about late June or early July when prices are low.  If you wait until Aug. or Sept. the price starts rising and during winter it is much higher.  Watch oil prices and the propane (a by-product) prices will soon follow suit.  K.

I was an engineer for an electric utility for 20 years and know that propane or oil are the way to go. Personally, we have oil and If you can install the tank in ground or offsite you will not have to deal with the smell when they fill the tank. Ours is in the basement and the oilmen just don’t get it! they overfill every time!    >Unless the price of oil is at or above $1.00 per gallon, BTU to BTU it is the most economical (given the same furnace efficiencies). Propane and Natural gas are both good and safe sources provided you know the rules. The best thing to do is to read up on the safety rules of propane. It’s really quite simple and safe. If you will have a forced air system you will prefer the cleanliness of the propane as oil makes for much more cleaning. If you have the idea of going with a radiant heating system you may be more frugal to install an oil furnace. Just remember TANK PLACEMENT. Engineer

My feelings are that propane is comparable to heating with natural gas, and is FAR  (did you hear that…)FAR less expensive that electric.  Electric heat is THE most expensive way to heat a dwelling, unless you car producing the electricity, by say solar or wind generation. I live in rural New Mexico, and we have a 250 gallon propane tank, that cost me $190 to fill in fall, and I am on a top off schedule for February, which means they come in February no matter what and fill up whatever the tank can hold.  This last February isn’t a fair call because the winter was so mild, but in years past, this fill is generally not higher that $80 or so.  That’s for the whole year.  We do have a woodstove, and we do use it, but I wouldn’t think we’d spend more than another $100 in the year without it.  On the outside that would come to $370 – 400 in the event of a hard winter and no wood to burn.  That’s FOR THE YEAR!!!  You can expect a monthly electric billing somewhere near half that per month if you’re lucky heating with electric. A downside that is worth a mention, but has never been a problem for us so far  The electric company service is constant as long as they receive a check.  With propane you’re relying on a delivery to your remote location, and trucks do break down, supply can be interrupted, or weather can prevent delivery (typically when its the coldest).  None of these things have ever happened to us out here in the 7 years we’ve been here, but I am aware of this possibility.

Editor’s Note: With changing prices each person needs to evaluate their specific needs, to aid in this manner please consider the following formulations:

  • Multiply the oil heat price per gallon by 0.663 to give the equivalent price per gallon of propane
  • Multiply the natural gas delivered price per therm by 0.92 to give the equivalent price per gallon of propane
  • Multiply the electricity price per kWh by 27.0 to give the equivalent price per gallon of propane  

for more details on comparisons visit www.energykinetics.com/savingsHeatingFuelComparisons.shtml#comparePropane

53 thoughts on “Electric Vs. Propane Heating”

  1. i might be going with propane in the near future, I have always had natural gas…our local propane co told me $400.00 I almost collapsed…..my normal heating per mos is about $50.00….can someone tell me how this will work…do I pay per month with propane.?

    1. Typical for us is that the delivery truck comes about every other month or so in winter to top up twin 120 gallon tanks; maybe once or twice over the warmer season. Terms are full payment within 30 days of delivery.

    2. You are better off buying enough propane in the summer to last the entire year. Just be sure to buy your own tank and one large enough to store the propane you need. Then take what you paid and devide it by 12 to determine the amount of money you need to set aside for the following year.

  2. Sandy in North Florida

    Good Gosh! I just paid $280.00 for 82 gallons of propane to fill my 100/120 gallon tank, delivered to my home (about 3 miles from the service center). That came to about $3.25 a gallon. This seemed extremely high to me. I will go through this “tank full” of gas by the first of the year if this very “cool” weather continues. In addition, the blower eats away at my electric bill. Between the two, my heating bill will be awful. And I live in Jacksonville, Florida.

    1. I priced it in Tallahassee, fl. And it is about $1.00 per gallon more expensive here than in the towns just across the Georgia state line. That’s true for residential AND propane to refill the portable 20-100lb cylinders. I wonder why? It seems as if ALL of Florida’s propane prices are through the roof compared with the rest of the country.

    2. Derek in Palm Coast, FL

      Sandy, what do you use your propane for in your house? I am building a house in north/east FL and I am considering getting the same size of propane tank as yours, 120 gallons. Will use it mainly for stove cooking and for my dryer. Have to talk to the builder if they can install a gas water heater and a gas furnace. My friends who live nearby say that it costs a lot to heat up their house with electric. I was quoted $3 per gallon from local propane company.

  3. your prices make no sense for my part of the country Propane is $3.09 a gallon and when buying 100 gallons or more it comes to $2.39 –[lease tank] And Kw price after taxes and twelve other costs [like meter cost, federal cost adjustment] the power adds comes to 0.20 Kw. that means that per 91,600BTu’s used propane will be about $2.39 and electric will cost over $3.66. that is 65% more expensive to use electric for the same BTu’s.

    1. Look for a Buyer’s Coop. Our Fuel Club ,in NH,

      Is about 60 cents a gal. Less.

      Two yrs ago we saved $1600 + !!!

      Our old gas Co. Would have happily charged us $3.31

      Instead of the $1.50 to $1.80 we pd….?

  4. BILL BARRY: You pay $2.30 per gallon of Propane? Dang! In NE Florida I just bought 80 gallons at $3.75, i.e. $300 bucks… I use AA Propane of Middleburg… I’m gonna try to get a chart of Propane charges to get more data… The guy that pumped told me Propane hardly fluctuates during the year!
    That was 26 Dec 2014

    1. For some reason propane is over $1.00 per gallon higher in Florida than in Georgia. In fact, when I looked up propane prices by state, Florida is MUCH more expensive than any other state. I wonder why? A few cents, even 20 cents per gallon I could understand. But $1.00? What gives?

      1. right now propane is 1.38 per gl, you have to get over 200 gl delivered in order to avoid both delivery fees up here, but everything I read says to expect about 220
        +gl a propane a mo to heat a 1200 sq f home, I am in NE GA It gets cold here we have already had some 30’s temps at night, im deciding to switch over to electric as this unit in the house we bough is from 97 and the ac/heat guy said it is a 62% efficiency unit and said I would be lucky to only use 240g a mo, ttrying to keep the home at 68-70 degrees, cold hurts these old broken up bones) anyhow he even siad with anew higher effiecny propane unit to expect no less than 200g a mo I am currently in a 1700 sq ft home, and Ive never had a electric bill hit 300 (total electric home) and we never let tthe heat go under 68 degrees, yes sometimes we are a bit chilly for a little bit when thte temps are down in the 20’s or teens, bbu at a 1.30 gl at 300 gls a month even, the gas bill is higher than my total house elecvtric is now and htis house is much larger, getts no sun hardly at all either, im still thinking about keeping the gas for this winter, but itt seems to putt a 2.5 tton heatpump in now would partially pay for itself before tthe end of this winter. (the tank on the other house has under 20% left in a 320 water gl tank, everywhere says propane will go up and sometimes well over 2.00 a gl

        1. I live in Northern Michigan with a 2600 sq ft house and keep the house 66 ish all the time, and I don’t use 200 gallons a month. In fact, I use about 1000 gallons a YEAR (100/month average). And it is my only source of heat and hot water. I also have a direct vent propane fireplace I run a lot.

  5. I just bought a house in Hudson Florida (Pasco County) and I’m trying to decide whether I should install a propane tank for cooking, drying, water heating; can anyone give me some guidance? I estimate local electric around 8.5 cents per Kwh.

    1. I would go with Electric if you have low rates. When I bought my house 17 years ago LPG was .65 gallon, now its lower but still around $2.25 a gallon. LPG is a by product of gasoline so prices at the pump are real close. Propane isn’t as efficient as electric or natural gas. Cost more to install except you have to have to have larger service for your electric strips. In real cold climates if will cost you due to heat pumps won’t work, you are relying on your heat strips. Next time I update my units, I’m going heat pumps. Too bad I would like to install mini splits but they don’t look so hot, I do have one in my garage and it works flawless.

  6. I’ve been trying to figure out how propane is the less expensive option compared to electric. We filled our propane tank (which for our company means at 80% capacity). It cost approximately $800. Our average electric bill from Nov until now has been $275, which is about what it is in the hottest months of summer as well. How is that possible?

  7. i had been paying 2.35 gal for propane at truepoint and after they let us freeze one weekend single digets. I started shopping around and and found it as low as 1.65 gal. .For those of you in fla vs ga. it may be some kind of state tax.

  8. Bill, I did a similar analysis here in North Carolina at around the same time frame you did and came up with the SAME ANSWER. Current rates; electricity and propane were a wash; about the same cost per heating unit.

  9. Propane company’s are not regulated by the PSC and can charge what ever they want per gallon in Florida. They claim they are self regulated. We all know how well that works. If you must use propane buy your own tank that way you can shop around for the best price. In the tallahassee area it can vary as much as $1.00 to$2.50 a gallon from company to company. And what ever you do stay away from Surban propane they are hands down the bottom of the barrel. My house is less than two years old and I’ve already changed out one of the gas water heaters for electric and will change out the other appliances as time and money allows. In short stay away from unregulated utilities if at all possible.

  10. Last winter (2013-2104) when there was a shortage of propane prices exceeded $6.00 per gallon here in AZ, probably in other places as well. Luckily I had signed a pre-buy at 2.35 a gallon but my relatives, not knowing of the sharp increase paid more than $1200.00 to fill their 200 of their 250 gallon tank. Neighbors down the street switched to space heaters for a few months because they could not afford to buy propane. Believe it or not parts of AZ get snow and get below freezing almost every night in the winter. As we are getting ready to build a new house I am leaning toward not including propane due to the uncertainty of prices. On top of the steep prices of propane, the furnace also draws a significant amount of electricity which is a double whammy. We have switched primarily to firewood in a woodstove to overcome it almost completely. In our neighborhood, the hardest places to rent out if you are a landlord include a propane tank, even at 2.35/gallon a tenant must have >$500 on top of their deposit to even move in.

    1. The electric heat pump is efficient and clean.All rooms are the same temp.and the air is cleaned
      more per day in winter because this system uses
      freon to bring warmth into the house. A mid-priced
      electric pump does not have a flame thus this last
      2 to 3 times longer.

      1. had a new total electric house with a heat pump in western Missouri for 30 yrs. Had it double insulated when it was built. Had to supplement heat with a fireplace every winter I owned it. Also bought high end heat pumps every time I replaced one. Trane, Carrier, etc. They only lasted 10 to 12 years each. Was on a special electric rate, was not allowed to heat with propane or have a tank on the property, & they checked periodically. Bill was cheap enough, can’t complain about that, for 2800 square foot house bill was never over $200 but heat was cold. Plus every 10 years was out the cost of a new pump, & had to keep the fireplace filled 24 hours a day. Now I use propane in doublewide w 6″ outer walls & propane averages about $100 monthly year round.with propane prices at 2.34 gallon. I’ll take propane but it’s not clean as electric
        , new & old furnances leave a oily film.

  11. the electric heat pump uses same equipt. for cooling and heating. when i said mid-priced thats a reputable popular brand for great quality. this technology makes heat from cold outside air. this system is on longer but extremely efficiently and doing so creates cleaner and longer even room temperatures every day and night. no flame. realize you need a 200 amp fuse box or a dedicated small box for the unit. after all it is electric.

  12. As of late winter 2014-2015, kerosene in central NC averaged $4 a gallon regardless of if it was dyed or not. Propane was quoted in spring at $2.04 a gallon from a local propane supplier. However they have a minimum delivery of 151 gallons. If using their tank, they also require you not let it get below a certain amount (for whatever reason I didn’t take note of that amount) or they would charge you an extra fee. Payment due in full within 30 days of delivery. Duke Energy for whatever reason doesn’t like telling its customers what their electric rate is. As of last year it was if I remember right $0.14 a kWh. If you looked at the bill, it would seem there is no service fees. However I found out they DO have a HIDDEN service fee which they don’t tell you and will only tell you when you are escalated to their highest tech support people. I spent two days on the phone with their tech support trying to figure out why my bill was more than what they said it would be. It took a few hours to get them to tell me the electric rate. Then I did the calculations and found my bill showed I was being charged at almost $0.18 a kWh for one month and $0.16 kWh another. I asked them outright if there was a service fee and several of their tech people flat out said no there isn’t. Despite such they didn’t see any problem with my bill. After being escalated to a higher up, they finally admitted there is a service fee. When factoring in the service fee it matched. Of course nowhere on the bill is there any “service fee”. It looks by reading it that you used X amount of kWh and this is how much it costs. They are also constantly trying to raise the rate every chance they get. Crooks I tell you.

    Anyway, someone I know used electric heat exclusively last winter and their electric bill topped out at $550 a month for a couple of months. My heating cost using kerosene topped out at $400 a month during the coldest months (and that was NOT heating the whole house and keeping the inside temp around 55 degrees). This winter I’m seriously considering propane.

  13. “propane to electric”. This year after the heating season, I got a bill for $1500., after paying $200. a month all season. At the rate of $200. a month, my bill won’t be paid until January. I’m 77, that there will be no heat or hot water until the bill is paid. No heat or hot water for Oct., Nov or Dec. I tried to convert to heat pump but the propane co. won’t allow them to. What am I to do. Jane

  14. Anyone from New England out there? We live in MA and currently have electric heat which cost us almost $600/mo last year (12-mo average–much higher in winter based on $0.177 per kWh). We are looking into whether to convert to propane or oil as the gas company wants over $60,000 just to bring the natural gas lines up to our house. Regardless of the type of fuel we go with, we would also have the inside conversion cost for a furnace and ducts and would have to get a new water heater to get that off electric. Any advice?

  15. My furnace seems to be using an excessive amount of propane gas. From November 3, 2014, to February 27, 2015, we used 930 gallons of propane at a cost of $2,579.58. This comes out to roughly $645 per month. We kept the thermostat set on 65 degrees most of the time. Our house is approximately 1700 square feet. We have a gas range, water heater, and small wall heater that all run on propane. The range and water heater use an insignificant amount of propane. The problem is with the furnace. I live in Alabama where the temperatures don’t drop below 20 degrees very often in the coldest months. Does this sound like normal usage? We’ve almost finished paying off last winter’s bill just in time for this coming winter.

  16. Kathy You should look into your homes energy efficiency and weather you could benefit from added insulation and weatherproofing. I was also recently quoted $2300 for a Rinnai direct vent propane wall furnace installed plus the cost of a tank.

  17. Ok, so a few of you have missed three important pieces of the big picture here until LIAM spoke.

    First, the less heat loss you have from the home, the less heat of any kind you will need. So, ENERGY EFFICIENCY IS KEY: THis means your number one job is to make the job of the heater as small as is possible. This includes proper shading of certain sides of the home and no shade on others. This means a building shell which leaks the proper amount of air and no more. It means including passive solar features which collect winter heat for you

    Second the unfortunate nature of hot air heat is that it is inefficient and that it does not produce long wave radiation. long wave radiation like you get from a radiator heats objects which then give you a toasty warm feel to the home. a hot air furnace only heats the AIR in the home leaving you with a home which is dry and which has pockets of cooler air and which feels less toasty. You are neurologically wired in such a way that your PERCEPTION of how warm you are controls the thermostat much more than does the actual temperature on a thermostat. A home heated with radiant heat can often be heated to 3 degrees less than a home with warm air heat because we are surrounded with warm objects AND warm air. This means you will spend less to heat the same home with radiant than you will with hot air heat. Along this line, central AC systems are FAR LESS EFFICIENT than their mini split AC system counterparts. With these ideas in mind rwe often design homes without central forced air unit and instead deploy minisplits for AC and radiant floors or radiators for heating. As an enrgy rater I use a computer to energy model buildings and retrofit them with new systems with ultra high efficiency in mind.

    The source of heat under discussion here has been limited and I would like to expand it a bit. If Efficiency (not needing lots of heat) is the cheapest investment you can make then renewable energy is the second best choice you can make. A geothermal heat pump can pump heat from the ground into your home with a Coefficient of efficiency of 5 nowadays. that means for every kilowatt of energy you spend pumping, you get five kilowatts back in heat. That’s four free units of heat per one spent. Geo is renewable energy at its best. With the house needing as little as is possible and with geo in place we are often able then to deploy solar PV to make the electricity the Geo uses for heating and cooling AND to pay ALL of the bills in the home. The Geo and solar each earn you a 30% federal tax credit and many of our clients will do Geo one year, then exhaust all of their tax credit and will follow it up with Solar. With the geo installed you can install a desuperheater on the unit and make free hot water most of the year here (May to October). If you don’t go the desuperheater route we instead install a evacuated tube solar collector to make hot water and dump that water into a heat pump hot water heater. This takes a customary 4500 KwH per year hot water use and turns it into about 600 KwH per year. Often times we are able to design what is called a Net Zero home: one which makes all that it uses. in our house we make all we need AND we power an electric ford focus for about 8,000 miles a year! To find a competent person in your area you may want to find a RESNET energy rater at http://www.natresnet.com or you may wish to see http://www.bpi.org. For a gallery of ideas on what is possible you may wish to see our photoalbums at 111.facebook.com/hometowngreen . Best of luck as you do this! Sean

  18. here in northern pa our electric went from .5 to .10 doubling our electric bill my bill in January will be 900.00 anything else I use to heat with will be CHEAPER!! I went whole house electric then they threw our contracts in the garbage cans! a fried told me it was 800 to fill his big propane tank and it would last me all winter. I think I will give a try either that or rent in southern flordia for 900.00 a month the power company is paying me to move!

  19. I live in So Jersey. The weather has been brutal the last few winters. I rent a small 2 story townhouse. I don’t think it’s well insulated. It has baseboard electric. My first winter I closed the bedroom doors upstairs and just ran the living room heat. The electric bill was over $450. I was still cold . The place was only about 60. I was thinking about getting a small propane heater/fireplace . I am concerned about the costs of running that for heat though. In my area the propane is running close to $4. Does anyone have any input about running one of those small units? My landlord really likes me and I think I could get him to pay for the equipment. I am just trying to figure out if I would be better off financially running that unit vs the electric.

  20. the biggest thing that i see everyone with electric heat is missing and I’m just going to throw it out there is how much of your electric bill is really for heating here is what I mean I heat with propane but I still have $100 a month electric bill just running my tv, lights other electronics. so if your spending $150 a month for all your electrical devices and your total bill for the month is $350 your total heating cost is $200 a month not 350.

  21. Avoid Amerigas/Northern… In Central Oregon
    they have been and correctly are charging almost double what the other propane Co’s do. Currently the range is 1.95 to 3.75 per gallon for propane. If you own your own tank, please call all of the competitors and compare prices before you purchase. Tell your community. Also, compare installation and service quotes. You may not need what your told by one company i.e. extra tank vs more powerful regulators.

  22. If you own your own tank it’s imperative that you check competitions rates for Propane. In Central Oregon they vary from 1.95 to 3.75, currently. AmeriGas/Northern is the highest. Please tell (warn) your community.

  23. All gas appliances are tsteed and list by the American GasAssociation or another certified agency,Check the label on the appliance.Any change to this appliance would have to be certifiedby the company who made it.In your specifications booklet youshould find what kind of gas it is set-up to run.If you change the feed nozzle or limiting valves without the manufacturing companies written approval then you have voided the warrantyand possibly caused a fire hazard.Call the company who madethe appliance and find out if it can be legally converted.You do notwant to be responsible for a fire or CO poisoning.Good Luck

  24. I am going to switch my water heaters from propane to electric. No competition in propane companies where I live and I am paying over 5 dollars a gallon despite lower natural gas and oil prices.

  25. Working for a propane company, I can tell you all that many of you have made true statements on here, and have genuine questions/concerns. Propane is a market price, fluctuating daily, based on supply and demand- in each area. So, that is one reason places like Florida would be slightly higher. But the MAIN reason is that almost everyone has a small tank, because it is not for main heat, and they don’t use enough to get a “bulk” rate. You get charged by usage as well and if you only use >100 gal per year, we can’t give you the same price as the people who are filling a 500 gallon tank 2-3 times per year in the rural areas of the us, for heat, water, cooking, barns, crops, etc… or even businesses with tow motor bottles. many manufacturing companies use propane on forklifts- or for concrete places to heat the water, etc.
    you are ALWAYS welcome to call your provider and discuss pricing, we always negotiate with the people who call, and usually put them on a fixed contract. (pretty low)
    *Lastly, Natural gas and Propane are very similar, but you have to burn quite a bit more Natural gas to achieve the BTUs you get from propane. Propane is a hotter, slightly cleaner fuel, and you get 90,000 btu per 1 gallon. I believe NG is somewhere around 27 or 37,000 btu but it is metered so it is measured by cubic inches or something. I know the orifices are about twice as big, and cannot be used for propane, conversion. However, you can convert propane to natural gas fairly easily by enlarging the orifice. (a conversion kit is always recommended.) I am just making an example of how mch more Nat. Gas flows through at once to make the same amt. of heat.

  26. If you’re comparing costs, you also need to look at summer vs winter rates for electricity. Here in Atlanta, GA, my power company has a winter base rate that is around 12 cents per kilowatt/hr which covers the average home’s basic electric needs without heat. The price then drops to around 6 cents per kilowatt/hr for usage above that. So for electric heating the price should be calculated at the 6 cent rate.

    For me it has really paid off to convert my NG heated home to electric heat pumps. I installed mini split units in my 2300 sq ft two story home which eliminate duct losses and allow me to “zone” heat or cool specific areas as needed. I also installed a heat pump hot water heater. The main benefit of this is I no longer have to pay a minimum base fee to my NG provider all year long for using two therms of NG in the summer for just feeding the hot water heater. Not only is the heat pump the cheapest way to heat water aside from solar, it also cools and dehumidifies my basement. Typically, my highest month electric bill in the winter is about $150. (If you use any type of gas you need to add your electric bill to your gas bill for a fair comparison)

    One great tip I can give you to reduce heating costs is to apply bubble wrap to the inside of your home’s windows. Just spritz on some water and the bubble wrap clings to the window, I use the large bubble style and apply it with the bubble toward the glass pane and the “smooth” side facing inward. This greatly enhances the efficiency of the window and it’s cheap and easy to apply and remove. Second is to seal your electrical outlets to prevent cold air intrusion.

  27. Anecdotal evidence is useless evidence.
    What is the r value of attic insulation?
    What is the r-value of wall insulation?
    How many windows? How many doors? How many penetrations through the vapor barrier?
    What is the ambient temperature? Average?

    Every single one of these questions must be answered to form any kind of comparison to your anecdotal account. the only way it could be even remotely valid is of you installed two systems, one electric and one propane, ran them both for a year (with the same weather in each year) and then compared the difference.

    And then after that find out how the units you installed compare to other units of the same type for efficiency.

    Other than that, you have to have each produce heat in a laboratory environment with controlled conditions and find how much heat energy is produced by each given a specific energy input to find the efficiency of each.

    then you can compare that to the fuel costs specific to your region and take a guess at how the fuel costs will change over time.

    Besides that, yeah, your article is useless.

    Get this, an engineer using his “feelings” to decide a matter of mathematics/physics.
    Too funny!

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