Running Costs: Heat Pump, Gas or Propane

How do you compare heating costs fairly?

Compare heating costs by putting every fuel on the same yardstick: dollars per million Btu of heat that actually reaches the house. Price alone misleads: a kWh, a therm and a gallon hold different amounts of heat, and each system wastes or multiplies it differently.

The formula is short. Divide your price per unit by the Btu in one unit times the system's efficiency, then multiply by 1,000,000:

Cost per million Btu delivered = price per unit ÷ (Btu per unit × efficiency) × 1,000,000

The Btu content comes from EIA's conversion table: 3,412 Btu per kWh, 100,000 Btu per therm, 1,036 Btu per cubic foot of natural gas and 91,452 Btu per gallon of propane. EIA notes the gas figure is a U.S. average estimate for 2026; your utility's bill may list its own heat content. One Mcf (1,000 cubic feet) works out to about 1,036,000 Btu, or roughly 10.36 therms, by this site's arithmetic.

For efficiency, use COP for a heat pump and AFUE for a furnace, written as a decimal. ENERGY STAR's furnace criteria define AFUE as the share of the heat in the incoming fuel that becomes space heat instead of being lost.

What do electricity, gas and propane cost here?

Among the states in the table below, Kentucky's average electricity price is second lowest and Ohio's is highest, in EIA's latest monthly data. These statewide averages fold in fixed charges; your own bill, divided by the units used, is the better input.

Electricity figures are from EIA's Electric Power Monthly table 5.6.A, August 2026, released October 23, 2026. Gas figures are EIA's 2025 annual residential averages for Kentucky and Ohio. EIA's summer monthly gas figures run far higher, since the fixed customer charge is divided by a small summer volume, so they make a poor heating input.

Propane prices come from EIA's weekly heating fuel survey, which runs only from October through March and reports prices excluding taxes. West Virginia and Tennessee were not in the rows read, so this site gives no propane price for them.

Compare heating costs by putting every fuel on the same yardstick: dollars per million Btu of heat that actually reaches the house.

How does efficiency change the math?

Efficiency is where a heat pump earns its keep. Electric resistance heat has a COP of 1.0, according to a DOE Building America report (2013), while ENERGY STAR says a heat pump can deliver up to three times the heat energy of the electricity it consumes. A furnace works the other way: at 95% AFUE, 5% of the fuel's heat is lost instead of reaching the rooms.

Here is the formula worked with the dated inputs above. The COP and AFUE values are examples chosen from sourced benchmarks, not measurements of any one system:

In Ohio, the same arithmetic at 19.38¢ gives $56.80 for strip heat, $32.46 at COP 1.75 and $18.93 at COP 3.0, against $13.78 for gas at $13.85/Mcf and 97% AFUE (ENERGY STAR's U.S. North level) and $30.44 for propane at $2.700 and 97%.

Read the table as a method, not a verdict. Your rates, house and equipment set the real answer, so plug in your own bill; a different rate or efficiency can change the ranking.

Why does the answer change with the weather?

A heat pump's COP is not one number; it falls as the outdoor air gets colder. The same DOE Building America report says standard units shed capacity more rapidly once it drops below about 30°F, and output and efficiency start to sag in the low to mid 30s. ENERGY STAR's cold-climate floor is a COP of 1.75 at 5°F, which is why that column sits in the table.

That makes the Ohio Valley's weather the swing factor. Louisville's 1991–2020 normals count 74.0 freezing nights (32°F or lower) in a typical year but only 0.5 at 0°F or lower, according to NOAA's annual normals file. Freezing nights are routine and sub-zero nights rare, so most of the season sits well above the 5°F test point behind ENERGY STAR's 1.75 floor. The cold weather page and the balance point and backup heat feature walk through where that line falls.

In a dual fuel system, the installer sets the outdoor temperature at which the furnace takes over, based on your equipment, house and local prices. There is no standard number; the dual fuel page explains how that choice is made.

A gas or propane furnace in the house brings a carbon monoxide duty. CPSC's Carbon Monoxide Information Center calls for battery-operated alarms or alarms with battery backup on every level and outside sleeping areas, interconnected if possible, plus a professional inspection of the heating system every year (per CPSC). If a CO alarm sounds, get everyone outside, then call 911 from outside. If you smell gas, leave first and get to where you can't smell it, then call 911 and your gas utility, or your propane supplier, from outside or a neighbor's house. Don't touch light switches or use matches or a phone until you are out, and don't operate valves or relight anything. If you're unsure, call a licensed technician.

What about electric resistance heat?

Electric resistance heat, from baseboards, an electric furnace or the strips in an air handler, is the most expensive way to heat with electricity at Kentucky's average rate, at $40.45 per million Btu in the table above.

That is why replacing it is the swap with the clearest math. A heat pump often cuts the electricity used for heating by about a third to a half compared with baseboard or an electric furnace; DOE's Energy Saver Guide (2022) puts it at about 50%, and PNNL's Building America Solution Center at 30% or more. Kentucky co-ops list some of their largest heat pump rebates for exactly this swap.

It also explains January bill spikes in heat pump homes. When strip heat runs as backup, those hours cost at the COP 1.0 rate, which the aux and emergency heat page covers in detail.

Loose ends

Smaller questions readers ask about this subject, answered briefly.

Which costs less to run in Kentucky, gas or a heat pump?

It depends on your rates and equipment. With EIA's average Kentucky prices, a heat pump running near COP 3 lands close to a 95% gas furnace per million Btu, while on the coldest days its cost per Btu rises; use your own bill to decide.

Where do I find my real electricity price?

Divide a winter bill's total, taxes and fees included, by the kWh used that month, which captures fixed charges as EIA's averages do.

How do I convert my gas bill?

If it bills in Mcf or hundreds of cubic feet, convert using about 1,036 Btu per cubic foot; if it bills in therms, use 100,000 Btu per therm.

Why not use this summer's gas price?

In July, the monthly customer charge gets divided across very few cubic feet, which inflates EIA's monthly average. The 2025 annual average or a winter month is a fairer heating input.

Does propane ever beat a heat pump?

At the October 2026 Kentucky price and the example efficiencies above, propane costs more per million Btu than a heat pump at COP 1.75 or better. Your own propane contract price may differ.

Do these numbers include cooling?

No. They cover heating only. A heat pump also cools in summer, so it replaces a central air conditioner's running costs as well.