Energy Bill Lab

Heating Fuel & Heat Pump Breakeven Comparator

Benchmark delivered heating cost per Million BTU (MMBtu) across Natural Gas, Heat Pumps, Heating Oil, Propane, and Electric Resistance at local utility prices.

¢/kWh
$
/therm
$
/gal
$
/gal
Estimated Annual Heating Load (MMBtu)50 MMBtu (~2000 sq ft climate equivalent)
Thermal Balance AnalysisOutdoor Temperature Crossover Point: 25°F

Heat Pump vs. Natural Gas Economic Balance Point

Your thermal economic balance point occurs around 25°F. Above 25°F, a heat pump delivers lower operating cost; below 25°F, a natural gas furnace becomes more economical per hour.

Delivered Fuel Cost & Heating System Ranking

Comparing 1 Million BTU (MMBtu) of delivered thermal heat energy accounting for system efficiency (AFUE and COP).

RankHeating System & Fuel TypeCost per MMBtu DeliveredAnnual Cost (50 MMBtu)Annual Spread vs Lowest
#1
High-Efficiency Natural Gas Furnace
96% AFUE Condensing • Unit Rate: $1.45/therm
$15.10 / MMBtu$755/yrLowest Cost Winner
#2
Inverter Cold-Climate Heat Pump
COP 3.2 (SEER2 18 / HSPF2 10) • Unit Rate: 16.5¢/kWh
$15.11 / MMBtu$756/yrLowest Cost Winner
#3
Standard Natural Gas Furnace
80% AFUE Standard • Unit Rate: $1.45/therm
$18.13 / MMBtu$906/yr+$151/yr
#4
Standard Central Heat Pump
COP 2.5 (SEER2 14.3 / HSPF2 8.5) • Unit Rate: 16.5¢/kWh
$19.34 / MMBtu$967/yr+$212/yr
#5
Modern Heating Oil Furnace / Boiler
85% AFUE Flame Retention • Unit Rate: $3.85/gal
$32.70 / MMBtu$1,635/yr+$880/yr
#6
High-Efficiency Propane Furnace
95% AFUE Condensing • Unit Rate: $2.95/gal
$33.94 / MMBtu$1,697/yr+$942/yr
#7
Electric Baseboard / Strip Heating
COP 1.0 (100% Resistance) • Unit Rate: 16.5¢/kWh
$48.36 / MMBtu$2,418/yr+$1,663/yr

Thermodynamic Conversion Formulas

To normalize disparate energy units, Energy Bill Lab converts each raw fuel into Million British Thermal Units (MMBtu) delivered into the conditioned living space:

  • Natural Gas: 1 Therm = 100,000 BTU. Delivered Cost/MMBtu = (Price/Therm × 10) / AFUE
  • Electricity (Heat Pump): 1 kWh = 3,412.14 BTU (293.071 kWh per MMBtu at 100%). Delivered Cost/MMBtu = (Rate in $/kWh × 293.071) / COP
  • Propane: 1 Gallon = 91,500 BTU. Delivered Cost/MMBtu = (Price/Gallon × 10.929) / AFUE
  • Heating Oil #2: 1 Gallon = 138,500 BTU. Delivered Cost/MMBtu = (Price/Gallon × 7.22) / AFUE

Frequently Asked Questions

How do you compare heating costs across different fuels?

Heating systems use different units (therms for natural gas, kWh for electricity, gallons for propane and heating oil). To compare them objectively, we convert each fuel into delivered cost per Million BTU (MMBtu) of heat output, taking into account the annual fuel utilization efficiency (AFUE) of furnaces or the coefficient of performance (COP) of heat pumps.

What is the thermal balance economic crossover point?

The thermal balance crossover point is the outdoor winter temperature where the operating cost of a heat pump equals that of a natural gas furnace. Because heat pump efficiency (COP) decreases as outdoor temperatures drop, there is an exact outdoor temperature where switching to gas or dual-fuel auxiliary heating becomes more economical per hour.

Is a heat pump cheaper than natural gas heating?

In regions with moderate electricity rates (under 16¢/kWh) or high natural gas rates (over $1.50/therm), high-efficiency cold-climate heat pumps (COP 2.5–3.5) are often cheaper to operate than standard natural gas furnaces. In regions with very cheap natural gas (under $1.00/therm) and high electricity rates (over 25¢/kWh), natural gas typically has the lower operating cost.

How much more expensive is electric resistance heating than a heat pump?

Electric resistance baseboards and furnace heat strips operate at a COP of 1.0 (1 kWh = 3,412 BTU). Modern inverter heat pumps deliver a seasonal COP between 2.5 and 3.5, providing 2.5 to 3.5 times more heat per kilowatt-hour of electricity, cutting annual heating bills by 60% to 70%.