Best Way to Heat a Home Cheap
Heating methods for US homes ranked by cost per 1,000 BTU delivered, at current EIA fuel prices, with a modelled monthly bill for each.
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At US average fuel prices, the cheapest way to heat a home is a natural gas furnace at about $0.016 per 1,000 BTU delivered. An air-source heat pump is close behind at about $0.019 and is cheaper than gas in mild-winter states with moderate electricity prices. Propane costs about $0.035, and electric resistance heat is the most expensive at about $0.054 — roughly 3.5x the cost of gas.
Rank Heating Methods by Cost for Your Home
Cheapest Ways to Heat a Home — Ranked by Cost (US 2026)
| Rank | Heating Method | Cost per 1,000 BTU | Monthly (2,000 sq ft) | Per winter (5 mo) |
|---|---|---|---|---|
| 1 | Natural Gas (92% AFUE) | $0.016 per 1,000 BTU | ~$169 | ~$845 |
| 2 | Heat Pump (seasonal COP 2.8) | $0.019 per 1,000 BTU | ~$208 | ~$1,042 |
| 3 | Propane (80% eff) | $0.035 per 1,000 BTU | ~$376 | ~$1,881 |
| 4 | Electric Resistance (100%) | $0.054 per 1,000 BTU | ~$584 | ~$2,918 |
Modelled on a 2,000 sq ft average-insulated home over a winter month averaging 35°F outdoors, at 18.44¢/kWh (EIA Electric Power Monthly, May 2026), $1.44/therm (EIA winter average, Nov 2025–Mar 2026) and $2.55/gal (EIA heating-season average, Oct 2025–Mar 2026). Gas furnace 92% AFUE, propane furnace 80%, heat pump seasonal COP 2.8, electric resistance 100%. Your own bill depends on insulation, house size and local tariff.
The Cheapest Way to Heat Your Home
Where a gas line exists, a natural gas furnace is still the cheapest way to heat a US home at average prices — about $0.016 per 1,000 BTU delivered at 92% AFUE and $1.44/therm. An air-source heat pump is next at about $0.019 at a seasonal COP of 2.8: it moves heat rather than generating it, which is why it beats every other electric option by a wide margin.
Which of those two wins depends on where you live. Our state table shows a heat pump costing less than a gas furnace to run in 10 states — mild winters, moderate electricity prices — with another 4 close enough that a dual-fuel system that switches between the two makes sense. In cold states with cheap gas, the furnace wins comfortably. Off the gas network, propane costs about $0.035 per 1,000 BTU and electric resistance about $0.054, so a heat pump is usually the sensible choice in both cases.
Be careful with payback claims. Replacing electric resistance heat with a heat pump saves roughly $1,876 over a five-month winter for the 2,000 sq ft home modelled in the table above; replacing a modern gas furnace does not save anything at US average prices — the heat pump costs about 23% more per delivered BTU. And the federal credits that used to cover 30% of a heat pump installation (IRC §25C) and residential clean energy work (§25D) both terminated for property placed in service after 31 December 2025, so budget the full installed price. Use our heat pump calculator to see your exact savings, or compare all fuels with our gas vs electric comparison.