What is the cheapest way to heat a home?
What is the cheapest way to heat a home?
$30 – $60 monthly cost to run a natural gas furnace
$40 – $160 monthly cost to run a heat pump
Cheapest way to heat a home
The cheapest way to heat a home is with a natural gas furnace, which typically costs $30 to $60 per month to operate. If natural gas is not available, the next cheapest way to heat a house is with an electric heat pump, with monthly running costs between $40 to $160.
| Heat source | Monthly running cost | Yearly running cost* |
|---|---|---|
| Natural gas furnace | $30 – $60 | $120 – $360 |
| Heat pump | $40 – $160 | $160 – $960 |
| Mini-split heat pump | $30 – $150 | $120 – $900 |
| Oil furnace | $80 – $145 | $320 – $870 |
| Propane furnace | $90 – $200 | $360 – $1,200 |
| Electric furnace | $130 – $180 | $520 – $1,100 |
| Radiant floors | $65 – $250 | $140 – $1,500 |
| Baseboard heater | $480 – $900 | $1,900 – $5,400 |
| Portable heater | $50 – $80 | $200 – $480 |
*For an average 4- to 6-month winter season.
Natural gas furnace heating cost
Natural gas is likely the cheapest way to heat your home, provided you have natural gas in your area. A natural gas furnace costs $30 to $60 per month to run, which makes it 30% to 85% cheaper to run than an oil, electric, or propane furnace.
Also, natural gas furnaces are among the cheapest heating units to install, at $2,000 to $5,200 total for a standard-efficiency unit or $3,300 to $6,900 total for a high-efficiency unit. The following table details the pros and cons of heating with natural gas.
| Pros | Cons |
|---|---|
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Heat pump running cost
Running a heat pump costs an average of $40 to $160 per month, making it the cheapest option for areas that don’t have access to natural gas. Depending on your regional utility rates, an electric heat pump costs $0.20 to $0.50 per hour to run.
Homeowners use heat pumps for both heating and cooling, providing year-round comfort. They are popular in moderate climates and regions with milder winters.
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Other heat pump options include:
A ductless mini-split heat pump costs $30 to $150 per month in running costs for both cooling and heating. The built-in zoning capability allows precise temperature control in different rooms, leading to energy savings.
A geothermal heat pump costs $100 to $200 per month to run. These heat pumps are less common because of the $15,000 to $35,000 installation price.
Oil furnace heating cost
An oil furnace costs $80 to $145 in monthly running expenses. Oil furnaces were common in the past, but their popularity has decreased in recent years due to the rising use of natural gas and electric heat. However, some regions still use oil furnaces in areas with limited natural gas availability.
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Propane furnace heating cost
Propane furnaces cost $90 to $200 per month to run. Propane furnaces offer heating for rural or off-grid locations. However, their popularity can vary regionally based on factors such as fuel availability, cost, and local building practices.
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Electric furnace heating cost
The monthly running costs for an electric furnace are $130 to $180 on average. Homeowners use electric furnaces for heating in regions where electricity is cost-effective or as a primary or supplemental heat source in moderate climates.
In locations without access to natural gas or other fuels, electric furnaces can be a practical choice, especially when paired with alternative energy sources like solar power.
| Pros | Cons |
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Radiant floor heating cost
Radiant floor heating costs $65 to $250 per month in running costs for a whole home, depending on the system type, size, and usage. Hydronic systems (hot-water coils) are cheaper to run for whole-house heating, while electric systems are ideal for single rooms or supplemental warmth.
| Pros | Cons |
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Radiant flooring for a whole-house system costs $10,000 to $34,000, making it one of the most expensive types of heaters to install.
Baseboard heating cost
A baseboard heater costs $480 to $900 per month in running costs for electric baseboard heat. These heaters work by using electric resistance coils to generate heat along the baseboards of a room. Electric baseboard heaters provide localized heating, allowing for individual room temperature control, and are relatively easy to install.
While they may not be the most energy-efficient heating choice, electric baseboard heaters are known for their reliability and ability to deliver consistent warmth in specific areas of the home.
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Portable space heater running cost
A portable space heater costs $0.20 to $0.25 per hour to run, depending on the wattage. On average, a space heater uses 1,500 watts of electricity and costs $50 to $80 per month to run for 8 hours each day.
Keep in mind that while this seems more affordable than some of the other heaters we’ve discussed, a space heater is only heating a single space, not the entire home. Also, electric space heaters are not the safest option for home heating, accounting for more than 40% of home heating fires.
Cheapest way to heat a mobile home
The cheapest way to heat a mobile home is with a natural gas furnace. A natural gas furnace for a mobile home costs $400 to $700 in annual energy costs. While these units are more expensive to install than an electric unit, they will make up the cost difference quickly in energy savings.
How to save on heating bills
When considering the most efficient way to heat your home, factors like your budget, the size of your home, and your current heating system all affect your monthly heating costs. Here are some tips to help you cut down on heating costs in any home:
Temperature control: Lower the thermostat by up to 10 degrees to save up to 10% annually on heating costs. A smart or programmable thermostat costs $160 to $450 with installation and can pay for itself in less than 2 years of energy savings.
Insulation and sealing: Install proper insulation in attics, walls, and floors, along with sealing air leaks to significantly decrease heating costs.
Passive solar heating: Maximize sunlight exposure to help warm your home naturally.
Maintain your heating system: Regularly change furnace filters and inspect ducts for leaks. The cost of an annual HVAC inspection is worth it to ensure your heating system is operating efficiently.
Home heating cost FAQs
Is it cheaper to heat with propane or natural gas?
In most areas, it is cheaper to heat with natural gas than propane. The actual cost difference can vary depending on your specific situation. Compare current local prices for both fuels and consider the efficiency of your appliances to confirm which is more cost-effective for you.
Is it cheaper to run space heaters or central heat?
If you are questioning whether it is cheaper to run space heaters or central heat, consider the size of the space. Running a space heater is cost-effective, but it only warms a small area. Using multiple space heaters in various rooms simultaneously can end up costing more than running central heating.
What is the most affordable way to heat a home?
Natural gas is generally less expensive than electricity, making gas heaters economical to run. Additionally, the installation costs for natural gas heaters are often lower compared to certain alternatives, such as heat pumps.
| Heat source | Average installation cost |
|---|---|
| Natural gas furnace | $2,000 – $6,900 |
| Heat pump | $3,800 – $8,200 |
| Mini-split heat pump | $3,000 – $10,000 |
| Oil furnace | $2,500 – $10,000 |
| Propane furnace | $2,200 – $7,400 |
| Electric furnace | $1,900 – $5,600 |
| Radiant floors | $10,000 – $34,000 |
| Baseboard heater | $200 – $1,200 per unit |
| Portable heater | $20 – $300 per unit |
How can I reduce heating expenses in my home?
To reduce heating expenses, invest in an energy-efficient heating system and maintain it properly. Additionally, optimize the thermostat settings, use programmable thermostats, seal drafts, and ensure proper insulation in your home.
Are there government incentives available for improving home heating efficiency?
Yes, various governments offer incentives to promote home heating efficiency. These may include tax credits, rebates, and grants for energy-efficient upgrades such as installing efficient heating systems, improving insulation, or using renewable energy sources. Check with local and national authorities for available incentives in your area.
Questions to ask an HVAC contractor
When upgrading your furnace or heat pump for better energy efficiency, it's crucial to ask your HVAC installer or furnace installer the following questions:
What size furnace or heat pump do I need for optimal energy efficiency?
What are the energy efficiency ratios of the units you recommend?
How much will an upgraded heating system cost? What do you include in that price?
What is the warranty coverage for the unit and your labor?
What maintenance does the unit require?
Are there any available rebates, tax credits, or incentives for upgrading to an energy-efficient system?
How noisy is the heating system I’m considering?
How long will it take to order and install the heater?
Do you comply with local building codes and regulations and take care of permitting?
Using our proprietary cost database, in-depth research, and collaboration with industry experts, we deliver accurate, up-to-date pricing and insights you can trust, every time.