According to the U.S. Department of Energy, heating and cooling account for nearly half of the energy use in a typical U.S. home, making it the largest energy expense for most households. While few people enjoy spending money on home heating fuels, most of us are willing to pay for it for our comfort.
Here is some help in determining the most economical heating method to evaluate the cost per unit of heat. This is referred to as a British thermal unit (Btu).

Evaluating cost per unit of heat for propane and electricity
The Btu content per gallon of propane is 91,500 Btu.
The Btu content for electricity is 3,413 Btu per kilowatt-hour (kWh).
It takes 26.8 kWh to equal the Btu content of one gallon of propane.
Using the U.S. Energy Information Administration’s table on residential propane and electricity rates for November 2014, $2.40 per gallon, excluding taxes, and 13.01 cents per kWh, we arrive at the following calculation for electric heat:
26.8 kWh x 13.01¢ = $3.49
If we used only Btu content to determine the best energy source for home heating, it would appear that propane is less costly than electricity if the price for propane is below $3.49 per gallon.

Efficiency must also be considered
While we may have determined the cost of the actual heat content, what matters even more is the cost of the useable heat (warmth). A propane furnace may have an efficiency rating from 80­-95%. Using a 90% efficient propane furnace for an example, (which means 10 percent of the Btus are not converted to useable heat), here is the math:
91,500 Btu-10% Btu loss = 82,350 Btu
So now it only requires 24 kWh to equal the delivered Btu content of propane.
24 kWh x 13.01¢ = $3.12

Electric heat is 100 percent efficient
What may surprise most consumers is that the least efficient electric heating system delivers 100% efficient heat. Yes, electric resistance heat (i.e., space heaters, baseboard heating) is 100 percent energy efficient. Every single Btu in a kilowatt-hour is delivered as useable heat. So if you are paying more than $3.12 per gallon of propane for a 90% efficient propane furnace, it would be cheaper to use electric resistance heat.

Pumping up efficiency
There are even more efficient electric heating systems called heat pumps. An air-source heat pump is at least 250 percent energy efficient. How is it so efficient?
In the heating mode, heat pumps do not use electric energy to create heat; they use it to pump heat into your home through a reversal of the refrigeration process. Air source heat pumps are equipped with some type of auxiliary heat for those times when temperatures are near freezing or dip below. The typical back-up is in the form of electric resistance heat strips, but there is also a dual fuel propane option.
In calculating the Btu’s per kilowatt hour for a heat pump we use this formula:
3413 Btu x 250% = 8532 Btu.
This means that it only takes 9.65 kilowatts using an air source heat pump to deliver the same amount of warmth as a 90% efficient propane furnace.
9.65 kWh x 13.01= $1.25
You would need to purchase propane at or below $1.25 per gallon to break even with the cost of home heating using an air source heat pump. Efficiency increases even more sharply when looking at the 350+% efficiencies of a geothermal (water source) heat pump. An additional advantage of geothermal systems is that they can be equipped to provide free water heating most of the year.
Providing reliable energy facts – regardless of fuel type
At Access Energy Cooperative, we believe it is our responsibility to provide members with reliable energy facts regardless of fuel type so you can get the most from your energy dollars. We are committed to helping you find the best energy solution for your budget and lifestyle and hope you will consult with your local co-op before making any big home-heating decisions.  
Source: Anne Prince

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