How to Calculate Home Heating Costs
Heating is one of the largest home energy expenses. Understanding how to calculate annual heating costs helps you budget accurately and compare the true cost of different fuel types.
Step 1: Determine Your Heat Load (BTUs Needed)
A rough rule: 30โ60 BTUs per square foot for most climates (30 for warm climates, 60 for cold).
For a 2,000 sq ft home in a cold climate: 2,000 ร 55 = 110,000 BTU/hour heating capacity needed
Step 2: Calculate Annual BTU Consumption
Use Heating Degree Days (HDD) for your location (available from NOAA):
Annual BTUs = Heat Load ร 24 ร HDD / (65ยฐF โ Design Temperature)
A simpler estimate: Multiply your furnace BTU/hr ร hours of operation.
Cost Per Fuel Type Comparison
| Fuel | Unit | BTUs per Unit | Furnace Efficiency | Cost per Unit (approx 2024) | Cost per 100,000 BTU |
|---|---|---|---|---|---|
| Natural gas | Therm | 100,000 | 90% AFUE | $1.20 | $1.33 |
| Propane | Gallon | 91,500 | 90% AFUE | $2.80 | $3.40 |
| Heating oil | Gallon | 138,500 | 85% AFUE | $3.40 | $2.89 |
| Electric resistance | kWh | 3,412 | 100% | $0.15 | $4.40 |
| Heat pump | kWh | 3,412 | 250% COP | $0.15 | $1.76 |
Annual Cost Example
Home needs 80 million BTU/season:
- Natural gas: 800 therms ร $1.20 / 0.90 efficiency = $1,067/year
- Propane: 800 ร 100,000 / 91,500 gallons ร $2.80 / 0.90 = $2,726/year
- Heat pump: 80,000,000 / 3,412 / 2.5 COP ร $0.15 = $1,406/year
Use our home heating cost calculator to compare all fuel types for your climate zone.