Heat pump vs propane: at EIA’s forecast prices for winter 2026–27, a basic heat pump delivers heat for about $24 per million BTU on average, versus about $29 for a 95% propane furnace and $34 for an 80% model. Moreover, the gap is widest in the South, where propane is expensive and electricity is cheap, and narrowest in the Midwest and Northeast. A propane furnace, however, still costs less to install, so the choice isn’t automatic.
Below, we compare heating costs by region, as well as installed prices and the trade-offs of each system, so you can see which one fits your home. Information checked on November 4, 2026.
Heat pump vs propane: heating cost by region
| Region | Basic heat pump (COP 2.2) | High-efficiency heat pump (COP 3.0) | 95% propane furnace | 80% propane furnace |
|---|---|---|---|---|
| Northeast | $34.89 | $25.59 | $37.75 | $44.83 |
| Midwest | $22.47 | $16.48 | $23.48 | $27.88 |
| South | $20.98 | $15.39 | $36.72 | $43.60 |
| U.S. average | $24.29 | $17.81 | $29.01 | $34.44 |
In other words, a heat pump beats propane in every region at these prices, even at the federal minimum efficiency. Still, in the Northeast and Midwest the savings with a basic heat pump are small, while a high-efficiency model saves roughly 30% or more.
The cold-weather catch
Keep in mind that a heat pump’s rating is a seasonal average, and its efficiency drops as temperatures fall. For example, ENERGY STAR’s cold-climate certification requires a COP of at least 1.75 at 5°F. At that efficiency, therefore, heat costs about $44 per million BTU in the Northeast and $28 in the Midwest, roughly matching or exceeding a 95% propane furnace. For this reason, many cold-climate homes keep propane as backup in a dual-fuel setup.
What propane homes spend today
To put this in context, EIA expects households that heat mainly with propane to spend about $1,246 on average this winter, from November through March, including $1,687 in the Northeast, $1,305 in the Midwest and $1,164 in the South. Meanwhile, homes that heat with electricity are expected to spend $1,196 on average, although that total includes all of their electricity use, not just heating.
Installed cost: heat pump vs propane furnace
| System | Typical installed cost | Source |
|---|---|---|
| Propane furnace | $3,700–$14,200 | Fixr (Jan. 28, 2026) |
| Propane furnace | $3,000–$12,000+ | HomeGuide (Dec. 31, 2025) |
| Propane tank installation, if needed | $300–$5,000 | HomeGuide (Dec. 30, 2025) |
| Air-source heat pump, by comparison | $8,000–$15,000 | HomeGuide (July 25, 2025) |
Overall, a propane furnace is cheaper up front. However, the heat pump also cools, so if your AC is aging too, compare it with a propane furnace plus a new AC. See our AC replacement cost guide and our heat pump cost guide.
Pros and cons of each
- Heat pump: first of all, lower running costs in most places, central cooling included, no combustion and no fuel deliveries. On the other hand, it costs more up front, and efficiency drops in deep cold.
- Propane furnace: in contrast, strong heat on the coldest days and a lower purchase price. However, it needs a tank, regular deliveries, CO alarms and annual combustion inspections, as CPSC advises for all fuel-burning heating systems.
Heat pump vs propane: which should you choose?
- Choose a heat pump if you live in the South or another mild climate, need a new AC anyway, or want to stop buying propane.
- Choose dual fuel instead if winters are long and cold, because the heat pump handles mild days and propane covers the coldest ones. Our guide to dual fuel vs heat pump shows how to set the switchover point.
- Keep a propane furnace if your budget is tight, the furnace is also fairly new and propane is cheap where you live.
Similarly, for the gas version of this comparison, read heat pump vs furnace.
Related guides: See also our guide on heat pump vs oil heat.
Heat pump vs propane FAQ
Is a heat pump cheaper than propane heat?
Usually, yes. In fact, at EIA’s forecast winter prices, our calculation shows a basic heat pump at about $24 per million BTU versus about $29 for a 95% propane furnace on average.
Do propane prices change much?
They can. For instance, EIA’s weekly survey showed the U.S. residential average at $2.73 a gallon on October 26, 2026, before taxes, up about 30 cents from a year earlier.
Can a heat pump work with a propane furnace?
Yes, since a dual-fuel system pairs the two, as long as the furnace is compatible with the new heat pump and its indoor coil.
Sources and review
Sources: EIA, Winter Fuels Outlook 2026–27 (October 6, 2026); EIA, Heating Oil and Propane Update (October 28, 2026); EIA, British thermal units; ENERGY STAR, central AC and heat pump specification, version 6.2; Fixr, furnace replacement cost (January 28, 2026); HomeGuide, new furnace cost (December 31, 2025); HomeGuide, oil-to-gas conversion cost (propane tank) (December 30, 2025); HomeGuide, AC replacement cost (heat pump cost) (July 25, 2025); CPSC, winter heating safety tips (January 23, 2026). All checked on November 4, 2026.
Written by: HVAC Switch. Last updated: November 4, 2026. Read our editorial policy to learn how we research prices, or contact us if you spot an error.