Propane, Natural Gas, or Electric: Which Type of Heater is Cheapest to Run?

Christine Herrington

Christine is our Chief Editor and a contributing writer to the site.

Last Updated on January 19, 2022

Picking the right heating system for your house and budget requires careful consideration and calculations. How a heater warms your home and the type of fuel it uses, influences how much you pay yearly to heat your space.

The area in which you live and your heating needs also play a huge part when you’re deciding on heating systems. Natural gas and propane are two great choices, and although somewhat new, propane is the most practical choice. Here are some more details if you’ve been wondering which type of heater is the cheapest to run.

Your Heating Needs

You need to choose a heating system that fits your family’s needs and budget, but this may change depending on where you live, how much space you’re looking to heat, and how often you need to heat your home.

Do you live in a climate that requires a year-round heating solution? Or will you only be using your heater intermittently on chilly evenings? Many times, the heater you pull out of the basement or attic is small, portable, and electric. However, if you’re using this as a source for heating your home nine months out of the year, this is not a practical or affordable solution.

A central heating system is most useful for those homes that need to be heated more than six months out of the year, but whether you choose propane, natural gas, or electric depends on the cost of power in your area when deciding which type of heater is cheapest to run.

Types of Heaters

How your heating system warms you up will also influence how often you use it and how much you will pay to keep yourself and your loved ones cozy. Although each company’s design may put a new twist on how it heats your house, most rely on one of three methods to warm space: convection, infrared, or micathermic.

1. Convection

Top-sellers for decades, convective heating systems warm the air inside the room, not the objects or people. The pros of convection heaters are that you can use them for long periods and heat large areas. The cons are that convection heaters can take a while to heat a room and dry out the environment after extended use.

These heat systems usually use electricity or gas to work, and you also have to watch out for cold spots, window drafts, or open doors. Although reliable and effective, there are other, cheaper ways to heat your home.

2. Infrared

This ingenious technology is also called radiant heating and works by heating objects, including people, in the room instead of the air around them. Although this isn’t a new discovery, more people turn to infrared technologies to minimize costs and reduce their carbon footprint.

Running off electricity, propane, or natural gas, infrared heaters are perfect for drafty or poorly insulated areas. They are more expensive than convective heaters and shouldn’t be operated in spacious rooms.

3. Micathermic

This is a relatively new option in terms of heating systems, and it doesn’t come at the most practical price point. Micathermic heat has multiple layers of mica covering a heating element, which then radiates throughout the room.

A substantial benefit of micathermic heaters is that they are usually quiet and slim, so that you can use them in almost any situation. They aren’t cheap, but they are effective.

Using the same technique as radiant heating systems, micathermic heaters emit electromagnetic rays to heat objects and people inside the room. However, micathermic heaters offer greater heat retention, so you can operate the unit at a lower setting for longer without compromising the comfort of your home. This feature makes them more cost-effective long-term.

Heating Costs Broken Down

The accurate determination of how much you will pay for heating depends on what kind of heater you have, but it mostly depends on what kind of fuel powers your system. If you’re moving or switching up your system, you can easily make some calculations to determine which type of heater is the cheapest to run.

1. Oil

Water heaters and oil burners that run forced air ductworks are the original heating systems. Some of these antiquated systems are not as efficient as other types of heaters. Most oil-burning heaters have only 70% efficiency, or at the very best, 86%.

Only about 5% of the U.S. population still use oil to run their primary heating systems, and when they do, it costs them around $1,300 a year. In some regions, 100 to 125 gallons of heating oil will cost you $2.75 per gallon. Depending on how much space you have to heat and how long you need to heat it for, you could be paying much more than $1,300 annually.

2. Natural Gas and Propane

This is one of the cheapest options across the country, in part because of the cost but also due to availability. Since gas is piped in, many towns and cities take advantage of this convenience and use it in municipal buildings. In contrast, propane, which is compressed and transported by truck, is often reserved for rural residences.

As of 2020, natural gas costs 9.52 per 1,000 ft³, which means homeowners can expect to pay $1,200 per year for heating their home with natural gas (although this may change when natural gas prices rise). The heating systems themselves are made to last, with many lasting decades or more.

Propane heaters are exceptionally useful as they won’t contaminate groundwater or runoff. In the more agricultural, rural areas of the country, propane may be an ideal choice. It is also the most practical as you can heat a 2,000 ft² home for $57 to $191 a month, depending on the temperature difference and how long the cold season lasts.

3. Electric

For small-scale, temporary heating solutions, electrical heat in a space heater or micathermic heater is ideal. Electric heaters are an outstanding solution that won’t break the bank. However, if you’re looking to heat a larger area (more than one room) for more than a temporary period, then you should look to more practical solutions, such as a multi-zone mini split ductless system.

The price of electrical energy is measured by the kilowatt-hour (kWh), and the average cost per kWh in 2020 was 13¢. 1kWh is equivalent to 1,000W, so if you ran a 1,500W electric heater for 8 hours a day, it would cost you a little over a dollar to operate daily (1.5kWh x $0.13 x 8 hours = $1.56).

This may not seem like a lot, but if you have to heat more than one room for more than a third of the day, this is not a cost-effective option. In reality, most heating systems that run off electricity will cost you $1,200 a year.

The great thing about electric energy is its efficiency. Almost 100% of the electrical power is transferred into heat, which is more than any other heating source. But this doesn’t mean that electricity is greener (unless you produce it with solar panels) because much of the electricity you’re using to run your heating system is made of fossil fuels.

In Conclusion

Choosing the right heating system for your budget and lifestyle requires you to consider your heating needs, the climate in which you live, and the prices for fuel or electricity around you.

Suppose you already have a heating system in place and need to swap out significant parts of your heating system for a more practical, inexpensive option. In that case, you will need to calculate the cost of any renovations into your heating budget.

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