Heating cost comparison
Every fuel priced in a different unit, converted to one number: what it costs to deliver a million BTU of heat into your house.
- Natural gas
- $16.67
- Firewood, seasoned hardwood
- $21.43
- Wood pellets
- $26.68
- Heating oil
- $30.58
- Propane
- $33.43
- Electricity, resistance heat
- $49.82
A typical single family home needs roughly 80 MMBtu of delivered heat per year. At these prices that is$1,333a year on the cheapest fuel.
Reference prices and conversions
Every figure below is sourced from the US Energy Information Administration. The conversion column is what makes the comparison possible: it is how much energy one unit of each fuel contains.
| Fuel | Sold by | Reference price | MMBtu per unit | Efficiency | $/MMBtu delivered |
|---|---|---|---|---|---|
| Natural gas | therm | $1.50 | 0.1000 | 90% | $16.67 |
| Firewood, seasoned hardwood | cord | $300 | 20.0 | 70% | $21.43 |
| Wood pellets | ton | $350 | 16.4 | 80% | $26.68 |
| Heating oil | gallon | $3.60 | 0.1385 | 85% | $30.58 |
| Propane | gallon | $2.60 | 0.0915 | 85% | $33.43 |
| Electricity, resistance heat | kWh | $0.17 | 0.0034 | 100% | $49.82 |
What the comparison leaves out
Fuel cost is one input into a heating decision, and rarely the deciding one on its own.
- Capital cost. A pellet stove installed runs into the thousands. Divide that by the annual saving to get a real payback period.
- Labour. Wood heat is work: loading, ash removal, weekly cleaning, an annual chimney sweep. Gas is a thermostat.
- Power dependence. A pellet stove needs electricity for its auger and blower, so it stops in an outage unless you have a battery backup. A wood stove does not.
- Storage. Three tons of pellets or four cords of wood need dry space you may not have.
For the pellet versus wood decision specifically, seepellet stove vs wood stove.
Common questions
Are wood pellets cheaper than propane?
Usually yes, on a cost per million BTU basis, because propane carries a high price per unit of energy. The gap narrows when pellet prices spike in midwinter or when propane is on a long term contract. Run both through the calculator with your own local prices, since propane in particular varies enormously by region and by whether you own or rent the tank.
Why does appliance efficiency matter so much?
Because you pay for the fuel, not the heat that reaches the room. An open fireplace can waste 85 percent of the energy in the wood up the chimney, so cheap firewood in a bad appliance costs more per usable BTU than expensive pellets in a good one. Efficiency is the multiplier that decides which fuel actually wins.
Is natural gas always the cheapest option?
Where it is available, it usually is, and that is why most of the country heats with it. Pellets and firewood become competitive where gas lines do not reach, which is exactly the market that buys them: rural properties choosing between propane, oil, electric and wood.
Does this include the cost of the appliance?
No, this compares fuel only. A pellet stove is a real capital cost with a real payback period, and switching fuels rarely makes sense on fuel price alone unless you are replacing an appliance anyway. Use the fuel comparison to size the annual saving, then weigh it against the install cost.