Comparing propane and electric costs

Posted by Guest Blogger on December 17, 2012

Are you interested in comparing electric heating costs to propane heating costs? Let’s walk through how to do this. Liquid propane (LP) has 91,500 British thermal units (BTUs) per gallon. Electric heat has 3,413 BTUs per kilowatt hour (kWh) or 1,000 watts per hour. Let’s assume that the cost of propane is $1.50 per gallon and the electric rate is $.049 per kWh.

It is important to compare costs on a BTU basis in order to get an apple-to-apple comparison of what it will cost to heat an average home in an average heating season with both fuel sources. This will give you an idea of what the annual savings costs of each will be and will allow for a comparison.

Let’s make some assumptions:
• The average home will use 100 million BTUs to heat throughout an average heating season.
• A typical propane furnace will have an efficiency rating of 95 percent and a typical electric heating source will be 100 percent efficient.
• Using the current rate of $1.50 per gallon for propane, if we look at the one million BTU cost for propane, this cost will be $17.26 per million. The cost of one million BTU for electric is $14.36 per million at $.049 per kWh.
• The home in our example used one hundred million BTUs, so our total cost of propane per 100 million is $1,726. If the same home used one hundred million btu’s of electricity, the total cost to heat the home would be $1,436.

In this example, the total savings of using electric over propane is $290 annually. This doesn’t seem like much, but it can add up over the years and it is also important to keep in mind that propane prices jump around - just last year propane was in the neighborhood of $1.80 and two years ago it was even higher, while Off-Peak electric rates has been constant.

If you are looking at changing fuel sources, or if you have more questions about comparing different fuel types, please give an Energy Use Consultant a call at (763) 477-3000.