Operating Cost: Heat Pump vs. Propane Furnace or Boiler

For a typical southern New Hampshire home, a cold-climate heat pump generally has a lower operating cost than a propane furnace or boiler at current NH propane and electricity rates. The propane system becomes more economical at the coldest outdoor temperatures when heat pump efficiency drops. A dual-fuel configuration that pairs both and switches automatically is typically the lowest-cost option overall.

Below is the actual math behind that conclusion using NH-representative numbers, plus the assumptions that change the answer.

The numbers we will use

For this comparison:

Propane price: $3.75 per gallon (NH average as of mid-2026; varies by supplier and season)
Propane heat content: 91,500 BTU per gallon
Modern propane furnace or boiler efficiency: 95 percent AFUE
Electricity price: $0.30 per kWh (NH residential rate as of mid-2026; varies by utility and supply contract)
Cold-climate heat pump COP at 47°F: 3.0
Cold-climate heat pump COP at 17°F: 2.3
Cold-climate heat pump COP at 0°F: 1.8
Cold-climate heat pump COP at -10°F: 1.3

Real NH conditions vary; this is a representative comparison, not a forecast for your specific bill.

Cost per million BTU: propane furnace or boiler

One gallon of propane delivers 91,500 BTU of fuel energy. At 95 percent AFUE, the furnace or boiler converts that into 86,925 BTU of usable heat.

To produce 1,000,000 BTU of heat:

1,000,000 / 86,925 = 11.5 gallons of propane
11.5 gallons x $3.75 per gallon = $43.13 per million BTU

Cost per million BTU: cold-climate heat pump

One kWh of electricity delivers 3,412 BTU. Multiplied by the heat pump's COP, we get usable heat output. Let's compute at each operating point:

At 47°F outdoor (COP 3.0)

1 kWh = 3,412 BTU x 3.0 = 10,236 BTU of usable heat
1,000,000 / 10,236 = 97.7 kWh
97.7 x $0.30 = $29.31 per million BTU

At 17°F outdoor (COP 2.3)

1 kWh = 3,412 BTU x 2.3 = 7,848 BTU
1,000,000 / 7,848 = 127.4 kWh
127.4 x $0.30 = $38.22 per million BTU

At 0°F outdoor (COP 1.8)

1 kWh = 3,412 BTU x 1.8 = 6,142 BTU
1,000,000 / 6,142 = 162.8 kWh
162.8 x $0.30 = $48.84 per million BTU

At -10°F outdoor (COP 1.3)

1 kWh = 3,412 BTU x 1.3 = 4,436 BTU
1,000,000 / 4,436 = 225.4 kWh
225.4 x $0.30 = $67.62 per million BTU

Where the crossover happens

At these rates, the heat pump is cheaper than propane down to roughly the 5 to 10°F outdoor range. Below that, propane becomes more economical per BTU delivered. Above that, the heat pump wins (often significantly).

Most southern NH winter days fall above 17°F outdoor. The heat pump is the lower-cost choice for the majority of the heating season. The propane system covers the deep cold tail.

Why a dual-fuel system is the answer for most NH homes

A dual-fuel configuration pairs a cold-climate heat pump with the existing or new propane furnace or boiler. A smart thermostat or built-in controls automatically switch between the two based on outdoor temperature:

Above the changeover temperature (typically 20 to 30°F): heat pump runs
Below the changeover temperature: propane backup runs

The exact changeover temperature is set based on current local rates. As electricity or propane prices change, the changeover can be re-tuned. This setup consistently delivers the lowest year-round operating cost for NH homes that use propane.

Other factors that affect the real-world comparison

Fuel prices: NH residential propane has mostly held between $3.30 and $3.90 per gallon in recent years, but your delivered price varies by supplier, usage tier, and tank ownership. Electricity rates also vary by utility and supply contract.
Cooling included: the heat pump provides AC in summer. The propane furnace does not. If you would otherwise buy or own a separate AC system, that cost should be factored in.
Rebates and incentives: the federal 25C tax credit ended December 31, 2025, but NHSaves utility rebates still apply to qualifying heat pump installations and financing can spread the upfront cost.
Equipment lifespan: heat pumps typically last 12 to 15 years; propane furnaces and boilers often longer. Replacement frequency affects long-term cost.
Installation cost: if you are replacing a propane furnace or boiler anyway, the incremental cost of converting to a dual-fuel system can be modest, especially with rebates.

Run the math for your specific home

Plug your current propane price and electric rate into our Heat Pump Cost Comparison Calculator to see cost per million BTU at different outdoor temperatures. The crossover temperature shown above shifts with rates; the calculator updates in real time.

Schedule a consultation

If you are running a propane furnace or boiler and want to model what a heat pump or dual-fuel setup would actually cost to operate in your NH home, contact A.J. LeBlanc Heating. We will run the numbers with your current rates and your home's actual heat load. Serving New Hampshire families since 1928.

Frequently Asked Questions

Is a heat pump cheaper to operate than propane in New Hampshire?

Above roughly 5 to 10°F outdoor, yes, at current rates. Below that, propane is cheaper per BTU. For the majority of the NH heating season, the heat pump wins. A dual-fuel pairing captures both.

What is the crossover temperature for heat pump vs propane?

At current NH rates, the heat pump is competitive down to roughly 5 to 10°F. The exact number depends on your electricity rate, propane rate, and the heat pump's low-temperature performance.

How does a dual-fuel system know when to switch?

A smart thermostat or built-in control monitors outdoor temperature. When the temperature drops below the configured changeover setpoint, the system switches from heat pump to propane backup. When it rises again, it switches back. The homeowner does not need to do anything.

Will a heat pump alone work in a NH propane home?

For well-insulated NH homes, yes. For older homes with high heat loss, a dual-fuel pairing produces better results on the coldest days. We size the heat pump and configure the changeover to fit the specific home.

What rebates and tax credits apply?

The federal 25C Energy Efficient Home Improvement Credit ended December 31, 2025 and is not available for 2026 installations. NHSaves utility rebates remain available, with amounts varying by program and household income. See our post on the 25C tax credits ending for current status, or ask us for current rebate amounts.