Comparing Heating Fuel Costs in New Hampshire
The cost of heating a New Hampshire home depends on two numbers: how much heat your home loses, and how much it costs to replace that heat from your chosen fuel and equipment. Homeowners often focus on the first half of that equation (insulation, air sealing) and on equipment efficiency, but ignore the second half: fuel choice. The result is that higher-efficiency equipment does not always produce a lower yearly heating bill.
At A.J. LeBlanc Heating, we help NH homeowners think through both halves before they invest. Below is the framework we walk through with customers across Manchester, Bedford, Nashua, Concord, Salem, and Auburn.
The five fuels NH homes typically use
Most New Hampshire homes rely on one of five primary heating fuels:
- Natural gas: available in the larger NH cities (Manchester, Nashua, Concord, parts of Bedford). Typically the lowest-cost fuel where available.
- Fuel oil: still common in central and rural NH, especially in older homes with cast-iron boilers.
- Propane: widely used where natural gas is not available. Common with newer high-efficiency furnaces and boilers.
- Electricity (heat pump or resistance): resistance heat is expensive to operate, but modern cold-climate heat pumps deliver heat at a fraction of the operating cost of resistance heat.
- Wood or pellets: common as a primary or supplemental heat source, especially in rural NH.
Why fuel type matters as much as equipment efficiency
The simplest version of the math:
Annual cost = (annual BTUs needed) / (BTUs per unit of fuel x equipment efficiency) x (price per unit of fuel)
Two examples make the point.
Example A: oil vs. propane. Oil and propane sometimes trade at similar dollar-per-gallon prices, which can make a high-efficiency propane furnace look obviously better than an older 80 percent oil furnace. The catch is that one gallon of fuel oil contains roughly 138,500 BTUs, while one gallon of propane contains only about 91,500 BTUs. That 50 percent BTU difference means an older oil furnace can sometimes be cheaper to operate than a newer propane furnace at the same price per gallon. Whether that holds depends on current fuel prices.
Example B: electric resistance vs. heat pump. A modern cold-climate heat pump can deliver 2 to 3 units of heat for every 1 unit of electricity consumed, even at NH winter temperatures. An electric resistance baseboard delivers exactly 1 unit of heat per unit of electricity. At the same electric rate, the heat pump operates at a fraction of the cost.
How to compare options fairly
The right comparison is cost per million BTU of delivered heat, factoring in current local fuel prices and equipment efficiency. Some useful reference numbers:
- Natural gas: ~100,000 BTU per therm
- Fuel oil: ~138,500 BTU per gallon
- Propane: ~91,500 BTU per gallon
- Electricity: 3,412 BTU per kWh (more if you have a heat pump)
- Cord wood: ~20 to 25 million BTU per cord (varies by species and moisture)
The New Hampshire Department of Energy publishes weekly average fuel prices for the state. Combined with your equipment's actual efficiency, those prices let you compare apples to apples.
What this means for replacement decisions
When customers ask whether to repair or replace, we work through:
- The home's annual heat load (BTU per year), driven by size, insulation, and air tightness
- Available fuels at the address (some NH neighborhoods have no natural gas service, period)
- Current and projected fuel prices
- Equipment efficiency on the replacement options under consideration
- NHSaves rebates and utility incentives, which can change the math significantly
- How long the customer expects to stay in the home
In some cases, the right answer is a high-efficiency boiler or furnace using the existing fuel. In others, it is a heat pump (central or ductless) paired with backup heat. Increasingly, hybrid systems that use a heat pump as the primary heat source and the existing furnace or boiler as backup are the best of both worlds: low operating cost most of the year, dependable performance on the coldest nights.
NHSaves and federal tax credits
NHSaves utility rebate programs are still operating in 2026 and can reduce the upfront cost of a heat pump, high-efficiency boiler or furnace, or heat pump water heater. Rebate amounts vary by utility and program year, so check nhsaves.com or ask us for current figures. The federal 25C Energy Efficient Home Improvement Credit ended December 31, 2025 and is not available for 2026 installations. For details on what changed and what remains, see our guide to the 25C heat pump and HVAC tax credit expiration.
Run the numbers for your specific home
Our Heat Pump Cost Comparison Calculator lets you plug in your current fuel rate and electricity rate to see cost per million BTU side-by-side at different outdoor temperatures. It is the fastest way to see how the math works for your situation.
Get a fair comparison for your home
If you are weighing repair vs. replace, or trying to compare heating system options for a New Hampshire home, contact A.J. LeBlanc Heating. We will run the math with you. Serving NH families since 1928.
Frequently Asked Questions
Which heating fuel is cheapest in New Hampshire?
Where it is available, natural gas is usually the lowest-cost fuel. Cold-climate heat pumps are competitive with natural gas in many NH homes once equipment efficiency is factored in. Fuel oil, propane, and electric resistance heat tend to be more expensive, in roughly that order.
Does a higher AFUE furnace always save money?
Not necessarily. If switching fuels at the same time, the price and BTU content of the new fuel matter at least as much as the AFUE rating.
Are heat pumps practical in New Hampshire?
Yes. Modern cold-climate heat pumps are rated to deliver heat at well below zero. In most NH homes they pair with a backup heat source for the coldest stretches.
How do I compare fuels apples-to-apples?
Convert each option to cost per million BTU of delivered heat. The NH Department of Energy publishes current fuel prices that make this straightforward.
Do rebates and tax credits really change the math?
Rebates can. NHSaves rebates remain available in 2026 and can shift the payback comparison between options. The federal 25C credit ended December 31, 2025 and no longer applies to new installations. We track current incentives, so ask us what applies to your project.