Heat Cost Calculator

Fuel Source

Cost Per Unit ($)

System Efficiency (%)

Estimated Annual Heat Demand (Million BTU)

Cost Analysis

Cost per 1 Million BTU (Useful Heat)

Estimated Annual Heating Cost

This calculation provides a comparison based on the useful heat delivered ($Q_{useful} = Q_{input} \times \text{Efficiency}$). Actual costs may vary.

What Is a Heat Cost Calculator?

A Heat Cost Calculator is a digital tool that estimates how much you’ll spend to meet your annual heating demand. It uses known fuel energy content (BTU), your system efficiency, and the local price per fuel unit to calculate:

Cost per 1 Million BTU of useful heat
Total annual heating cost
Efficiency-adjusted energy comparisons

This tool is designed to show true heating value, not just fuel price — meaning it factors in how efficiently your system converts fuel into heat.

How the Heat Cost Calculator Works

The calculator uses a simple but accurate energy equation based on useful heat output:

Useful Heat (BTU) = Fuel Energy Content (BTU) × System Efficiency

It then determines how much that useful heat costs by dividing the fuel price per unit by the useful heat per unit, giving you the real-world cost of heat energy delivered.

Here’s how it works step by step:

Select Your Fuel Source
Choose from multiple energy types such as:
- Natural Gas (100,000 BTU per Therm)
- Propane (91,500 BTU per Gallon)
- Heating Oil (138,600 BTU per Gallon)
- Electric Resistance (3,412 BTU per kWh)
- Electric Heat Pump (3,412 BTU per kWh at 250% efficiency)
Enter the Fuel Price
Input your local cost — for example, $1.50 per Gallon of propane or $0.12 per kWh for electricity.
Adjust System Efficiency
This value shows how well your system converts energy into usable heat.
- A gas furnace may be 85% efficient.
- A heat pump can reach 250% efficiency (Coefficient of Performance = 2.5).
Enter Annual Heat Demand
Estimate how much heat your property needs per year, in Million BTU (MMBTU).
Example: A medium-sized home might require 80–100 MMBTU per year.
Click “Calculate Heating Costs”
The calculator instantly displays:
- Cost per 1 Million BTU (useful heat)
- Estimated total annual cost

You can then reset or compare results for multiple fuel sources side-by-side.

Behind the Math — Simple but Accurate

Here’s what’s happening behind the scenes:

Each fuel source has a known energy content per unit (BTU/unit).
The system efficiency adjusts that number to find useful heat.
The fuel cost is divided by useful heat to find cost per million BTU.

Example:

Fuel: Natural Gas
Energy per unit: 100,000 BTU/Therm
Efficiency: 85%
Price: $1.20 per Therm

Calculation:

Useful energy = 100,000 × 0.85 = 85,000 BTU
Cost per BTU = 1.20 / 85,000 = $0.0000141
Cost per 1 Million BTU = 0.0000141 × 1,000,000 = $14.12

So, heating your space with natural gas at 85% efficiency costs roughly $14.12 per million BTU.

Why Use a Heat Cost Calculator?

Here’s why this tool is useful for homeowners, facility managers, and energy professionals alike:

Benefit	Description
Compare Fuel Options	See how natural gas, propane, oil, and electricity stack up.
Plan Your Budget	Estimate your total annual heating expense.
Understand Efficiency Impact	Learn how system upgrades can lower costs.
Support Sustainability	Identify cleaner and more efficient heating options.
Make Smart Energy Decisions	Balance affordability, availability, and performance.

Whether you are upgrading your furnace, installing a heat pump, or evaluating your current heating system, this calculator helps you visualize the real financial impact of each option.

Example: Comparing Heating Options

Let’s compare a typical home needing 100 Million BTU/year of heat.

Fuel Type	Price per Unit	Efficiency	Annual Cost (Approx.)
Natural Gas	$1.20 / Therm	85%	~$1,412
Propane	$2.50 / Gallon	80%	~$2,735
Heating Oil	$3.50 / Gallon	82%	~$2,940
Electric Resistance	$0.15 / kWh	100%	~$4,930
Heat Pump	$0.15 / kWh	250%	~$1,970

Result: Natural Gas and Heat Pumps offer the best balance of cost and efficiency.

Efficiency Tip: Every Percent Counts

A 10% boost in heating efficiency can cut your annual costs by hundreds of dollars.
Example: If your furnace efficiency rises from 80% to 90%, that’s nearly 12.5% less energy waste.

Small upgrades like sealing air leaks, adding insulation, or upgrading to a condensing boiler can significantly improve real-world performance.

Understanding “Useful Heat” vs. “Fuel Energy”

Fuel Energy (Input Heat): Total BTUs in your fuel.
Useful Heat (Output Heat): The heat your system actually delivers to your rooms.

The difference between these numbers shows how much energy is lost through exhaust gases, inefficiency, or heat pump cycles.
The Heat Cost Calculator automatically adjusts for this — giving you cost per useful heat, not just fuel burned.