Fuels Used for Heating and Cooling Homes in the United States: Trends and Insights

By Mike Haines 10/08 Hi, I’m Mike Haines, HVAC wholesaler at AC Direct. When it comes to heating and cooling homes across the United States, there’s a surprising amount of variety in the types of fuels that are used. Depending on where you live, your primary fuel source could be natural gas, propane, electricity, or heating oil, each offering its own pros and cons. But how do you decide which one is best for your home? In this article, I’ll walk you through the key fuels used in residential HVAC systems, explore regional trends, and give you a breakdown of their costs, availability, and environmental impacts. Plus, I’ll suggest some handy tables and graphs to help you compare these energy sources effectively.

Fuel Sources for Home Heating in the United States

The main fuels used for home heating in the U.S. are natural gas, electricity, propane, heating oil, and wood. Each of these fuels has regional preferences, costs, and varying degrees of environmental impact. Understanding how they work can help you make informed decisions when installing or upgrading your HVAC system.

1. Natural Gas

Natural gas is the most common fuel used for heating homes in the United States. According to the U.S. Energy Information Administration (EIA), over 48% of American households rely on natural gas for heating. It’s particularly popular in the Midwest and Northeast due to its availability and relatively low cost.

• Cost: Natural gas prices fluctuate based on market conditions but are generally considered affordable compared to other heating fuels. As of late 2023, the average residential price of natural gas was around $11 per thousand cubic feet.
• Efficiency: Natural gas furnaces are highly efficient, with modern systems reaching up to 98% efficiency (AFUE).
• Environmental Impact: While natural gas burns cleaner than oil or coal, it’s still a fossil fuel, contributing to carbon emissions. However, it releases less carbon dioxide than heating oil or propane.

For homes using natural gas, a gas furnace is typically the go-to solution. These systems are known for delivering fast, efficient heat, especially in colder regions. You can explore various gas heaters for homes here.

2. Electricity

Electric heating is the second most common source, used by about 38% of U.S. households, particularly in the South, where winters are milder and electric heat pumps are more efficient.

• Cost: Electricity tends to be more expensive than natural gas on a per-BTU basis. However, in areas with mild climates, electric heat pumps can provide both heating and cooling, making them a cost-effective choice year-round.
• Efficiency: Electric heating systems, particularly heat pumps, can be incredibly efficient. Heat pumps can achieve a COP (Coefficient of Performance) of 3 or higher, meaning they produce three units of heat for every unit of electricity consumed.
• Environmental Impact: The environmental impact of electric heating depends on the local energy grid. In areas where electricity is generated from renewable sources (like wind or solar), electric heating has a much lower carbon footprint than fossil fuels.

For those interested in exploring the cost for electric furnace systems, check out our options here.

3. Propane

Propane is used by around 5% of households, primarily in rural areas where natural gas pipelines aren’t available. It’s a popular option for homes with propane furnaces, offering reliable heating for off-grid locations.

• Cost: Propane prices fluctuate more than natural gas and electricity. In 2023, residential propane prices averaged around $2.70 per gallon, but this can vary based on location and season.
• Efficiency: Propane furnaces are similar in efficiency to natural gas systems, with many models achieving 90-98% AFUE.
• Environmental Impact: Propane is a cleaner-burning fossil fuel compared to oil but still produces more CO2 than natural gas. However, it’s considered a good option for areas where natural gas isn’t accessible.

If you live in a rural area and need a propane system, we have a variety of propane furnace options that you can explore here.

4. Heating Oil

Once dominant in the Northeast, heating oil now heats about 4% of U.S. households. It’s still used in some older homes but is gradually being phased out in favor of more efficient options like natural gas and heat pumps.

• Cost: Heating oil prices are generally higher than natural gas or propane, averaging around $4 per gallon in 2023.
• Efficiency: Modern oil furnaces can reach up to 90% AFUE, but they still tend to be less efficient than natural gas systems.
• Environmental Impact: Heating oil produces more carbon dioxide than natural gas or propane, making it less environmentally friendly. Some homeowners are switching to alternative fuels due to environmental concerns.

5. Wood and Biomass

In some rural or heavily forested areas, wood stoves and biomass are still used for heating. While not as common as other fuel sources, wood offers a renewable heating option and is often used as a supplementary heat source.

• Cost: Wood is typically the least expensive heating option if you have access to a local supply. Prices vary widely depending on location.
• Efficiency: Modern wood stoves can reach 70-80% efficiency, though older models are less efficient.
• Environmental Impact: While wood is considered a renewable resource, burning it releases particulates and carbon dioxide. However, when sustainably harvested, wood can be carbon-neutral over the long term.

Comparison of Heating Fuels in the U.S.

Visual Key:

• Each ▓ represents approximately 2% of U.S. households.

Notes:

• Efficiency Ratings:
• AFUE (Annual Fuel Utilization Efficiency): Measures furnace efficiency; higher percentages indicate greater efficiency.
• SEER (Seasonal Energy Efficiency Ratio): Measures cooling efficiency for air conditioners and heat pumps.
• COP (Coefficient of Performance): For heat pumps; a COP of 3 means it produces three units of heat for every unit of electricity consumed.

This graphical table provides a visual comparison of the primary heating fuels used across U.S. households, highlighting their usage, costs, efficiencies, and environmental impacts in an easy-to-read format.

Fuel Sources for Home Cooling in the United States

When it comes to cooling homes, electricity dominates the market, powering nearly all air conditioners and heat pumps. Homes in regions with higher summer temperatures, such as the South and Southwest, rely heavily on electric cooling systems.

1. Electricity for Air Conditioning

• Cost: The cost of running an air conditioner depends on electricity rates and the efficiency of the unit. The average U.S. household spends around $300-$500 per year on air conditioning.
• Efficiency: Air conditioning systems are rated by SEER (Seasonal Energy Efficiency Ratio), with modern systems achieving SEER ratings of 16 or higher. Higher SEER-rated systems offer more energy savings in the long run.

Heat pumps, which provide both heating and cooling, have become increasingly popular in areas with moderate climates. They offer a versatile, energy-efficient solution for year-round comfort.

Heating and cooling your home involves careful consideration of several factors, including fuel availability, cost, efficiency, and environmental impact. Whether you’re relying on natural gas, propane, or electricity, the right choice for your home will depend on your location, budget, and energy goals. For many homeowners, natural gas remains the go-to fuel source due to its availability and cost-effectiveness. However, regions without natural gas pipelines often turn to propane, electricity, or even heating oil to meet their heating needs. Each of these fuels offers unique advantages and challenges, so it’s important to weigh them carefully when choosing an HVAC system.

If you’re focused on environmental sustainability, you may want to consider electric heating systems paired with renewable energy sources like solar power, or explore high-efficiency heat pumps that use electricity more effectively. Alternatively, homes in rural areas can still make good use of propane or even wood stoves to meet their heating needs, especially when natural gas isn’t an option.

Remember to take into account the regional trends, as these can have a major influence on fuel costs and availability. And if you’re ever unsure about what type of system best suits your home, consult with an HVAC professional to evaluate your home’s needs based on fuel availability, insulation, and your local climate.

For more detailed information on HVAC systems and fuel options, feel free to explore our wide range of furnaces and heating solutions at AC Direct. Whether you’re in the market for a gas furnace, electric furnace, or propane system, we have options tailored to every home and budget.

Final Thoughts

As fuel costs fluctuate and more homeowners prioritize energy efficiency and sustainability, understanding the options for heating and cooling fuels has never been more important. Whether you rely on natural gas, propane, electricity, or oil, each fuel source has distinct pros and cons that affect your HVAC system’s performance, environmental impact, and long-term operating costs.

By utilizing the data provided and considering the suggested tables and graphs, you’ll have a comprehensive overview of the fuels powering America’s homes—and be better equipped to make smart, informed decisions for your own heating and cooling needs. If you’re in the market for a new furnace or HVAC system, contact us at AC Direct for expert guidance and a wide range of heating and cooling solutions designed to suit every home and budget.