Is a heat pump cheaper than gas in Montana?
West · Very cold (e.g. northern New England, Mountain West, Upper Plains) · EIA residential fuel prices
For a reference 2,000 sq ft home in Montana (assumed seasonal COP 2, 95% gas furnace), a heat pump costs about $1,501/year to run versus about $654/year for natural gas — so a heat pump is about $848/yr more than a gas furnace. It is cheaper than propane ($2,046/yr), cheaper than heating oil ($2,899/yr), and far cheaper than electric resistance ($3,003/yr). The cheapest option here is natural gas furnace (95% afue). These are estimates — verify with an HVAC pro.
Source: EIA Electric Power Monthly, Table 5.6.A (residential). Data as of June 2026.
Montana residential fuel prices
| Fuel | Residential price | Source / period |
|---|---|---|
| Electricity (residential) | 13.48¢/kWh | EIA, March 2026 |
| Natural gas (residential) | $0.817/therm | EIA, March 2026 |
| Heating oil (residential) | $4.491/gal | EIA, Rocky Mountain (PADD 4) |
| Propane (residential) | $2.266/gal | EIA, Rocky Mountain (PADD 4) |
Source: EIA (electricity, natural gas, heating oil & propane). Data as of June 2026.
Montana residential natural gas is $8.47/Mcf (about $0.817/therm), EIA March 2026. Heating oil and propane are EIA residential prices for Rocky Mountain (PADD 4) (Week ending 2026-03-30) — EIA does not publish these per individual state.
Annual heating cost in Montana — every system compared
Reference: a 2,000 sq ft home in a very cold (e.g. northern new england, mountain west, upper plains), roughly 76 MMBTU/year of useful heat. Energy cost only (no equipment, install or maintenance):
| Heating system | Annual energy cost | Annual use |
|---|---|---|
| Natural gas furnace (95% AFUE) | $654/yr | 800 therms |
| Heat pump | $1,501/yr | 11,137 kWh |
| Propane furnace (92% AFUE) | $2,046/yr | 903 gal |
| Heating oil (85% AFUE) | $2,899/yr | 646 gal |
| Electric resistance (baseboard, COP 1.0) | $3,003/yr | 22,274 kWh |
Source: EIA fuel prices + ENERGY STAR energy conversions. Data as of June 2026.
Cheapest to run in this reference case: Natural gas furnace (95% AFUE). Run your own home size, COP and prices.
Heat pump vs each fuel in Montana
| Comparison | Heat pump | Other system | Heat-pump result |
|---|---|---|---|
| vs natural gas (95% AFUE) | $1,501 | $654 | $848/yr more |
| vs propane (92% AFUE) | $1,501 | $2,046 | Saves $545/yr |
| vs heating oil (85% AFUE) | $1,501 | $2,899 | Saves $1,398/yr |
| vs electric resistance (COP 1.0) | $1,501 | $3,003 | Saves $1,501/yr |
How Montana compares with similar states
The five states with the closest electricity price to Montana, and how heat-pump-vs-gas savings look there:
| State | Electricity ¢/kWh | Heat-pump vs gas (ref. home) |
|---|---|---|
| Montana (this state) | 13.48¢ | $848/yr more |
| Missouri | 13.44¢ | Saves $69/yr |
| Iowa | 13.42¢ | $236/yr more |
| Oklahoma | 13.56¢ | Saves $83/yr |
| Wyoming | 13.59¢ | $677/yr more |
| Arkansas | 13.63¢ | Saves $384/yr |
Frequently asked questions
Is a heat pump cheaper to run than gas in Montana?
Not in this reference case. For a 2,000 sq ft home in Montana (assumed seasonal COP 2, 95% gas furnace), a heat pump costs about $1,501/year vs about $654/year for gas, because Montana has relatively cheap natural gas. A heat pump is still typically cheaper than propane, oil and electric resistance here.
What does it cost to heat a home in Montana?
Using EIA March 2026 prices and a 2,000 sq ft home in a very cold (e.g. northern new england, mountain west, upper plains) (about 76 MMBTU/yr), estimated annual energy cost is about: heat pump $1,501, natural gas $654, propane $2,046, heating oil $2,899, electric resistance $3,003. The cheapest here is natural gas furnace (95% afue).
Is a heat pump cheaper than propane or heating oil in Montana?
In this reference case, vs propane a heat pump saves about $545/year, and vs heating oil it saves about $1,398/year. Heat pumps usually beat both delivered fuels comfortably because they deliver far more heat per unit of energy.
How does Montana rank for heat-pump savings?
On heat-pump savings vs a gas furnace (reference 2,000 sq ft home), Montana ranks #43 of 51 states (1 = saves the most). This reflects Montana's mix of 13.48¢/kWh electricity and $0.817/therm gas.
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Sources & accuracy
Electricity: EIA Electric Power Monthly, Table 5.6.A (residential) (March 2026); natural gas: EIA residential price (March 2026); heating oil & propane: EIA Heating Oil and Propane Update (Rocky Mountain (PADD 4), Week ending 2026-03-30); energy constants: ENERGY STAR Thermal Energy Conversions. All U.S. public domain. These are statewide/regional averages and the comparison is an estimate, not a quote or engineering analysis. Actual savings depend on your home, climate, equipment and rates. Verify with an HVAC professional. See methodology and disclaimer.
Last updated: 2026-06-29