Is a heat pump cheaper than gas in South Dakota?
Midwest · Very cold (e.g. northern New England, Mountain West, Upper Plains) · EIA residential fuel prices
For a reference 2,000 sq ft home in South Dakota (assumed seasonal COP 2, 95% gas furnace), a heat pump costs about $1,592/year to run versus about $1,254/year for natural gas — so a heat pump is about $338/yr more than a gas furnace. It is cheaper than propane ($1,972/yr), cheaper than heating oil ($2,899/yr), and far cheaper than electric resistance ($3,183/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.
South Dakota residential fuel prices
| Fuel | Residential price | Source / period |
|---|---|---|
| Electricity (residential) | 14.29¢/kWh | EIA, March 2026 |
| Natural gas (residential) | $1.567/therm (US avg) | EIA, March 2026 |
| Heating oil (residential) | $4.491/gal | EIA, Midwest (PADD 2) |
| Propane (residential) | $2.184/gal | EIA, Midwest (PADD 2) |
Source: EIA (electricity, natural gas, heating oil & propane). Data as of June 2026.
EIA did not publish a March 2026 residential natural-gas price for South Dakota; the U.S. average of $16.25/Mcf is used and flagged. Heating oil and propane are EIA residential prices for Midwest (PADD 2) (Week ending 2026-03-30) — EIA does not publish these per individual state.
Annual heating cost in South Dakota — 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) | $1,254/yr | 800 therms |
| Heat pump | $1,592/yr | 11,137 kWh |
| Propane furnace (92% AFUE) | $1,972/yr | 903 gal |
| Heating oil (85% AFUE) | $2,899/yr | 646 gal |
| Electric resistance (baseboard, COP 1.0) | $3,183/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 South Dakota
| Comparison | Heat pump | Other system | Heat-pump result |
|---|---|---|---|
| vs natural gas (95% AFUE) | $1,592 | $1,254 | $338/yr more |
| vs propane (92% AFUE) | $1,592 | $1,972 | Saves $380/yr |
| vs heating oil (85% AFUE) | $1,592 | $2,899 | Saves $1,308/yr |
| vs electric resistance (COP 1.0) | $1,592 | $3,183 | Saves $1,592/yr |
How South Dakota compares with similar states
The five states with the closest electricity price to South Dakota, and how heat-pump-vs-gas savings look there:
| State | Electricity ¢/kWh | Heat-pump vs gas (ref. home) |
|---|---|---|
| South Dakota (this state) | 14.29¢ | $338/yr more |
| Washington | 14.40¢ | Saves $51/yr |
| Nevada | 14.17¢ | $45/yr more |
| Louisiana | 14.16¢ | Saves $56/yr |
| New Mexico | 14.81¢ | $24/yr more |
| Florida | 14.86¢ | Saves $46/yr |
Frequently asked questions
Is a heat pump cheaper to run than gas in South Dakota?
Not in this reference case. For a 2,000 sq ft home in South Dakota (assumed seasonal COP 2, 95% gas furnace), a heat pump costs about $1,592/year vs about $1,254/year for gas, because South Dakota 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 South Dakota?
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 $1,592, natural gas $1,254, propane $1,972, heating oil $2,899, electric resistance $3,183. The cheapest here is natural gas furnace (95% afue).
Is a heat pump cheaper than propane or heating oil in South Dakota?
In this reference case, vs propane a heat pump saves about $380/year, and vs heating oil it saves about $1,308/year. Heat pumps usually beat both delivered fuels comfortably because they deliver far more heat per unit of energy.
How does South Dakota rank for heat-pump savings?
On heat-pump savings vs a gas furnace (reference 2,000 sq ft home), South Dakota ranks #31 of 51 states (1 = saves the most). This reflects South Dakota's mix of 14.29¢/kWh electricity and US-average gas.
Keep exploring
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 (Midwest (PADD 2), 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