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Propane costs $3.62/gallon in NH as of February 2026. See how a cold-climate heat pump can cut your heating bill by 60% or more.
The average New Hampshire homeowner using propane for heating spends about $2,715/year (750 gallons at $3.62/gal). Switching to a cold-climate heat pump reduces that to roughly $1,050/year at current NH electricity rates ($0.25/kWh, COP 3.0). That is ~$1,665 in annual savings, or about $139/month. Over 10 years, you save approximately $16,650 on heating alone.
Unlike southern New England where natural gas pipelines serve most neighborhoods, New Hampshire has limited natural gas infrastructure. Only parts of the southern tier near Nashua, Manchester, and Concord have gas service. The rest of the state, including most of the Lakes Region, Upper Valley, White Mountains, and Monadnock Region, relies on delivered fuels.
Based on NH propane at $3.62/gallon, electricity at $0.25/kWh, and a cold-climate heat pump with COP 3.0 (February 2026 prices).
| Home Size | Propane Usage | Propane Cost/yr | Heat Pump Cost/yr | Annual Savings |
|---|---|---|---|---|
| Small (1,200 sq ft) | 500 gal | $1,810 | $750 | $1,060 |
| Medium (2,000 sq ft) | 750 gal | $2,715 | $1,050 | $1,665 |
| Large (3,000 sq ft) | 1,100 gal | $3,982 | $1,550 | $2,432 |
500 gallons/year
750 gallons/year
1,100 gallons/year
Propane furnace assumed at 85% AFUE. Heat pump COP 3.0 is the seasonal average for cold-climate models in NH. Your actual savings depend on home insulation, thermostat settings, and local electricity rates.
Enter your current propane usage to see personalized savings estimates. You can also compare against oil, natural gas, or electric baseboard.
Current price: $3.69 $/gallon
Note: New Hampshire does not have a special heat pump electric rate like Massachusetts. All calculations use the standard NH residential rate of ~$0.25/kWh.
Based on NH fuel prices as of February 2026 (oil $3.69/gal, propane $3.62/gal, electric $0.25/kWh). Heat pump assumes COP 3.0 (cold-climate average). Actual savings depend on home size, insulation, and usage patterns.
One of the biggest questions NH homeowners have when switching from propane is what to do with their tank. The answer depends on whether you own or lease it.
You have full control. Many homeowners keep their tank for the first winter while building confidence in the heat pump.
Review your lease terms before scheduling heat pump installation. Some contracts require 30 to 90 days notice.
One of the strongest arguments for switching to a heat pump is price stability. Propane prices are tied to global commodity markets, crude oil prices, and weather-driven demand spikes. Electricity rates change slowly and predictably.
Sources: NH Office of Strategic Initiatives, EIA State Heating Fuel Price Survey. Prices shown are winter averages.
Not ready to go all-in? A dual-fuel or hybrid setup lets you install a heat pump as your primary system while keeping your propane furnace as backup for the coldest nights.
Heat pump handles 95%+ of heating hours
From fall through early spring, the heat pump is your primary heating system. It covers everything above roughly -10 degrees F.
Propane kicks in only during extreme cold
A switchover thermostat automatically engages the propane furnace during the coldest hours. In most NH locations, this happens fewer than 100 hours per year.
Propane usage drops to 75-100 gallons/year
Instead of 750 gallons, you might use 75 to 100 gallons for those extreme cold hours. That is under $400/year in propane plus your heat pump electricity.
Still saves $1,200+ per year
Even with some propane use, dual-fuel systems save significantly compared to propane-only heating. And you gain air conditioning in summer.
Recommended for: Homeowners with a propane furnace under 10 years old, homes in the White Mountains or North Country with extended below-zero periods, or anyone who wants extra peace of mind during their first heat pump winter.
$250 per ton of heat pump capacity, up to $1,250 for standard-income homeowners. Available through Eversource, Liberty, Unitil, and NHEC. Must use a registered NHSaves contractor.
Typical rebate: $750 to $1,250
Up to $8,000 for income-qualified households (under 80% area median income) or up to $4,000 for moderate-income households (80-150% AMI). HEAR rebates are funded until 2031 or until funds are exhausted.
Potential rebate: $4,000 to $8,000 (income-dependent)
The Section 25C energy efficiency tax credit (formerly up to $2,000 for heat pumps) expired on December 31, 2025. It is no longer available for any installations in 2026 or beyond.
For a $15,000 whole-home heat pump installation, net cost could be as low as $5,750 for income-qualified homeowners once HEAR launches in NH.
The average NH homeowner using 750 gallons of propane per year at $3.62/gallon spends about $2,715 annually on heating. A cold-climate heat pump heating the same home at $0.25/kWh with a COP of 3.0 costs approximately $1,050/year. That is roughly $1,665 in annual savings, or about $139/month.
Yes. Cold-climate heat pumps from manufacturers like Mitsubishi (Hyper-Heat), Daikin, and Bosch operate efficiently down to -13 to -15 degrees Fahrenheit. The DOE conducted cold-climate heat pump field testing in New Hampshire specifically. Modern inverter-driven compressors maintain 60 to 80 percent of rated capacity at 5 degrees Fahrenheit.
If you own your propane tank, you can sell it, repurpose it for a generator or backup system, or have it professionally decommissioned and removed. If you lease your tank from a propane company, you must contact them to arrange pickup. Leased tanks cannot be abandoned. Most propane companies will remove a leased tank at no charge but may require remaining contract fulfillment.
Many NH homeowners choose a dual-fuel or hybrid approach for their first winter with a heat pump. The heat pump handles 95 percent or more of heating hours, while the propane furnace kicks in only during extreme cold snaps below negative 10 to negative 15 degrees Fahrenheit. Over time, most homeowners find the backup is rarely needed and eventually decommission the propane system.
NHSaves offers $250 per ton of heat pump capacity, up to $1,250 for standard-income homeowners. HEAR federal rebates, when they launch in NH, may provide up to $8,000 for income-qualified households. The federal Section 25C tax credit expired on December 31, 2025, and is no longer available. NHSaves rebates are currently the primary incentive.
A whole-home cold-climate heat pump system in NH typically costs $12,000 to $18,000 installed before rebates. After NHSaves rebates of up to $1,250, net cost ranges from $10,750 to $16,750. A single-zone ductless mini-split for supplemental heating starts at $3,500 to $5,500 installed. With annual propane savings of $1,665, a whole-home system pays for itself in 6 to 10 years.
No. While propane and electricity cost different amounts per unit, the comparison that matters is cost per BTU of delivered heat. A heat pump with a COP of 3.0 delivers 3 units of heat for every 1 unit of electricity consumed. At $0.25/kWh, a heat pump delivers heat for roughly $0.024 per thousand BTU. Propane at $3.62/gallon with 85 percent furnace efficiency delivers heat at roughly $0.047 per thousand BTU, nearly double the cost.
Yes. If you have existing ductwork from a propane furnace, a ducted heat pump like the Bosch IDS 2.0 or Carrier Greenspeed can use those same ducts. If your ductwork is in poor condition or you have baseboard heat, ductless mini-splits are an excellent alternative. Many NH homes without ductwork find ductless systems easier and less expensive to install than adding new ductwork.
$250/ton standard, $1,250/ton enhanced
Full cost breakdown by system type
Performance data at -15 degrees F
NH is #2 in the nation for oil heat
Northeast-wide conversion guide
Eversource, Liberty, Unitil, NHEC
Last updated: February 2026. Prices and rebates are subject to change. Contact NuWatt Energy for current pricing specific to your home.
Get a free, no-pressure heat pump assessment from NuWatt Energy. We will evaluate your propane usage, home layout, and insulation to recommend the best system for your NH home.