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Propane at $3.58 per gallon is the most expensive common heating fuel in Rhode Island, and it's especially prevalent in rural areas. Switching to a heat pump saves the average RI household about $1,480 per year -- even more than switching from oil.
Propane is widely used in rural Rhode Island communities where natural gas pipelines don't reach. Towns like Exeter, Richmond, Hopkinton, West Greenwich, and Foster have high concentrations of propane-heated homes. At $3.58 per gallon, propane is the most expensive mainstream heating fuel in the state.
Propane prices are notoriously volatile, spiking during cold snaps when demand surges. During the 2023-2024 winter, some RI homeowners paid over $4.50/gal for emergency deliveries. This price unpredictability makes budgeting for propane heating especially difficult.
Modern cold-climate heat pumps achieve a seasonal average COP of 3.0, delivering 3 units of heat for every 1 unit of electricity. At RI Energy's standard residential rate of $0.28/kWh, heat pump heating is dramatically cheaper than propane -- and the electricity rate is far more stable and predictable.
Electricity vs Propane Stability: RI Energy electricity rates change through regulated rate proceedings, typically adjusting 2-4% per year. Propane prices can swing 40-60% in a single season based on global markets and weather. Switching to electric heating provides much greater cost predictability.
Propane-heated homes see the highest savings of any fuel type when switching to heat pumps. The $1,480 annual savings is $70 more than switching from oil and over $500 more than switching from natural gas. This makes propane homes the single best candidates for heat pump conversion in Rhode Island.
Enter your current propane usage to see a personalized comparison with heat pump heating costs based on Rhode Island energy rates.
Current price: $3.45 $/gallon
Note: Rhode Island does not have a special heat pump electric rate. Calculations use the standard RI Energy residential rate (~$0.28/kWh).
Based on RI fuel prices as of February 2026 (oil $3.45/gal, propane $3.58/gal, gas $1.80/therm). Heat pump assumes COP 3.0 (cold-climate average). Electric rate based on RI Energy at $0.28/kWh. Actual savings depend on home size, insulation, and usage patterns.
Beyond the raw cost per gallon, propane heating creates logistical challenges that electricity-powered heat pumps completely eliminate.
Converting from propane to a heat pump is a straightforward process. Because propane furnaces are typically forced-air systems with existing ductwork, the transition can be especially smooth if you opt for a ducted heat pump.
A certified installer evaluates your home, measures the heating load, and checks your existing ductwork. Many propane homes have ductwork that can be reused, simplifying the conversion.
Your installer submits the rebate application to Clean Heat RI. Pre-approval typically takes 2-3 weeks. The rebate is applied at point of purchase, so you only pay your share upfront.
The heat pump is installed. Ducted systems that reuse existing ductwork are often completed in 1-2 days. Ductless mini-split installations typically take one day. Your propane system can remain in place as backup.
If you lease your propane tank, contact your propane company to schedule pickup. If you own the tank, a contractor can remove it. Above-ground propane tanks are simpler to remove than underground oil tanks.
Clean Heat RI provides substantial rebates for switching from propane to heat pumps, funded by ARPA dollars. These rebates are applied at the point of purchase, reducing your upfront cost immediately. The ARPA funding deadline is December 31, 2026.
Important: The federal Section 25C energy efficiency tax credit expired on December 31, 2025 and is no longer available. Clean Heat RI rebates are now the primary financial incentive for heat pump conversions. HEAR rebates (up to $8,000 for income-qualified households) may also be available and can potentially stack with Clean Heat RI.
Among all fuel types, propane-heated homes have the strongest financial case for heat pump conversion. Several factors make propane homes particularly well-suited for the switch.
At $3.58/gal, propane costs more per unit of heat than oil ($3.45/gal), natural gas ($1.80/therm), or electricity via heat pump ($0.093/kWh effective). This means the savings from switching are the largest for propane homes.
Many propane-heated homes in rural RI lack central air conditioning. A heat pump provides both heating and cooling, eliminating the need for window units and significantly improving summer comfort.
Propane furnaces are typically forced-air systems with ductwork already in place. A ducted heat pump can connect to this existing ductwork, reducing installation complexity and cost compared to starting from scratch.
Unlike underground oil tanks that require environmental testing, propane tanks (typically above-ground) are simple to remove. Leased tanks are picked up by the propane company at no charge.
Switching from propane to electric heating means you're no longer dependent on fuel deliveries. Pair a heat pump with rooftop solar and a battery, and you can achieve true energy independence -- particularly valuable in rural areas.
This projection assumes 4% annual propane price inflation (conservative given historical volatility), 2% electricity rate increases, and accounts for standard Clean Heat RI rebates covering 60% of installation costs.
| Year | Propane Cost | Heat Pump Cost | Annual Savings | Cumulative Savings |
|---|---|---|---|---|
| 1 | $2,720 | $1,240 | $1,480 | $1,480 |
| 2 | $2,829 | $1,265 | $1,564 | $3,044 |
| 3 | $2,942 | $1,290 | $1,652 | $4,696 |
| 4 | $3,060 | $1,316 | $1,744 | $6,440 |
| 5 | $3,182 | $1,342 | $1,840 | $8,280 |
| 6 | $3,309 | $1,369 | $1,940 | $10,220 |
| 7 | $3,441 | $1,396 | $2,045 | $12,265 |
| 8 | $3,579 | $1,424 | $2,155 | $14,420 |
| 9 | $3,722 | $1,453 | $2,269 | $16,689 |
| 10 | $3,871 | $1,482 | $2,389 | $19,078 |
Over 10 years, a heat pump saves approximately $19,000 compared to continued propane heating. Because propane prices tend to be more volatile than oil, actual savings could be significantly higher in years with price spikes.
Propane homes save the most when switching to heat pumps. Clean Heat RI covers up to 60% of costs. ARPA funding expires December 31, 2026. Get your free assessment today.
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