The Cheapest Ways to Heat Your Home: Installation, Operating & Long-Term Cost Comparison

Between planning for the holidays and navigating annual inflation, it can be challenging to budget during the wintertime. By installing the cheapest heating system, Medford and Grants Pass residents can reduce one of the major sources of energy consumption in their homes and save money. 

In fact, the typical American household spends almost half of its energy bills on heating and cooling. To help you lower your monthly bills, we’ve created a guide to the cheapest methods of heating a home. We’ll look at the total cost of ownership, including maintenance costs, upfront installation expenses, energy bills, and more. 

Learn more about affordable heating solutions by reaching out to our heating, ventilation, and air conditioning (HVAC) technicians today. 

What “Cheapest Heating” Really Means

Before we dive into the numbers, we first need to clarify what it means to have the cheapest heating system.

• Upfront Installation Costs: The first cost you’ll pay with any system is the heating installation cost. This includes all of the labor expenses, materials, and equipment costs involved. It’s also important to note that some high-efficiency systems qualify for rebates, so you may be able to defray the cost of certain units. 
• Ongoing Operating Expenses: Once your economical heating method has been installed, you’ll need to pay ongoing energy costs whenever you use the unit. Gas, propane, oil, and electricity are charged at different rates. Additionally, these expenses will vary based on how much you use and how efficient your heater is.
• Maintenance and Lifetime Costs: Finally, we also need to look at the typical maintenance and repair expenses involved. Some units require more repairs and maintenance, which can increase the total cost. 

When calculating replacement costs, it’s essential to consider the unit’s lifespan. A long-lasting unit may be more affordable over the long run, even if it costs more upfront. 

To help you decide on the right unit, our experienced HVAC technicians will review your home size, layout, and insulation. Because of our experience with the local climate, we can also recommend the most affordable option for Rogue Valley.

Comparing Popular Home Heating Systems

To help you decide the right option for your home, we’ve conducted a full heating system cost comparison. We’ll cover each unit type before reviewing all of the information in one table.

Still have questions? Reach out to our team to find out more about heat pumps, furnaces, and other heating options.

High-Efficiency Furnaces

For the best heating efficiency, consider investing in a high-efficiency furnace. These units use less energy, and they are extremely effective at reaching the appropriate temperature. 

A high-efficiency furnace has an Annual Fuel Utilization Efficiency (AFUE) of 90% or higher, which means it converts 90% of energy into heat. Because of this higher AFUE, these units can work less to reach the same temperature. Over time, this means you’ll pay less for repairs and energy bills.

However, high-efficiency furnace models can cost 50% to 100% more than standard models. For many homeowners, this upfront expense may be too high.

Gas Furnaces

Gas furnaces are an incredibly popular option in cold climates because their high capacity allows them to heat homes quickly. In addition to having a high output, gas furnaces are also a source of low-cost home heating because gas tends to be much cheaper than electricity. 

While there are many advantages to gas furnaces, there are also a few drawbacks to consider. If you don’t have an existing gas line, you’ll need to have one installed. These units also require more maintenance. Because they function by burning gas, these furnaces have a higher emissions rate than electric units. 

A gas furnace typically costs around $3,800 to $10,000 to install and will last for 15 to 20 years. In Oregon, the average gas bill is $65 to $85 per month, but that amount also includes other appliances.

Electric Furnaces

When it comes to heating system maintenance, electric furnaces tend to require less maintenance work. Their smaller size and lower capacity mean that they are an effective option for mild climates. 

Typically, electric furnaces involve lower upfront installation costs and an easier installation process. Because these furnaces rely on electricity, no emissions are produced at your home. However, it is possible for emissions to be produced by the electricity generation plant. Once installed, you can generally expect these units to last for around 20 to 30 years. 

Heat Pumps (Air-Source)

When it comes to the cheapest method of heating a home, heat pumps truly stand out. Air-source and ground-source heat pumps are two of the most affordable heating solutions available. While air-source systems absorb and transfer heat from the air, ground-source systems rely on loops that are placed within the ground.

Heat pumps are famous for having low operational costs. They are so energy efficient that the federal government and the state of Oregon offer tax credits and rebates to homeowners who get them installed. The Energy Efficient Home Improvement Credit and Oregon’s Heat Pump Purchase Program are each worth up to $2,000 for heat pumps. By applying for rebates and incentives, you can reduce the high upfront costs associated with heat pumps.

Boilers and Radiant Heating Systems

While most new homes install other types of heating systems, many older homes in Oregon still use boilers and radiant heat. This type of heating option is known for being incredibly energy efficient. 

These units are extremely popular in cold climates and are quiet to operate. Although they are great for reducing your energy consumption, they can be costly to install. Additionally, the piping system necessitates specialized maintenance. 

Geothermal Heat Pumps

Geothermal heat pumps harness the natural heat found in the ground to heat your home. Like air-source heat pumps, they can transfer heat in the opposite direction during the summer, ensuring year-round comfort. 

Geothermal heat pumps are by far the most economical heating method. They require almost no electricity to run. While the indoor components last for 25 years or more, the outdoor components can last for more than 50 years. To enjoy this low-cost heating method, homeowners generally must spend $4,450 to $24,450 in installation costs.

Electric Wall Heaters

Electric wall heaters have an extremely low heating installation cost and are fast to install. However, the upfront cost can vary significantly based on how many units you need. Wall heaters are only intended to heat a single room, so you’ll likely need multiple units. 

These heaters are generally not the most economical heating method to use over the long run. Once installed, they tend to cost more to run than other options on this list.

Quick Comparison Table: Cost, Efficiency, and Lifespan

Whether you want to compare the furnace vs. heat pump cost or the average lifespan of each heating system, we’ve gathered together some of the most important details about each kind of heating system.

Operating Costs: The Real Budget Breaker

When it comes to finding the cheapest heating system, it’s important to review the cost of fuel or energy. Heating energy consumption makes up 42% of the average home’s energy costs. By investing in a unit that has a high AFUE or an excellent SEER2 rating, you can spend less on energy costs. 

The following are some of the typical prices paid for energy in the United States.

• Gas: $26.88 per thousand cubic feet
• Electricity: 17.10¢ per kWh 
• Propane: $2.449 per gallon
• Oil: $3.721 per gallon

Maintenance and Replacement Costs

When it comes to heating system maintenance, we recommend getting a tune-up for all types of heating systems at least once a year. This tune-up should occur in the fall so that your heater is ready for winter. For heat pumps, a second tune-up should occur in the spring to prepare the heat pump for summertime cooling needs. 

By investing in regular tune-ups, you can save a significant amount of money on repairs and replacement costs in the long run. You can also eliminate the cost of getting a tune-up by signing up for our membership plan. Once you are a member, you can access exclusive discounts and complimentary tune-ups.

In terms of longevity, you can expect high-efficiency heat pumps and gas furnaces to last around 15 to 20 years. While electric furnaces last around 20 to 30 years, boilers can go 15 years before needing a replacement. Once your unit’s energy efficiency decreases or you start needing more frequent repairs, it’s time to consider a replacement. 

Total Cost of Ownership Over 10 to 15 Years

In general, you can expect most heating systems to last 10 to 15 years before they start experiencing frequent breakdowns. As the heating system starts to age, it will also lose heating efficiency. Although heat pumps are more expensive upfront, they have the lowest long-term expenses.

Factors That Influence Heating Costs

When conducting a heating system cost comparison, there are multiple factors that influence which system is the cheapest method of heating a home.

• Home Size: Larger homes require a more powerful heating system and a larger capacity. 
• Insulation: Poor insulation allows more heat to escape, necessitating a larger system and higher energy bills.
• Ductwork: Around 20% to 30% of a typical home’s heat is lost through duct leaks.
• Climate: In colder climates, heating systems have to be used more, resulting in higher energy costs, increased wear, and more frequent repairs.
• Rebates: While a high-efficiency system might cost more upfront, rebates and tax credits can potentially lower the overall cost.
• Home Age: An older home may have more air leaks, leading to higher energy costs. 
• Existing Infrastructure: Similarly, the cost of installation will be greatly influenced by whether you have existing ductwork or gas lines.

Smart Ways To Reduce Heating Costs for Any System

Besides choosing affordable heating solutions, you can lower your long-term heating costs by adopting the following tips and tricks.

• Annual Heating Tune-ups: Through routine maintenance, you can improve the energy efficiency of your system and prevent repairs.
• Smart Thermostats and Zoning: These techniques reduce the amount of energy you use while ensuring maximum comfort.
• Air Sealing and Insulation Upgrades: By preventing heat loss, you can reduce the amount of energy your heater uses.
• Replacing Outdated Units: Before a unit fails completely, it will start using higher amounts of energy and need more frequent repairs. Replacing it early can save you money over time.
• Rebates: Through rebates, you can lower the upfront costs of your new system.

Choosing the Best Affordable Option for Your Home

To get the cheapest heating system, homeowners need to calculate the upfront and lifetime costs. Then, you should carefully consider the comfort level, energy efficiency, and maintenance requirements involved with each option. 

Our HVAC technicians can help by calculating the ideal load capacity for your home. We provide free, transparent estimates, so you can quickly see exactly which system makes the most sense for your family’s needs.

Balance Affordability with Efficiency

In many cases, the cheapest heating systems to install aren’t the most affordable heating solutions to operate. When looking at your heating system cost comparison, you need to consider how much maintenance and energy will cost with each option. Additionally, it’s important to include potential rebates and incentives in your calculation.

Call today to learn more about low-cost home heating solutions for your family!