How much does it cost to heat a Minnesota home with propane?
Your cost is your price per gallon times the gallons you burn: a 96% furnace uses about 11.4 gallons per million BTU of heat delivered, an 80% furnace about 13.7. Add up a full season of delivery tickets for your real total; a heat pump paired with the furnace cuts it most.
Key points
- Price your heat per million BTU delivered, not per month: price per gallon times about 11.4 gallons on a 96% furnace.
- Going from an 80% to a 96% propane furnace cuts gallons by about a sixth for the same heat.
- Pairing a heat pump with the propane furnace (dual fuel) is the biggest lever most rural homes have.
- How you buy matters too: summer fills, contracts and owning the tank can all change your price per gallon.
- Never let the tank run low in a cold snap. Low fill plus deep cold means weak gas pressure and a truck that's days behind.
What propane heat costs you comes down to two numbers: the gallons your house burns in a season and what you pay per gallon. To compare it fairly with anything else, work out the cost per million BTU of heat delivered. A 96% propane furnace needs about 11.4 gallons for that and an 80% furnace about 13.7, so multiply your price per gallon by the figure for your furnace. Your delivery tickets supply the rest.
Outside the gas mains, plenty of homes heat with propane: farms, hobby acreages and lake lots in Wright, Carver, McLeod and Scott counties, the rural edges of Anoka County, and the countryside across the river in Western Wisconsin. Propane heat works well. It's also the fuel where equipment choices and buying habits change the bill the most, because every gallon is expensive enough to notice.
How do you figure out what propane heating really costs you?
Monthly figures mislead with propane because deliveries don't line up with months. A fill in late November might cover most of December. Instead, add up every delivery from one fall to the next spring: total gallons and total dollars. Divide dollars by gallons and you have your true average price per gallon for the season.
Two things to know when you read those tickets:
- Tanks are filled to about 80%, not to the brim, to leave room for the liquid to expand. A 500-gallon tank holds about 400 gallons of usable fill.
- The gauge reads percent, not gallons. A 1,000-gallon tank at 30% has about 300 gallons left.
If you have a propane water heater, dryer or range on the same tank, their use is in there too. Summer deliveries (if any) give you a rough idea of how much of the total they take.
How do you compare propane with other heating fuels?
To compare fuels and furnaces fairly, work out what it costs to put a million BTU of heat into the house. Per the U.S. Energy Information Administration, a gallon of propane holds about 91,500 BTU, a therm of natural gas is 100,000 BTU, and a kilowatt-hour of electricity is 3,412 BTU.
| Heat source | Fuel you buy per million BTU delivered |
|---|---|
| Propane furnace, 80% AFUE | about 13.7 gallons |
| Propane furnace, 90% AFUE | about 12.1 gallons |
| Propane furnace, 96% AFUE | about 11.4 gallons |
| Electric resistance (baseboard, electric furnace) | about 293 kWh |
| Heat pump running at a COP of 2 | about 147 kWh |
| Heat pump running at a COP of 3 | about 98 kWh |
Multiply the fuel amount by your price per gallon or per kWh and you have a fair, apples-to-apples cost. COP is how many units of heat a heat pump delivers per unit of electricity. It falls as the outdoor temperature drops, which is why the cold-climate heat pump list published by NEEP shows each model's rated performance at 5°F as well as at milder temperatures.
Where the gallons go
The furnace itself. An 80% propane furnace burns about 20% more gallons than a 96% furnace for the same heat. On propane that gap is money every single delivery. If your furnace is old and on a metal flue, the AFUE explainer shows how to size up the savings, and the venting work that comes with a condensing furnace.
Ducts in cold spaces. Supply ducts running through an unheated crawlspace, garage or attic lose heat before it reaches a room. Sealing and insulating them is often cheaper than any equipment change. Our post on duct sealing covers the symptoms.
Oversizing. A furnace far bigger than the house needs short-cycles, runs less efficiently and leaves rooms uneven. Rural homes often get oversized equipment because nobody ran a load calculation. We size every replacement with a Manual J.
The house. Attic insulation and air sealing cut the load for every heat source you'll ever own. Do them before or along with a furnace change, not after.
What cutting gallons costs
| Change | Price | What it does |
|---|---|---|
| 96–98% propane furnace, installed | roughly $6,500–$9,500 (our range) | About a sixth fewer gallons than an 80% furnace for the same heat |
| Heat pump added for dual fuel | $7,500–$14,500 installed (our range) | Carries the milder days on electricity |
| Duct sealing | $1,000–$6,000, typical national range per HomeGuide | Keeps heat from leaking out in unheated spaces |
| Furnace tune-up | $129 (our price) | Checks the burner, venting and safeties before winter |
A new furnace running on propane needs the manufacturer's LP conversion kit fitted and checked at install, and that belongs in the written price. Our prices don't change by town, so a furnace replacement in Corcoran or out past Ham Lake costs the same as one in the city. Our guides to furnace replacement cost and heat pump installation cost cover what moves each number.
How can you pay less per gallon for propane?
Price per gallon varies more with how you buy than most people think:
- Summer fills and pre-buy contracts can lock in a price before heating season demand. Read the terms on what happens if you don't use it all.
- Owning versus leasing the tank. A leased tank usually means only that supplier can fill it. Owning your tank lets you shop.
- Automatic delivery or a set refill point keeps you from running low. Deep cold is exactly when trucks fall behind.
If heating bills are a real hardship, Minnesota's Energy Assistance Program, run through the Department of Commerce, helps eligible households with heating costs, including propane.
What happens to a propane tank in a Minnesota cold snap?
In a Minnesota cold snap, propane trouble usually shows up as a furnace that locks out or burns weakly rather than a broken part. Propane leaves the tank as a vapor, and the colder the liquid and the lower the fill, the slower the tank can make vapor. At low fill and deep cold, gas pressure to the furnace can sag right when the house needs the most heat, and delivery trucks are behind at the same time.
- Stay above your supplier's refill point from December through February, or sign up for automatic delivery.
- Keep a path open. The driver has to reach the tank and the fill valve, so keep plow piles off the tank and the route clear.
- Keep the regulator clear. Snow and ice on the regulator and its vent can affect gas pressure. Brush it off gently; don't chip at it.
- Mark the tank with a tall stake or flag so plows and snowblowers don't hit it.
| Symptom | Likely cause | Fix | Who |
|---|---|---|---|
| Furnace locks out in deep cold, other propane appliances weak | Low tank or low vapor pressure | Check the gauge and call for a delivery | You and your supplier |
| Every propane appliance out | The tank ran empty | Delivery, leak check, then relight | Your supplier, then a technician if the furnace won't restart |
| Yellow, lazy flames or soot at the furnace | A burner or LP setup problem | Shut the furnace off and call | Technician |
| Furnace runs nonstop, house barely warm | Dirty filter, leaky ducts or a failing or undersized furnace | Change the filter, then call | You, then a technician |
What's the biggest way to cut propane use?
For most propane homes, the largest cut in gallons comes from a dual-fuel system: an air-source heat pump paired with the propane furnace. The heat pump heats the house on the many milder days of a Minnesota winter, and the furnace takes over below a switchover temperature you and the installer choose, based on your propane and electric prices. It also replaces your central air.
Rural electric co-ops often reward this. Connexus Energy runs a reduced-rate heat pump program for dual-fuel homes, and Dakota Electric offers a dual-fuel program and heat pump rebates. Ask your co-op (Wright-Hennepin, Minnesota Valley, Connexus or another, depending on your address) what it offers, and whether a rebate needs a utility-registered contractor. Our dual-fuel guide explains how the switchover works, and switching from propane to a heat pump covers going further.
What to do next
Pull last season's delivery tickets, work out your cost per million BTU, and compare it against the table. If your furnace is old, oversized or running rough, have it checked before the heating season. Our $79 trip charge is waived when you approve the repair, and for a propane furnace replacement you'll get a written price that includes the LP conversion. Call 612-429-3465, open 7 days, 7am–9pm.
Questions
Is propane more expensive than natural gas?
Usually, per unit of heat. A gallon of propane holds about 91,500 BTU and a therm of natural gas is 100,000 BTU, so a gallon is a little less than a therm's worth of heat. Compare your price per gallon divided by 0.915 against your all-in cost per therm from a gas bill, if you have gas nearby, and you have the real difference.
Do I need a different furnace for propane?
Most gas furnaces ship set up for natural gas and are converted to propane on site with the manufacturer's LP conversion kit, which changes the burner orifices and the gas valve's pressure setting. It has to be done and checked at install. A furnace running on propane without the conversion is a safety problem, not an efficiency one.
What happens if my propane tank runs out?
Every propane appliance goes out, and the system has to be checked before it's relit. Many suppliers do a leak check before they'll turn the gas back on after a run-out, which can add time and a fee. In a Minnesota cold snap that can mean a cold house for a while. Automatic delivery or a set refill point is cheap insurance.
Can a heat pump really cut my propane bill in Minnesota?
Yes, for a large share of the season. In a dual-fuel setup the heat pump carries the milder days, which make up much of a Minnesota winter, and the propane furnace takes over in the deep cold. How much you save depends on your electric rate, your propane price and the heat pump's efficiency, which you can compare per million BTU.
Sources
- HomeGuide cost guides (2026 editions) homeguide.com
- NEEP Cold Climate Air Source Heat Pump List ashp.neep.org