Propane vs. Heat Pump in Maine: A Comparison for LP Users

Most comparison guides focus on oil vs. heat pump. If you heat with propane (LP) in Maine, the comparison is actually more favorable toward heat pumps, but nobody writes about it. This is the guide for you.

Why Propane Users See a Bigger Difference

Propane has about 66% of the energy per gallon compared to heating oil (91,500 BTU vs. 138,500 BTU). That means you need more gallons to produce the same amount of heat, which often makes propane more expensive per BTU than oil, even though the per-gallon price looks lower.

That wider gap is what makes the heat pump comparison more compelling for LP users than it is for oil users.

What the Numbers Look Like

Fuel prices change weekly, and propane prices vary significantly by supplier, delivery distance, and contract terms. Any fixed numbers we publish here would be stale within a month.

Our heating cost comparison calculator uses real, weekly-updated fuel prices from the Maine Governor's Energy Office for the Greater Portland region. It includes propane, oil, natural gas, heat pumps, and electric baseboard so you can compare them side by side.

Compare propane vs. heat pump costs with today's prices

Here's what we can say about the general picture: a typical 2,000-square-foot home in Maine using propane consumes 800 to 1,200 gallons per year. That's a significant annual fuel cost, and it's subject to the same volatility as oil - tied to regional supply, weather, and natural gas markets.

Heat pump operating costs depend on electricity rates, which the Maine PUC sets once per year. The predictability alone is worth something when you're budgeting.

Beyond the Cost Comparison

Cost is the question most propane users start with, but it's rarely the only factor in the decision:

Heating and cooling in one system. A heat pump heats your home in winter and cools it in summer. No separate AC needed. For rural Maine homes without central air, this changes daily life in July and August.

No more deliveries. Propane delivery in rural areas can be expensive and unreliable in bad weather. Electricity is already at your house. No more worrying about running out mid-storm.

Tank rental goes away. Many propane customers pay $50-$150/year to rent the tank. That cost disappears with a heat pump.

Price predictability. Propane prices are set by regional distributors with limited competition in rural areas. You may have one or two delivery companies to choose from, and switching isn't always straightforward. Electricity rates are PUC-regulated and change once a year.

Solar offset potential. You can't generate your own propane, but you can generate your own electricity. In rural areas with clear sightlines, the combination of heat pump plus solar is one of the most cost-effective paths to near-zero heating costs.

Equipment Costs

A whole-home cold-climate heat pump system for a 2,000-square-foot home typically runs $14,000 to $20,000 before incentives. After Efficiency Maine rebates ($1,000 to $3,000 per outdoor unit for any income level), the net cost comes down to $11,000 to $17,000. Moderate-income and low-income households qualify for larger rebates ($2,000 or $3,000 per unit). There's also a 30% federal tax credit available through 2032.

The upfront cost is real, but you're getting a system that heats, cools, runs on a fuel you can budget around, and eliminates tank rental and delivery logistics.

See what the equipment and operating costs look like for your situation

What Happens to My Propane System?

To qualify for Efficiency Maine rebates, your heat pump system must be sized to handle 100% of your home's peak heating load. That means the heat pump is your primary heating system, designed to carry the full winter on its own. Your existing propane system can remain in place as emergency backup, but the heat pump isn't a supplement to it.

Most customers who make this switch see their propane consumption drop dramatically. If your tank is rented, you may eventually choose to return it and go heat-pump-only.

What About a High-Efficiency Propane Boiler?

At Horizon Homes, we install high-efficiency wall-hung condensing boilers (both natural gas and propane). These are excellent systems with 95%+ efficiency compared to an older unit's 80-85%. If you're replacing a propane boiler and don't want to go all-in on heat pumps, a high-efficiency condensing boiler is a meaningful upgrade that reduces fuel consumption by 15-20%.

But even a 95% efficient propane boiler can't match the efficiency of a heat pump running at 200-300%. A heat pump moves heat rather than creating it, which is why each unit of electricity delivers two to three units of heat. The high-efficiency boiler is a good option if your situation calls for it, but for most propane users, the heat pump is the better long-term investment.

The Insulation Factor

This is true for any fuel comparison, but it's worth stating: the condition of your home's insulation changes the equation. A well-insulated, air-sealed home needs a smaller heat pump system, runs it less often, and uses less electricity.

At Horizon Homes, we take a whole-home approach: insulate and air seal first, then right-size the heat pump. It costs less upfront and performs better over time. A heat pump on a leaky house is working harder than it needs to.

Frequently Asked Questions

Is it worth switching from propane to a heat pump?

For most propane users, yes. Propane's lower energy density means you burn more gallons for the same heat, which makes the operating cost gap with heat pumps wider than it is for oil. Run the numbers with today's propane prices to see the comparison for a home like yours.

Can a heat pump replace propane heat in a cold climate?

Yes. To qualify for Efficiency Maine rebates, the heat pump must be sized for 100% of your peak heating load. It's designed to handle the full winter on its own. Cold-climate models like Mitsubishi Hyper-Heat operate reliably down to -22°F.

What happens to my propane system?

It can stay as emergency backup. Most customers who switch see their propane consumption drop dramatically. If your tank is rented, you may eventually choose to return it.

Is propane or electricity cheaper for heating?

At current rates, electricity via heat pump is generally cheaper per BTU delivered. A heat pump's 200-300% efficiency means each kWh goes 2-3x further than propane's combustion efficiency. But the exact difference depends on current fuel prices. Check the comparison with this week's prices.

See the Numbers for Your Home

Start with our heating cost comparison calculator to see how propane stacks up against heat pumps at today's fuel prices. When you're ready for numbers specific to your house, a free energy assessment covers your insulation, your current system, and all available rebates.

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