Learn why the cost to heat your home with propane is going up—and what to do about it.
This winter is shaping up to be another expensive energy season. This forecast holds especially true with propane, which is seeing record-high prices this winter season.
Overall, the average cost of heating a U.S. home is expected to increase by over 17% (1).
Yes, you read that right. As CNN Business recently put it, “No matter how you heat your home, the cost of your heating is likely to soar” (2).
So why are propane prices going up? What can you do about it? Will propane prices go down in 2023? (And what are your best, most efficient heating options for this year and beyond?)
In this guide, you’ll get the answers to these questions.
You’ll learn:
- The price of propane this winter
- If there is an expected propane shortage this winter
- How much does propane cost right now
- How to keep propane prices down
- How to conserve propane heating fuel
- How to lower your propane heating bill by stopping heat escape
- The best way to heat a house without propane
- How to get efficiency upgrades installed for $0 upfront cost
- Important FAQs about heating a home with propane
Let’s get into it. We’ll take a look at what’s driving propane prices and then go through the most effective ways to keep your home’s energy costs down until costs stabilize.
Price of propane—The propane supply situation in 2022–2023
The outlook here isn’t great: It’s expected that propane prices will continue to rise in 2023.
We’re seeing propane costs going up for residential propane users in 2022 and 2023, with an estimated 5% increase expected in the next year.
At first, that may not sound like much—in fact, there has been a slight decrease wholesale propane prices since March 2022—but keep in mind that’s on top of huge price increases in the past two seasons (prices nearly doubled from 2020 to 2021!) (3, 4, 5).
Yikes.
Why do prices continue to go up?
There’s a complex web of causes at play here, but the propane industry attributes the increases mostly to:
- Geopolitical tensions
- Decreased refinery capacity, and
- Lower propane inventories leading into 2023 (6, 7).
Propane prices nearly doubled from 2020 to 2021!
Keep in mind, too, that this rise in propane prices is just one part of a larger trend of higher energy costs in general.
The U.S. Energy Information Administration (EIA) estimates that propane bills and other energy costs are projected to remain high over the next two years (8).
And after that? It’s impossible to predict.
If the past several years have taught us anything, it’s that we should be ready for just about everything.
High energy prices are the reality right now, and no one can guarantee they’ll be lower in the future.
(A good read here: Why is my heating bill so high?)
High energy prices are the reality right now, and no one can guarantee they’ll be lower in the future.
Ultimately, it’s important to be sure your house uses energy as efficiently as possible, so price fluctuations affect your household as little as possible.
There’s another important question here, because if you heat your house with propane, you’ve likely also been following the propane shortages that arose from the upheaval of 2020.
And you know that if there’s anything worse than skyrocketing propane prices, it’s not being able to get propane at all.
Will you be able to get enough propane this winter?
Is there a propane shortage this winter (2022-2023 season)?
Thankfully, no—at least there shouldn’t be (9).
In recent years, the U.S. had to dip into its emergency stockpiles to avoid a shortage—but this year, supply should be enough to meet the demand.
That said, with increased costs, it’s still important for homeowners to know how to make their propane use as efficient as possible.
Speaking of costs, let’s take a look at where propane prices have landed this year.
How much does propane cost right now?
Propane costs depend on where you live, but—at the time of this writing—the average national cost of propane in recent weeks has hovered around $2.67 per gallon according to the U.S. Energy Information Administration (10).
That’s already higher than propane prices were last season, and experts are expecting propane prices to stay at this level (or increase) for the foreseeable future.
What does this mean in concrete terms?
Well, a quick estimate is that if you’re filling up a standard 500-gallon propane tank, you should expect to pay at least $1100 (and probably well over), especially when you factor in taxes and delivery costs.
By the way, if you did the math and were confused, keep in mind that propane tanks are only filled to 80% of their capacity for safety reasons—so a “fill up” of a 500-gallon propane tank is… 400 gallons. (We didn’t make the rules, so don’t shoot the messenger.)
How to keep propane prices down
Okay. We just covered a lot of propane considerations that are out of your control, so let’s cover some of the things you can control.
Here are some strategies to keep your energy costs as low as possible until propane prices stabilize:
- Use price protection
- Get a bigger propane tank
- Shop around if you can
- See if you qualify for any additional discounts
Use price protection
One great way to take charge of propane costs is to sign up for price protection through your propane company.
Price protection (also called a pre-buy plan) is a service offered by many propane companies that allows you to guarantee your price for a certain amount of propane.
Basically, you commit to purchasing a certain amount of propane from your provider, and, in return, they’ll commit to charging you no more than the price per gallon you agreed to.
(This means that even if the price of propane goes up during a season, you’ll still pay the same amount per gallon.)
Depending on your propane provider, you might be able to sign up for budget billing, which allows you to make predictable and consistent payments throughout the year instead of dealing with one or two huge bills during propane season.
Either one can make your energy bills more manageable. (Be sure to check the terms and conditions of the specific plan, because each one is a little bit different).
Get a bigger propane tank
If you’re ready to save on your propane bill, investing in a larger propane tank is key for getting bigger bulk discounts.
And because you won’t need as many fill-ups, you won’t pay as many delivery fees. Those savings add up over time.
Another benefit of a bigger tank is that it can really reduce your to-do list. A 500-gallon tank can last up to 5 months, especially if your house keeps the heat inside. (More on that later.)
One delivery per season. Sounds good, right?
Shop around (if you have multiple propane dealers in your area)
If propane prices at one company are excessive, don’t be afraid to shop around.
A lot of propane companies offer competitive pricing and discounts for larger orders—so call your propane dealer and ask them what they can do to save you money.
You might also check out group buying pools in your area—they’re usually called propane co-ops.
If you get together with others in your region to buy propane in bulk, propane dealers may provide better rates than if you go solo. This is especially true if you live in an area with multiple propane dealers (11).
See if you qualify for any additional discounts
There are a number of propane discounts out there for people who meet certain criteria. For example, some propane companies offer senior citizen and military veteran discounts.
You might also be able to take advantage of government rebate programs designed to incentivize propane use.
Check with your state or local propane industry association to see what specific propane discounts you may qualify for.
These are all fantastic strategies, but there’s no getting around the fact that the most effective way to lower propane costs is simply… use less propane.
So here’s how to do that.
How to conserve propane heating fuel
A difficult truth: A lot of the money you’re spending on propane to heat your house is wasted—mostly due to heat escaping the house. (We’ll get to that later.)
How do you mitigate that energy waste and conserve fuel?
In the short-term, one of the simplest and most cost-effective ways is to put on a sweater and turn down the thermostat.
(Better yet: Install a smart thermostat and let it turn down the energy for you!)
How much energy will this strategy save you? It’s hard to say exactly, because each house and situation is different. But, as a general rule of thumb, for each degree you lower the thermostat on your propane-powered furnace, you could cut about 1% of your energy usage (12).
That can be a significant reduction, but let’s be honest: This strategy is easier said than done.
Even if you’re warm-blooded, we’ll bet that not everyone in your house wants to live their lives at 59 degrees Fahrenheit.
So, if turning down the thermostat is a short-term solution, how do you permanently lower your propane usage?
You’ve got one main objective: Stop heat energy from getting out of your house.
To see a full list of some of the best ways to save energy, read How to conserve energy at home.
You could cut energy waste anywhere between 10–45% with air sealing and insulation.
2022 Insulation Industry Opportunity Study
How to lower your propane bill by stopping heat escape:
Before we get to the brass tacks of how to save the most energy, let’s talk about how your heat is escaping your house in the first place.
There are two main culprits:
- Your house is full of air leaks
- Your house has insufficient (or aging) insulation
Your house is full of air leaks
If your house is like most in the U.S., it’s full of tiny holes and gaps—in the foundation, around doors and windows, and in the attic. Those gaps may not look like much on their own, but they let a lot of heat escape.
In fact, if you don’t do something about those tiny holes in the house, it’s basically the same as keeping a window open in your house all year round.
Learn how to find air leaks in your home.
Your house has insufficient (or aging) insulation—especially in your attic
Insulation degrades over time, so if your house hasn’t been insulated in the past 10-15 years, it’s time for an upgrade—especially if you live in a large, old house.
And if your attic is under-insulated (or, worse, not insulated at all), it’s going to be very difficult to keep heat inside your home.
90% of U.S. homes are under-insulated.
NAIMA.org
That’s because an attic that isn’t insulated properly will allow a significant percentage of your home’s heat energy to seep out through the roof.
This is a big deal—and one of the most common propane-wasting culprits out there. Learn more in our complete guide to attic insulation.
Or watch the video below for a quick visual of how insulation and air sealing work together to keep heat inside your house.
Fixing these issues is a two-step process.
Step 1: Do a complete energy audit on your house
An energy audit takes a deep look at your home—the walls, windows, appliances, etc.—to look for propane-wasting culprits.
An energy audit is a service offered by some propane providers and many energy-efficiency specialists. You can also do a DIY home energy audit—or get a free energy assessment from Sealed if your house qualifies. Here’s where to find an energy audit near you.
When you get your energy audit report, you’ll have the details about exactly where energy is escaping your house. And that means it’s time to take action.
Step 2: Make sure your house is properly sealed and insulated
Air sealing is the process of filling the tiny holes and gaps that allow the heat to get out of your home. You can learn more about air sealing here.
And installing the right kind of insulation (especially in your attic) can go a long way to ensuring you get the most out of your propane tank).
Both of these steps, taken together, will ensure the heat you buy stays inside the house. (Say goodbye to a cold drafty house, too.) Read more about weatherizing your home.
And that, of course, will go a long way to extending your propane tank—and lowering your bills.
(By the way, both sealing and insulating are jobs for professionals, but if your house qualifies you can get both done for zero upfront cost.)
Of course, there’s one other thing you can do to drastically reduce propane use: Transition your home away from propane altogether!
It’s worth considering, both because there are far better ways to heat your home in 2023, and because the answer to the question, “Will propane be around forever?” is No.
How can I heat my house without propane?
There’s no shortage of ways to heat your home without propane—you could choose boilers, furnaces, radiant heating. Plenty of options.
(Tap here to get the full array of home heating options.)
But the U.S. HVAC industry is now transitioning to far more efficient ways to heat the home.
And there’s one heating appliance that stands head and shoulders above the rest in terms of quality of life, running costs, and simplicity: the cold climate heat pump… and it’s powered by electricity.
What’s a heat pump?
In brief, a heat pump is HVAC that pulls heat energy from the outside air and transfers it into your house.
Think of it like an air conditioner running in reverse—in fact, it actually functions as an air conditioner in summer, which makes it an all-in-one HVAC replacement. (Learn more about heat pumps at The Complete Guide to Heat Pumps.)
The great thing about cold climate heat pumps is that they’re the most efficient way to heat your home and, by far, the simplest.
- They’re super quiet.
- They don’t smell.
- They don’t require fuel delivery.
- And they’re really easy to maintain.
Heat pumps are up to 3x more energy-efficient than traditional heating systems.
Plus, heat pumps don’t require any special home structures or ductwork to install, so transitioning from propane-powered HVAC is simple.
But what about dollars and cents? Is electric heat expensive?
We won’t beat around the bush. Heat pumps can be more expensive to install.
But in the long run? You’ll likely save money by installing a heat pump, because the running and lifetime maintenance costs for heat pumps are lower than other, more traditional HVAC systems. Basically, you should skip natural gas and go with heat pump electric heat instead. Have reservations? Read electric vs gas heat to learn more.
By the way, heat pumps are up to 3x more energy-efficient than traditional heating systems (13).
And if you pair a heat pump with whole-home weatherization, including air sealing and insulation?
That’s just about as comfortable and efficient (and happy!) as a home can get—especially if you can get all these upgrades for ZERO upfront costs. And these upgrades often come with possible rebates and tax credits, too, if you’re eligible.
Interested?
Get a home energy upgrades installed for $0 upfront cost
The steps that will make the biggest impact on your propane usage—air sealing and insulation—are simple, but they’re not easy.
To get those jobs done right, you’ll need professional help. (And while switching to an electric heat pump is the best choice for a lot of folks, it does represent a major installation project.)
But organizing a huge home upgrade plan—choosing the upgrades, hiring the contractors, organizing the project, and then paying for it—can suck a lot of time and take a lot of mental and financial resources.
Cue the old infomercial host: There must be another way!
There is.
All the stress vanishes when you go with Sealed for your home upgrades.
Here’s how it works: If your house qualifies for a Sealed energy makeover, you’ll get a free expert energy assessment of your home, and we’ll create a customized plan for your energy upgrades. (You’ll get everything you need and nothing you don’t!)
After you approve the plan, we’ll hire and vet the best local contractors and manage the project from start to finish. (And if you don’t save energy, we take the hit.)
If I don’t have to spend any extra money to get a huge improvement to my home, it’s just a no brainer at that point.
Scott. R, Sealed customer
It’s a great system that Sealed customers love. And we suspect you’ll like it, too—especially if it means never worrying about the price of propane again.
See if you qualify: It only takes a couple minutes.
Important questions about heating a home with propane
Check out some of the most common questions from those who heat their home with propane.
- Is it worth switching from oil to propane?
- Is it cheaper to use gas or propane?
- Is propane heating dangerous?
Is it worth switching from oil to propane?
Maybe, but there are better options out there.
Heating oil is expensive, so switching to propane might be able to save you a little money on your heating bills. Ultimately, if you’re thinking about switching from oil, we recommend going straight to electric home heating via a cold climate heat pump. It’s cleaner, more reliable,, and less dangerous than both oil and propane.
Is propane more expensive than natural gas?
Natural gas is typically cheaper than propane. Gas burns more efficiently than propane and produces less waste, which means that you can get more out of the same amount of energy with gas. Plus, gas is generally cleaner and safer than propane.
That said, the cost of natural gas is skyrocketing. So if you’re already considering replacing your propane-powered heating system, keep in mind that the best and most efficient heating system on the market today uses electricity.
In short: Transitioning to an electric HVAC system (such as a cold climate heat pump) is your best option long-term.
Is propane heat safe? How dangerous is propane gas?
How dangerous is propane gas? Well, propane definitely has its risks. For one, it is highly flammable. This means it can cause fires if it’s not handled correctly. Additionally, propane gas can produce carbon monoxide and other byproducts of combustion, which can be dangerous if they accumulate in your home.
(Also, propane is an asphyxiating gas—so don’t breathe it in because it can cause your lungs to stop working.)
That said, if it’s properly stored and handled, the risk of a propane leak is low—as long as your appliance is correctly installed and maintained (so stay on that).
(FYI: If you’re looking for the safest HVAC on the market, you’ll find it here: heat pumps.)
Discover how you could get a heat pump HVAC system at no upfront cost.
