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New Study from PERC Shows Propane Heating Systems Offer Quickest Payback

Independent study shows that residential propane heating systems provide greater affordability, efficiency and comfort with fewer CO2 emissions.

Washington, DC, May 16, 2014 --( Homeowners in most regions of the country can expect a faster payback from new, high-efficiency propane heating systems than from electric, oil, or even geothermal systems, according to a 2013 study by Newport Partners, a Maryland-based firm focused on building-energy performance.

The study compared 15 different heating systems in 20 locations nationwide, across seven Department of Energy-designated climate zones. The research analyzed systems commonly used in outlying areas where natural gas is unavailable.

The study looked at how long it will take to pay back a higher first cost of a more efficient heating system. If a homebuyer is willing to spend more money up front for a system which will have lower monthly utility bills, the payback analysis indicates how long it takes for the resulting savings to outweigh the higher first cost.

High-efficiency propane systems offer an economic edge over comparable oil and electric and standard-efficiency propane heating systems in most cases, according to the study, thanks to a combination of low up-front costs and long-term energy efficiency.

In cold-climate regions, for example, replacing an air-source heat pump (ASHP) with a high-efficiency propane furnace resulted in an immediate payback compared with a standard-efficiency ASHP, because the high-efficiency propane furnace was less expensive to purchase, install and operate.

The study’s findings give builders, HVAC experts, and homeowners valuable information to use when choosing heating systems for new or existing homes, according to Bridget Kidd, director of residential and commercial programs for the Propane Education & Research Council (PERC).

“Residential construction and HVAC professionals can differentiate themselves by using this data to help their customers select heating systems with clarity and confidence,” Kidd said. “As the study shows, high-efficiency propane heating systems offer an appealing combination of low first costs and lower energy bills. This makes them a wise choice for customers who are building new homes or simply replacing outdated heating systems.”

While the study found that ground source heat pumps (GSHP) produced the lowest monthly utility bills, it can take more than 16 years of accumulated energy savings to recoup their high up-front costs. Installing a GSHP with a backup propane furnace, however, decreases the size of its underground loop field — about half of a geothermal system’s installation cost — cutting as many as 13 years off the payback time.


Along with installation costs and energy efficiency, comfort is often a deciding factor for homeowners selecting a new system or deciding between repairs and replacement, the study notes.

While comfort is subjective and relative, it is possible to measure a heating system’s ability to provide consistent heat throughout the winter.

Using U.S. Department of Energy-supported software, the study found that propane forced-air furnaces delivered consistent supply air temperatures of 115-125 degrees Fahrenheit throughout the cold-climate zone’s heating season. Standard Air Source Heat Pumps (ASHP) showed a steady decrease in supply air temperatures as outdoor temperatures fell, potentially causing homeowners to feel less comfortable when heating loads were greatest.

The study also showed that ASHP supply temperatures dropped to levels that may feel less comfortable at least 60 percent of the time in the mixed-humid and cold-climate locations evaluated, and up to 20 percent of the time in hot climates.

“Cost is an important factor when choosing a heating system, but the importance of comfort can’t be overlooked,” Kidd said. “People who have experienced both gas and electric often comment that gas heat feels warmer and more comfortable. This study helps explain and quantify that.”

Environmental impact

Propane systems are able to operate at a lower carbon dioxide (CO2) emissions rate than systems running on electricity or heating oil, the study found.

For example, the study showed that a high efficiency heating oil furnace generated 15 percent more CO2 emissions than a high efficiency propane furnace. That propane furnace operating for 20 years would avert as much CO2 as 514 tree seedlings could sequester in 10 years, according to the Environmental Protection Agency’s Greenhouse Gas Equivalencies Calculator.

By contrast, heating systems with greener reputations sometimes produce higher CO2 emissions. According to the study, ASHPs emitted large quantities of CO2 in areas of the Midwest where electricity comes from coal-fired power plants.

A hybrid system that pairs an ASHP with a propane furnace can reduce those emissions by about half, the study notes.

The full study, an explanation of Newport Partners’ methodology and comparative results for all systems and regions is available at There, you'll also find PERC's Energy Cost and Carbon Calculator, as well as more information about building with propane and propane-powered products.
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Propane Education & Research Council
Lynette Von Minden, Swanson Russell

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