What Is the Most Efficient Heating System For A Home?

Introduction – The Most Efficient Heating System For Home

Before we talk about the most efficient heating methods, we urge you to reevaluate the insulation of your home and look for ways to improve it. We have a number of insulation guides on this site. By mitigating the loss of heat in the first place, you reduce the reliance and energy use on your heating system. Insulation ranges from the very cheap and effective to very expensive and effective. Start with cheap and effective.

Efficient heating coupled to smart thermostats means exquisite control of the use of energy

We Will Use Cost Efficiency As The First Metric And Then Consider Other Efficiencies

Ok, with that out of the way, let’s start by considering the meaning of “efficiency“. Our website ShrinkThatFootprint is most concerned with carbon efficiency. Others talk about energy efficiency. And yet others will talk about cost efficiency. It’s actually hard to talk about the these without any context.

For example, heating with electricity in a Nordic country would be super carbon efficient because of the use of renewables, yet heating with electricity in the U.S. would be just average for carbon efficiency. It’s also hard to talk about energy efficiency because one type of heating with wood pellets might be less energy efficient than using a heat pump, yet owners are fine with it because it’s cheaper.

That brings us to “cost efficiency“. This is one of the most common understandings of “efficiency” that people look for in a heating system. They actually mean what’s the cheapest. In fact, once we’re done talking about cost efficiency, we’ll also be able to address the energy and carbon efficiency at the same time so please read on!

Different Types Of Heating Systems – Organized By Technology And Fuel Source

When it comes to central heating your home, there are many options. The most common type of heating system is a forced-air system, which uses ducts to circulate warm air throughout the house. Another common option is a boiler heating system, which uses hot water to heat the room. Radiant systems are slightly more energy-efficient than forced-air systems.

Yet another option is the baseboard heater, which uses electric coils to heat the air near the floor. Baseboard heaters are less expensive than radiant systems but are not as efficient. Finally, there is a wood-burning stove, which can supplement or replace other heating sources. The two main themes are that central heating comprises both a technology and a fuel source. And note that not all central heating uses gas or electricity.

Cost Efficiency Comparison Of Heating Systems For Home

The best way to talk about these methods is to look at data. For this, we draw from a study by the government of Maine, which is a very cold climate, that interrogated 15 types of heating systems and tabulated the annual heating cost for each. The answers were quite surprising and are shown below, arranged in ascending order of cost.

Appliance TypeEnergy SourceAnnual Heating Cost
Wood stoveWood$1169.00
Geothermal heat pumpGeothermal$1599.00
Air source heat pumpAir / Electricity$1747.00
Natural gas room heaterNatural gas$1818.00
Pellet stoveWood fuel pellets$1993.00
Natural gas boilerNatural gas$2095.00
Pellet boilerWood fuel pellets$2287.00
Natural gas furnaceNatural gas$2536.00
Propane room heaterPropane$3622.00
Propane boilerPropane$4176.00
Kerosene room heaterKerosene$4300.00
Oil boilerOil$4532.00
Propane furnacePropane$5053.00
Electric baseboardElectricity$5118.00
Oil furnaceOil$5302.00

Keep in mind that if you think these costs are high, that’s because Maine is in a cold temperature zone that will have lower average temperatures than many other parts of the US. Our rankings on system efficiency will still hold in other climates, but the costs will differ from your specific situation.

The Cost And Efficiency Of Each Type Of System 

When we look at these different appliances, we see that of these many systems, the standard ones that people use like natural gas furnaces and electric baseboard are really not at the top of best cheap. Yet the ones at the very top like wood stoves and geothermal heat pumps are not practical.

Wood stoves require a constant source of wood that is manually managed and cleaned, and geothermal requires very big investments in infrastructure, in addition will vary in efficiency depending on the geothermal sourcing of the house. Below we discuss a few patterns.

The Winner In Terms of Cost, Energy Efficiency and Practicality is The Air Source Heat Pump

The appliance that scored the highest and is most easily installed anywhere, as well as costing the least, is the air source heat pump. Since it runs on electricity, it’s also incredibly convenient. Compared to an electric baseboard heater which also uses electricity, it uses 3 times less electricity making it incredibly efficient.

This is a great apples-to-apples comparison of efficiency. The reason is that the technology of the air pump does not use electricity to directly heat the air. Instead, the electricity applies a thermodynamic cycle to a heat carrying fluid (a refrigerant) that brings cold air outside and warm air inside.

Air Source Heat Pumps Will Work In Very Cold Weather

First thing to note is that you might wonder if it brings warm air inside, will it still work in a very cold climate. The answer is yes. With the new cold climate heat pumps that came out in the 2010s, the lower operating temperature go all the way down to the 10s of Fahrenheit.

Yes it’s true the efficiency will take a hit as the outside temperature goes lower. So you might want to think of a back up heating system with the air source heat pump. Yet the amazing thing is that these new heat pumps will work to very low temperatures. People who live in warmer areas like the Western US or the Southern US will worry about this less.

Carbon Intensity Of Air Source Heat Pump Depends On The Grid

Second thing to note is that the heat pump’s carbon intensity will depend on the carbon intensity of the electrical grid. Those who live in high renewable energy places will emit less carbon than those who live in places which use a lot of oil, coal or natural gas to generate the electricity. As the world decarbonizes, air source heat pumps will become more desirable.

Third thing to note is that in fact, the heat pump is the closest we get to both energy efficiency and renewable. Natural gas, oil and propane are all fossil fuels. Burning them will incur a big carbon emission cost no matter what.

Wood and pellets are renewable but you need to make sure its sourced from responsible wood and both need to be replaced all the time. The only route to being carbon free and convenient is renewables either from a very clean electrical grid, or from your own set up like solar panel and geothermal.

Air Source Heat Pump Is Energy Efficient

Finally, comparing the electrical baseboard heater and air source heat pump, both being powered by electricity, means the air source heat pump wins on efficiency. Therefore, the air source heat pump offers us the closest to getting to a carbon free, convenient and highly efficient heat source.

In this direct comparison, close behind the air source heat pump is the geothermal (also known as ground source heat pump which gets confusing).

Boilers Are More Efficient Furnaces For A Given Fuel Type

You might have also noticed that when we compare natural gas or oil-based boilers vs furnaces, the boilers are cheaper and more efficient to run. Boilers use an intermediary fluid to heat the house. They heat up water that circulate the house.

Furnaces on the other hand heat up air that is circulated. Water is a better retainer of heat as it has a high “heat capacity”. Air on the other hand will tend to lose it. We think that’s the reason why boilers are efficient. One warning: high efficiency natural gas boilers generate a lot of condensate which has a tendency to drainage problems and leaking furnaces.

Wood Options Are Not Bad For Reducing Cost

There are three wood appliances that are all in the top 50% of most efficient heating systems. These include the wood stove that burn wood and is in fact the most efficient heating system for cost, followed by pellet stoves and boilers.

Pellets are compressed wood pieces, so are denser than wood and come conveniently in bags which makes them easier to carry around. In fact wood pellets are having a bit of resurgence which we view with skepticism as they’re basically giant repositories of carbon.

The harvesting of wood for pellets means the removal of carbon sinks and after burning releases plenty of carbon into the air. There is certainly a way to make it sustainable as long as the wood comes from a farm and thus the pellet product is part of a zero carbon cycle.

We recommend these only if you have absolutely no choice. By the way, the wood appliances are not the same as a fire place. Unlike a stove, a fire place will have a tendency to suck warm air out of a room and expel it out of the chimney. A stove on the other hand radiates heat out without removing any air. To achieve a degree of efficiency like a stove, you will need to install a fire place insert.

Propane Is Less Cost Efficient Than Natural Gas

Looking at the list of options, propane is consistently worse than natural gas. Propane comes in compressed, liquid tanks whereas natural gas is usually piped in with municipal infrastructure. The two are both hydrocarbons but propane will burn slightly less efficiently so as to give less energy per unit burned. It also turns out to be slightly more expensive.

Electricity Baseboard Heat Is Close To Being The Worst

Many people still electric baseboard heat. We don’t recommend it except for situations where its impossible to change to other types of heating systems. Electric baseboard heaters use electricity to heat up a heating element directly and then radiate that energy out.

It’s one of the most inefficient ways to generate heat and it shows by the cost. There are two situations where this might be ok. If you live in a small apartment with a small footprint then it probably doesn’t matter too much what kind of heating system you have.

In some apartments that are well insulated, being tightly packed with other apartments is quite efficient because walls are shared and heat is kept inside a large volume with a relatively small surface area. If you live in a warm climate, then it might also not matter much if the heating bill is low.

However if you live in a cold climate and its a house, and have access to electricity, it might make more sense to swap out the electric baseboard for a heat pump at the end of life of the electric baseboard system.

How To Properly Maintain Your Heating System? 

Like your car, your home’s heating system needs regular maintenance to run most efficiently. You can save money – and increase your comfort – by taking a few simple steps to keep your heating system in top condition. 

The easiest way is to have a professional inspect, clean, and tune up your furnace every fall before you use it. This will help prolong the life of your furnace and keep it running most efficiently.  You should simply ask the same company that installed it whether they have a maintenance plan or a service to send a technician to give the heating system a check-up.

For those of you with ductwork, that is, tubes hidden in the walls that carry forced warm air to all the rooms, make sure to check periodically the condition of your ductwork and seal any leaks. Leaky ductwork can waste up to 30% of the energy used to heat or cool your home. If you think your ductwork may be leaking, contact a professional to check it. 

Ensure any furnaces, boilers, or other combustion appliances in your home are properly vented to the outside so that deadly carbon monoxide doesn’t build up inside. Also, have these appliances inspected by a professional every year to ensure they are operating safely and efficiently. 

Finally, if you have a wood-burning stove or fireplace insert, have it inspected by a certified chimney sweep every year to ensure that it’s operating safely and isn’t blocked by debris such as leaves or bird nests. 

Tips For Saving Money On Your Heating Bill

An effective approach is implementing simple tips to reduce energy consumption and save money. One tip is to set the thermostat to a lower temperature when you are home and awake and then turn it down or off when you are asleep or away from home.

You can also save energy by opening shades and blinds during the day to let in sunlight and closing them at night to insulate your home. Additionally, ensuring that your windows are properly sealed will help prevent heat loss. By following these simple tips, you can significantly impact your energy consumption and heating bill.


There are several factors to consider when choosing the most efficient heating system for your home, including the climate you live in and the size and layout of your home. In general, air source heat pumps are generally the most efficient heating systems, but other heating systems may be more appropriate for your situation. Don’t forget that insulation should be on the top of your mind, and that regular maintenance of heating systems will go a long way toward efficiency.

Anne Lauer
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Anna Lauer is a writer, gardener, and homesteader living in rural Wisconsin. She has written for Mother Earth News, Grit, and Hobby Farms magazines. Anna is writing a new book about growing your food for free and an ultimate guide to producing food at little to no cost. When shes not writing or gardening, Anna enjoys spending time with her husband and two young daughters.

1 thought on “What Is the Most Efficient Heating System For A Home?”

  1. Not sure why the most efficient method of heating electric radiant heat floors are not included.


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