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Propane vs Electric Heat for Rural Wyoming: Which Costs Less to Run in 2026

Rural Wyoming homes heat with propane or electricity, and the cost gap is wide. Compare 2026 costs per million BTU for propane, resistance, heat pumps, and storage.

Propane vs Electric Heat for Rural Wyoming: Which Costs Less to Run in 2026

Outside of Cheyenne, Casper, Laramie, Gillette, Rock Springs, and a handful of other towns with natural gas mains, Wyoming homes heat with propane, electricity, wood, or some combination of the three. The ranch outside Wheatland, the cabin near Dubois, the acreage south of Sheridan, and the subdivision lot ten miles out of Riverton all face the same question when the old furnace fails: stay on propane, go electric, or split the difference.

The answer in 2026 depends on three numbers. Propane in Wyoming has ranged from about $1.80 to $2.80 per gallon over the past few winters, with rural delivery to remote tanks at the higher end.

Electricity from Rocky Mountain Power, Black Hills Energy, and the rural electric cooperatives runs roughly 11 to 14 cents per kilowatt hour, which is below the national average. And the type of electric heat matters enormously, because electric resistance baseboard and a cold-climate heat pump cost wildly different amounts to run on the same electricity.

Wyoming's altitude and wind add complications that a Kansas or Nebraska homeowner never thinks about. Propane furnaces lose capacity at elevation and have to be derated. Heat pumps lose capacity in the cold and have to be sized for Laramie's 7,200 feet or Jackson's 6,200 feet with January averages in the teens.

Wind at 30 to 50 miles per hour across the high plains pulls heat out of a house faster than any thermometer suggests. The figures below are approximate.

What Propane Heat Costs to Run

Propane contains about 91,500 BTU per gallon. A new 95 percent efficient propane furnace delivers roughly 87,000 BTU of usable heat per gallon, and at $2.30 a gallon that works out to about $26 per million BTU of heat in the house. An older 80 percent furnace pushes that to $31, and a 30 year old unit running at 70 percent pushes it to $36.

A typical rural Wyoming home burns 800 to 1,400 gallons a year depending on size, insulation, and exposure. At $2.30, that is $1,850 to $3,200 for the heating season. Homes at higher elevation in Jackson, Pinedale, and the Star Valley burn more because the season is longer, and drafty older ranch houses along the Powder River burn the most.

Price swings are the hidden cost. Propane in Wyoming has moved by 80 cents or more within a single winter in the past decade, and a homeowner filling a 500 gallon tank in February pays whatever the spot price is that week. Summer pre-buy contracts from suppliers in Casper, Riverton, Rock Springs, and Sheridan lock in a price and smooth the payments, usually at a small premium over the summer spot price.

Altitude Derating

Gas appliances lose about 4 percent of their input capacity for every 1,000 feet above sea level because the thinner air carries less oxygen for combustion. A 100,000 BTU propane furnace installed in Laramie at 7,200 feet delivers closer to 71,000 BTU unless the manufacturer's high-altitude conversion kit is installed and the unit is properly adjusted. Contractors who work in Wyoming handle this routinely, but a furnace bought online and installed by a generalist may be badly undersized without anyone realizing it.

Modulating and two-stage propane furnaces handle Wyoming's wide temperature swings better than single-stage units and run quieter. They cost $1,000 to $3,000 more, and installed prices for a propane furnace in rural Wyoming run about $5,500 to $12,000 depending on efficiency, staging, and travel distance for the installer.

What Electric Heat Costs to Run

Electric resistance heat, meaning baseboard heaters, wall heaters, or an electric furnace with heating strips, converts electricity to heat at 100 percent efficiency. At 12 cents per kilowatt hour, a million BTU costs about $35. That is more than propane at any price under $3.00 a gallon with a modern furnace, which is why resistance heat as the primary source is the most expensive way to heat a Wyoming home.

Resistance heat still has a place. Baseboard in a seldom-used bedroom, a wall heater in a mudroom, or an electric furnace as backup for a heat pump all make sense because the installed cost is low and the hours of use are limited.

Electric baseboard costs $150 to $400 per unit installed, and an electric furnace costs $2,500 to $5,500. A home heated entirely by resistance in Casper or Gillette will spend $2,500 to $4,500 a year at typical loads.

Off-peak electric thermal storage is an option offered by several Wyoming cooperatives, including those serving the eastern plains and the Bighorn Basin. The system heats ceramic bricks or a large water tank during low-rate overnight hours and releases the heat during the day.

Off-peak rates of 5 to 8 cents bring the cost down to $15 to $23 per million BTU, which competes with propane. The equipment costs $6,000 to $15,000 and requires a cooperative that offers the rate.

Cold-Climate Heat Pumps

A heat pump moves heat rather than making it, and a cold-climate model delivers two to three units of heat per unit of electricity across a Wyoming winter. At 12 cents and an average coefficient of performance of 2.2, a million BTU costs about $16, well under propane. The efficiency drops as it gets colder, falling toward 1.5 at 5 below and toward 1.0 at 15 to 20 below, where the unit is no better than resistance heat.

Wyoming's cold is the limit. Cheyenne, Casper, Sheridan, and Riverton spend most of the winter between 10 and 40 degrees, where a heat pump runs well. Laramie, Jackson, Pinedale, and Big Piney see extended stretches below zero where a heat pump needs backup.

A ducted cold-climate heat pump costs $12,000 to $20,000 installed in rural Wyoming, and a ductless single-zone unit costs $4,500 to $7,500. Contractors from Cheyenne, Casper, and Jackson cover much of the state, and travel adds to the bill.

Putting the Numbers Side by Side

At $2.30 propane and 12 cent electricity, the cost per million BTU delivered comes out roughly like this: cold-climate heat pump around $16, off-peak thermal storage $15 to $23, new 95 percent propane furnace $26, old 80 percent propane furnace $31, and electric resistance $35. Those numbers shift with the price of propane and the local electric rate, and the heat pump number shifts with how cold the winter is.

A home burning 1,000 gallons of propane a year at $2.30 spends $2,300. The same heat from a heat pump would cost about $1,400 to $1,700 in Cheyenne or Casper, where the unit runs efficiently most of the winter. In Laramie or Jackson, with more hours in backup, the heat pump number climbs to $1,800 to $2,200, close to propane.

The propane price is what tips the balance. At $1.80, a new propane furnace costs about $21 per million BTU and nearly matches a heat pump in the colder towns. At $2.80, propane costs $32 and the heat pump wins everywhere in the state.

The Hybrid Approach That Fits Wyoming

Most rural Wyoming contractors in 2026 recommend keeping propane as backup rather than eliminating it. A cold-climate heat pump handles heating from fall through spring in all but the coldest weather, and the propane furnace takes over below a changeover temperature of 5 to 15 degrees. The homeowner burns 300 to 500 gallons instead of 1,000 and still has heat when the power goes out and a generator is running the furnace.

This dual fuel setup costs $14,000 to $24,000 when both pieces of equipment are new, or $12,000 to $20,000 for the heat pump alone if the existing propane furnace is in good shape. The heat pump also provides cooling, which more Wyoming homeowners want as summers in the Bighorn Basin and along the North Platte have pushed into the 90s more often.

Wood and pellet stoves are the third leg for many rural households. A wood stove in the main living space cuts propane use sharply for homeowners with access to a woodlot or a permit for the Medicine Bow, Bighorn, or Shoshone National Forests. Stove installation costs $3,000 to $7,000 with a proper chimney, and pellets run $250 to $350 a ton with a typical home burning three to five tons a year.

Rebates and Programs

Rocky Mountain Power's Wattsmart program offers rebates for heat pumps and other efficiency upgrades in its Wyoming territory. Black Hills Energy offers incentives in the Cheyenne area.

Several cooperatives, including High West Energy, Wyrulec, Carbon Power and Light, and others, offer heat pump rebates or off-peak thermal storage rates to members. Amounts and terms vary and change annually.

The federal 25C tax credit that covered up to $2,000 for a qualifying heat pump and up to $600 for a furnace ended for equipment placed in service after December 31, 2025, so 2026 installations do not qualify. Manufacturer promotions run in spring and fall, and most Wyoming contractors offer financing.

Wyoming's Weatherization Assistance Program provides insulation, air sealing, and heating system replacement for income-qualified households through local agencies. Given how much wind and thin insulation drive heating costs in Wyoming, weatherization often saves more than a fuel switch. When comparing installers, the HVAC contractors listed for Wyoming are sorted by town.

Which Way to Go

A homeowner in Cheyenne, Casper, Torrington, Douglas, or Sheridan with a failing propane furnace should price a cold-climate heat pump with propane backup. The heat pump will carry most of the season at $16 to $20 per million BTU and the furnace covers the cold snaps. Operating cost falls by a third or more compared to propane alone.

A homeowner in Laramie, Jackson, Pinedale, Evanston, or anywhere above 6,500 feet with long stretches below zero should weigh the heat pump more carefully. It still saves money in the shoulder seasons, but the backup will run more, and a new high-efficiency propane furnace with an altitude kit may be the simpler choice if cooling is not wanted.

Nobody should install electric resistance as the primary heat source in Wyoming unless an off-peak cooperative rate makes thermal storage work. The equipment is cheap and the bills are not. For more home heating and service guides across the state, browse the Wyoming blog.

Frequently Asked Questions

Is propane or electric heat cheaper in Wyoming?

A cold-climate heat pump is cheapest at roughly $16 per million BTU at typical Wyoming rates. A new propane furnace runs about $26 at $2.30 a gallon, and electric resistance heat is the most expensive at about $35.

Do heat pumps work in Wyoming winters?

Cold-climate models work well in Cheyenne, Casper, Sheridan, and Riverton with occasional backup. In Laramie, Jackson, and the high mountain valleys they need a propane or electric backup for extended stretches below zero.

How much propane does a Wyoming home use per year?

Typically 800 to 1,400 gallons, with high-elevation and older homes at the upper end. Adding a heat pump usually cuts that to 300 to 500 gallons.

Does altitude affect a propane furnace?

Yes. Gas appliances lose about 4 percent of capacity per 1,000 feet, so a furnace in Laramie at 7,200 feet needs a high-altitude conversion kit and proper adjustment to deliver its rated output.

What is off-peak electric thermal storage?

A system that heats ceramic bricks or water overnight at a reduced cooperative rate and releases the heat during the day. At off-peak rates of 5 to 8 cents it competes with propane, but it requires a cooperative that offers the rate.

Are there rebates for heat pumps in Wyoming in 2026?

Rocky Mountain Power, Black Hills Energy, and several cooperatives offer heat pump rebates or off-peak rates. The federal tax credit expired at the end of 2025.