Geothermal versus Propane

Geothermal Fact Sheet: Geothermal the Clear Winner Versus Propane

FORT WAYNE, IN - Many parts of the United States - including wide areas of the Midwest - are not served by the country's natural gas distribution system. Homeowners in these areas must find alternative ways to heat their homes. When that choice comes down to geothermal energy versus propane gas, the clear winner is geothermal heating and cooling.


Unlike propane, a homeowner's geothermal system is self-contained and uses the earth's natural energy to provide heating and cooling year-round. Because geothermal systems operate without using propane, natural gas or heating fuel, they are not affected by the often-severe price fluctuations associated with these fuels. Geothermal systems use a ground loop - pipes buried a few feet under the ground - to help transfer the energy from the earth to warm a home in winter. In summer, the process is reversed and heat is taken from the home and dispersed underground.

Geothermal is clean, natural and highly efficient. These systems do not burn fossil fuels and do not emit gases that could harm the environment.

Another advantage over propane is that a geothermal system provides both heating and cooling with the same unit - with an option that provides free hot water. With this combination, homeowners can save up to 70 percent on their monthly utility bills. Geothermal also is remarkably efficient, producing four units of energy for every unit of energy consumed. The U.S. Environmental Protection Agency recognizes geothermal as the most efficient, cost-effective and environmentally friendly energy technology available today.


Propane is a by-product of natural gas processing and petroleum refining. The primary mode of transporting propane within the United Sates is by 70,000 miles of interstate pipeline. The demand for propane comes from several different markets that exhibit distinct patterns in response to the seasons. Residential demand, for example, depends on the weather, so prices tend to rise in winter. The needs of the petrochemical and agricultural sectors also can put demands on the supply of propane, driving up prices for residential users.

In general, when inventories of propane at the start of the winter season are low, chances increase that higher propane prices may occur during the winter season.

Propane prices also occasionally rise higher than would be expected from normal supply/demand fluctuations. The main cause seems to lie in the logistical difficulty of obtaining re-supply during the peak heating system. Because propane is produced at a relatively steady rate year-round, there is no ready source of incremental production when supplies run low. Wholesalers and retailers are forced to pass on price increases to consumers.

Annual Heating Cost Comparison for Four U.S. Cities (2,500-square-foot home)

Heat Lossper Hour

350% Efficient Geothermal Heat Pump(cost per Kwh)

90% Efficient Propane(cost per gallon) City
  0.08 0.90 1.20  
80,000 $643 $1,067 $1,442 Atlanta
80,000 $871 $1,444 $1,926 Cleveland
80,000 $1,054 $1,749 $2,332 Green Bay
80,000 $1,072 $1,778 $2,370 Anchorage

Important note: The figures shown for propane gas DO NOT INCLUDE electricity to power the blower.


Geothermal energy provides both heating and cooling with the same unit. It is extremely efficient, cost-effective and does not pollute the environment. Because it does not rely on fossil fuels, the main cost of a home's geothermal system is not affected by price fluctuations on the energy market.

Propane prices, on the other hand, can rise with the winter heating season because of a number of factors. Over a six-year period from 1994 to 2000, propane prices followed the price trends of crude oil.*

For more information about the advantages of geothermal energy, visit the Home Experts website,, your local WaterFurnace supplier. WaterFurnace International is one of North America's leading manufacturers and distributors of geothermal heating and cooling systems.

* Source for information on propane gas: Energy Information Administration (EIA), an independent statistical agency within the U.S. Department of Energy, Propane Prices: What Consumers Should Know, 10/26/2000.