Heating cost, Michigan
What It Costs to Heat a Home in Michigan This Winter (2026-27)
Short answer: heating a typical 2,000 sq ft home in Michigan costs about $938 a year with the cheapest option, a natural gas furnace, and about $4,958 with the most expensive, electric resistance heat. Heating oil runs $4,211 and propane $2,340.
By Marcus Reed. Updated Nov 3, 2026. Part of our heating cost by state study.
Yearly heating cost in Michigan, by system
| System | Michigan a year | US average | Fuel used |
|---|---|---|---|
| Natural gas furnaceCheapest95% AFUE | $938 | $831 | 890 therms |
| Propane furnace95% AFUE | $2,340 | $1,631 | 973 gallons |
| Air-source heat pump6.6 HSPF2, cold-climate rating | $2,563 | $1,138 | 12,808 kWh |
| Heating oil boiler85% AFUE | $4,211 | $2,788 | 718 gallons |
| Electric resistance100% | $4,958 | $2,702 | 24,775 kWh |
Estimates for one reference home: 2,000 sq ft, average insulation, a normal winter. Equipment, maintenance, fan and pump electricity and tank rental are not included.
How Michigan compares
Michigan ranks 21st most expensive of 50 places with a real heating season when each uses its cheapest option, and 21st for a gas furnace. Its gas figure of $938 is 13% above the US average of $831.
The climate explains part of it. Michigan averages 6,709 heating degree days a year (1991-2020 normal, weighted by where people live), 1.6 times the contiguous US figure of 4,230, so the same house needs 84.5 million BTU of heat a winter against 53.3 nationally. The rest is prices: electricity at 20.0 cents per kWh against a US average of 17.3, and the fuel prices below.
Is a heat pump worth it in Michigan?
On running cost alone, an air-source heat pump costs $2,563 a year here. That is $1,648 a year less than heating oil, $223 more than propane and $2,395 less than electric baseboards. A gas furnace is still $1,625 a year cheaper where gas service is available.
Because Michigan is in a cold climate zone, these figures use a cold-climate heat pump rating of 6.6 HSPF2 rather than the 8.1 printed on most labels. A cold-climate model listed by NEEP holds its output better below freezing; a standard unit will lean more on backup heat.
Sizing decides whether a heat pump keeps up. Use our central heat pump size calculator for a ducted house or the mini-split calculator room by room.
Prices used for Michigan
- Electricity
- 20.0 cents per kWh
- EIA 2025 state average
- Natural gas
- $1.05 per therm
- EIA state average
- Propane
- $2.40 per gallon
- EIA October 2026, state average
- Heating oil
- $5.86 per gallon
- EIA October 2026, state average
Where the EIA does not publish a Michigan figure, we use its regional or US average and say so above. The full method and sources are in the main study.
Lowering the bill
- A setback schedule on a smart thermostat trims heating energy by about 8% by ENERGY STAR's estimate, about $75 a year on the natural gas furnace figure here.
- A space heater only saves money if the rest of the house is allowed to cool. At 20.0 cents per kWh a 1,500 W heater costs about $0.30 for each hour it runs on high; see what a space heater costs to run.
- Air sealing and attic insulation lower every number on this page in proportion, because they cut the heat the house needs.
Michigan heating cost FAQ
How much does it cost to heat a house in Michigan?
For a 2,000 sq ft home with average insulation in a normal Michigan winter: $938 with a natural gas furnace, $2,340 with a propane furnace, $2,563 with an air-source heat pump, $4,211 with a heating oil boiler, $4,958 with electric resistance heat. That uses EIA prices for Michigan and its 1991-2020 normal of 6,709 heating degree days.
What is the cheapest way to heat a home in Michigan?
A natural gas furnace, at about $938 a year for our reference home. The next cheapest is a propane furnace at $2,340, and the most expensive is electric resistance heat at $4,958. If you have no gas line, the choice is usually between a heat pump, propane and oil.
Is a heat pump cheaper than oil or propane in Michigan?
Yes against oil: about $1,648 a year less. Against propane it costs about $223 a year more. That already uses a cold-climate rating of 6.6 HSPF2, lower than the 8.1 label figure, because Michigan winters are cold.
How much heating oil or propane does a house in Michigan use in a winter?
Our 2,000 sq ft reference home needs about 718 gallons of heating oil in an 85% efficient boiler, or 973 gallons of propane in a 95% furnace, in a normal Michigan winter. Smaller or tighter homes use less; a cold winter uses more in proportion.
Marcus Reed
Founder and Editor, CrunchYourDollars
Marcus Reed builds the sizing tools on CrunchYourDollars. He is a software engineer with a long-running PC hardware and power supply habit, which is where the watts, watt-hours and surge math on this site comes from. Product specs are pulled from manufacturer data sheets, electricity rates from the U.S. Energy Information Administration, and water chemistry rules from the Water Quality Association. He is not a licensed electrician or plumber: the tools show the math and the matching models so you can make the call, and anything involving your electrical panel should be checked by a licensed pro.
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