Understand Propane Price and Find Ways to Save

June 21, 2022 –

We’re all perfectly aware of the changes gas prices make daily. (Every visit to the pump is a new adventure!)

Propane price works much the same way, fluctuating based on several factors.

The price of propane is dictated by the price of natural gas and crude oil (because propane is produced as a byproduct of gas and oil), supply and demand, and how they’re impacted by weather conditions and market conditions/transportation costs.

(For more details about the impact of these factors, visit this blog post.)

You Still Save With Propane

But even with price increases, propane is still cheaper than most other energy sources. The superpower that drives the price down is propane’s efficiency.

Because propane is so efficient, it takes less of it to create energy than other sources like electricity or diesel. That means home and business owners save hundreds of dollars per year using propane appliances.

For example, in August 2019, the cost of residential electricity in the US was 13.30 cents per kilowatt-hour, which means the number of kilowatts needed for something to run for one hour. In comparison, natural gas costs around $1.01 per therm, which is the unit of measurement for gas use. (Remember: the price of propane is linked to natural gas.)

An electric furnace’s operating cost could be around $2,628 per year, while a gas furnace’s performance cost would be about $1,800 a year.

Check out this direct comparison of the energy output of propane vs. electricity. (The graph uses the abbreviation KWH for kilowatt-hour.)

Electric cost comparison infographic

Source: perc

The place you’ll want to point your attention to is the last line, showing the propane price per gallon compared to the electricity price per equivalent unit of propane.

Propane is 33% less expensive per unit than electricity in the example given –and you can plug in your numbers to get your local price per kilowatt-hour!


Because propane is such efficient and clean-burning energy, it’s recognized as an alternative fuel — and some states and local governments offer propane rebates, tax credits, and grants to incentivize its use. Qualifying for these incentives can help offset the purchase cost of the propane appliances that help your home save money — a double serving of smart savings.

Most states in the USA offer these propane incentives. Here’s a guide to incentives in the states Paraco serves (contact us for more information on how to apply for these incentives):

New York:

$300 rebate for the safe installation of a propane water heater

New Jersey:

$200 rebate for the safe installation of a propane water heater (for new construction or the replacement of electric or natural gas only)


$300 – $600 rebate for the safe installation of a propane water heater and central heating system (for the replacement of electric or oil only)


$300 – $600 rebate for the safe installation of a propane water heater and central heating system (for the replacement of electric or oil only)

And while not a government incentive, a personal motivation may be the knowledge that homes running on all-gas are valued up to five percent higher than all-electric homes.

Paraco is Here to Help

Paraco offers programs to help mitigate the effects of propane price increases.

Our 10-month Budget Payment Plan generates a consistent monthly bill for you based on your historical average propane use — so that even if prices fluctuate, your monthly bill doesn’t.

And our propane pre-buy programs allow you to take advantage of the current lowest available price to purchase gallons in advance for the rest of the year. No surprises for you!

We also recommend you use energy-efficient appliances, and when you work with us, we provide cutting-edge energy-saving equipment installations that keep costs down. For example, a propane water heater can save you an average of $150 per year on your utility bill.

Energy conservation makes a difference, too! We recommend lowering your thermostat, reinforcing any drafts in your windows, unblocking air vents, and washing clothes in cold water to save energy and money.

And if you ever find yourself falling behind, please let us know. You’re far from alone if you’re experiencing financial challenges, and there are government programs and community organizations that can help close the gap.

Propane price can be confusing, but there’s a way through all the noise. Propane remains one of the safest, cleanest, most efficient, and most affordable fuels, and that doesn’t change.


  1. Vanessa Vilfranc on September 3, 2022 at 7:50 am

    Do you credit checking

    • Kristen Anderson on September 6, 2022 at 8:17 am

      We require credit approvals for our Tier 2 and Tier 3 pre-buy plans, Vanessa!

  2. Mukund on December 30, 2022 at 9:17 pm

    Do you provide credit for replacing propane boiler ?

    • Ines on January 4, 2023 at 8:59 am

      Hi Mukund! There are local rebates available based on municipalities. Please call us at 800.647.4427 to see if there is something available in your particular location.

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