Where do we start when we want to compare heating systems in Western Montana? First, it's imperative that you know your local fuel costs. For instance, this analysis looks at electric heat with our 5.36 cent kilowatt-hour rate. If your local cost is 8 cents or 12 cents, this analysis won't help you. Let's start with a list of the four possible fuels:

• Wood
• Natural Gas 
• Propane 
• Electric 
  • Wall Heaters 
  • Air Source Heat Pumps (ASHPs) 
  • Ground Source Heat Pumps (GSHPs)

Wood, the heating fuel of the past. Put away your chain saw and save your weekends. Installed cost for stove and chimney: $2000 to $5000 or more. Save your money for more insulation.

Natural Gas is a good choice if it's available. Natural gas is roughly 2/3 the cost of propane, and it's roughly the same cost of electric heat (register wall heaters). Natural Gas is available only in more densely populated areas. Because Natural Gas used to be the least expensive fuel, many folks built new Natural-Gas heated homes with sub-standard insulation levels.  Installed cost for natural gas furnace: $6,000 to $10,000.

Propane is "the other gas," but don't let the blue flame fool you: it is not priced close to Natural Gas. Propane heat is about 50% more expensive than natural gas. And it's 50% more expensive today than electric heat at our rate of 5.36 cents per kilowatt-hour. (NorthWestern electric is 9.62 cents per kWh.) Don't forget to factor in the propane tank rental when comparing costs. Installed cost for propane furnace: $6,000 to $10,000.

Electric

Electric Wall Heaters are approximately 14" long by 7" high electric heaters that are installed in each room in your home. The thermostat is installed at chest height above the unit. Each unit is individually controlled, so you can heat one room to 72 degrees and another to 68. In todays super-insulated electrically heated home, the heaters can be installed on interior walls rather than under windows. Each heater has a quiet blower. Heaters are 100% efficient. Installed cost: Roughly $1,500 to $2,000.

Air Source Heat Pumps (ASHPs) are electric heat pumps that absorb heat from the outside air. They are only now becoming usable in our cold climate (where there isn't much heat in the outside air in January). A few years back ASHPs installed in Western Montana gave the term "heat pump" a black eye because they did not perform well. Today's higher quality ASHPs offer 150% to 200% efficiency and summer cooling. Installed cost: $8,000 to $14,000.

Ground source heat pump Illustration.

If you pay taxes to the State of Montana, and you install a GSHP in a new or existing home, you qualify for a $1,500 tax credit from the state. Use Montana form ENRG-B "Geothermal Energy System Credit." (The state also offers up to $500 tax credit towards higher-than-code insulation levels.) A GSHP also qualifies you for lower property taxes.

A very, very rough comparison of the YEARLY costs of heating a 2000 square foot new home in Western Montana with the above systems. REC electric KWH rate of 5.36 cents. Today's average cost for wood, natural gas and propane.

• Wood. $300 if well insulated. $600 if average insulation. $900 if poor insulation.
• Natural Gas.$400 if well insulated. $800 if average insulation.  $1200 if poor insulation.
• Propane. $600 if well insulated. $1200 if average insulation.  $1800 if poor insulation.
• Electric Wall Heaters. $400 if well insulated. $800 if average insulation.  $1200 if poor insulation.
• Air Source Heat Pumps (ASHPs). $300 if well insulated. $600 if average insulation.  $900 if poor insulation.
• Ground Source Heat Pumps (GSHPs). $200 if well insulated. $400 if average insulation.  $600 if poor insulation.

Poorly designed, sealed and insulated ductwork can add as much as 30% to your heating bills. If you choose a ducted heating system, be sure to have the ducts sealed with mastic, not plain duct tape. It pays to do your homework.