Switching to a heat pump will save you money if you are currently using propane, electric resistance heat, fuel oil or wood pellets for heating. Usually methane (natural) gas prices are so low that changing to a heat pump on purely economic grounds alone does not make sense. However methane prices have been volatile, and there have been times when this has made heat pumps very competitive.

You can do your own calculations. Your savings will depend on where you live (especially how cold winters get), the cost of your current heating fuel and the cost of electricity.

  • New Mexico electricity prices vary widely from $0.087/kilowatt-hour (kwhr) in Lovington, NM to Union County where some residents pay $0.262/kwhr. Look at your utility and heating bills or find your fuel costs at findenergy.com.
  • Use this calculator to compare the cost of fuels per unit of energy (MMBTUs or millions of British Thermal Units) where you live.

Here is a Fuel Cost Comparison for the Albuquerque/East Mountains area.

Residents receive methane (natural) gas from either New Mexico Gas (NM Gas) or EMW Gas, or they use propane from a variety of companies. Electricity is supplied by PNM or Central New Mexico Electric Coop (CNMEC).

Heating with electric heat pumps costs less ($16.60/MMBTU, Central New Mexico Electric Coop electricity prices; $13.69/MMBTU, PNM price) than heating with propane ($32.97/MMBTU), electric resistance ($49.82/MMBTU CNMEC or $41.03/MMBTU PNM),  wood pellet stoves ($25.73/MMBTU), and hardwood stoves ($17.12/MMBTU).

As in other locales, heat pumps are typically more expensive to operate than methane (natural) gas  ($9.21/MMBTU for NM Gas and $10.73/MMBTU for EMW Gas). However on some occasions, the price of methane has shot up, making heat pumps competitive.  For example, in Feb. 2023, EMW Gas prices rose to $2.53/therm, meaning its customers were paying $27.43/MMBTUs (v. $16.60 for a heat pump). In January 2023, NM Gas Company was charging $1.31/therm or $14.20 per MMBTU, more than $13.69 for a heat pump).

Fuel Cost Comparison Graph. Price sourcesNM Gas Methane prices, Propane pricesWood Pellet priceElectricity prices, EWM Gas prices received from company by email.  Efficiencies from US Energy Information Agency.  Figures based on this calculator. Assumes $308/ton for wood pellets, Central New Mexico Electric rates of $0.17/kwh and PNM’s $0.14/kwh rate, and an average heat pump efficiency of 300% for the entire heating season. NOAA NOWData for Moriarty airport winter months: mean average temp 30-40°F, lows 15-32°F and highs 45-68°F. A cold climate heat pump that is 410% efficient at 55°F, will drop to 310% efficiency at 35°F,  240% at 15°F, and 220% at 0°F, according to the example in this website based on a 2013 Department of Energy study.