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Choosing a Heating System in NH

Updated 2026-10-10 · 7 min read

Oil, propane, natural gas, cold-climate heat pumps or wood in NH: how to compare fuel costs, read AFUE and HSPF2 ratings, and plan for backup heat.

Start with the house

Before you pick equipment, find out how much heat your house actually needs. Air sealing and insulation lower that number, and they can mean a smaller, cheaper system. Our insulation and weatherization guide covers energy audits and where to start.

Sizing matters too. ENERGY STAR says a system that's too large or too small will struggle to keep you comfortable, and that your contractor should size it with a "Manual J" calculation of your home's heating and cooling needs (ENERGY STAR). Ask every installer who quotes the job whether they did one and how they arrived at the size.

Compare fuel costs with state data

Fuel prices swing from year to year, so we don't list them here. The NH Department of Energy's NH Fuel Prices page tracks average prices for heating oil, propane, kerosene, natural gas, electricity, wood pellets and cordwood. It also converts each heating fuel to a cost per million Btu using an assumed efficiency for typical equipment, including a separate line for electricity used in a heat pump.

Heating oil and propane prices there are updated weekly from the first Tuesday in October through the last Tuesday in March, and monthly the rest of the year. The department notes these are statewide averages, so your local price may differ. It also explains that oil, propane and kerosene prices are set by the market, while natural gas and electricity rates are regulated by the Public Utilities Commission. The same page has notes on pre-buy contracts and budget plans for heating fuels.

The main options in New Hampshire

Heating oil: burned in a boiler or furnace, with fuel stored in a tank at the house. You'll need to look after the tank (see below).
Propane: used in boilers, furnaces and water heaters, with fuel stored in a tank on site. NHDES says questions about propane storage go to your local fire officials or building inspector (NHDES).
Natural gas: only available where a gas utility runs lines. The NH Department of Energy keeps a list of utilities by city and town. Call the gas company to ask whether service can reach your street.
Cold-climate heat pumps: electric systems that heat and cool, either ducted or ductless (mini-splits). ENERGY STAR says many newer models heat well even in the coldest climates.
Wood and pellets: wood stoves, fireplace inserts, pellet stoves and wood or pellet boilers and furnaces. The EPA says EPA-certified stoves burn cleaner and more efficiently, and that most pellet stoves need electricity to run (EPA Burn Wise). Read our chimney and wood stove safety guide before you install one.

Reading efficiency ratings: AFUE

Furnaces and boilers are rated by Annual Fuel Utilization Efficiency (AFUE). ENERGY STAR describes it as the percentage of the heat in the fuel that becomes heat for your home instead of being lost (ENERGY STAR furnace criteria). Higher is better.

Federal efficiency standards (10 CFR 430.32) set these minimums, as of October 2026:

Non-weatherized (indoor) gas furnaces: 80% AFUE. Non-weatherized oil furnaces: 83%.
Boilers made on or after January 15, 2021: 84% for gas hot water, 86% for oil hot water, 82% for gas steam and 85% for oil steam.
ENERGY STAR sets higher bars. In the northern U.S., including New Hampshire, a certified gas furnace must be rated at least 97% AFUE and an oil furnace at least 87%. Certified gas boilers are rated 90% and oil boilers 87% (ENERGY STAR boilers).

Reading efficiency ratings: HSPF2 and cold-climate heat pumps

Heat pumps are rated for heating by HSPF2 (Heating Seasonal Performance Factor 2). It compares the heat a system delivers over a heating season to the electricity it uses. SEER2 measures cooling the same way. For both, higher is better (ENERGY STAR heat pump criteria).

Federal rules require split-system heat pumps made on or after January 1, 2023 to have at least 7.5 HSPF2 and 14.3 SEER2. ENERGY STAR certification for split systems requires at least 7.8 HSPF2. Its cold-climate designation requires at least 8.5 HSPF2 for ductless and 8.1 for ducted systems, plus a coefficient of performance (COP) of at least 1.75 at 5 degrees F.

Two lists help you compare models for New Hampshire winters. ENERGY STAR's cold-climate certification includes third-party testing down to 5 degrees F. The Northeast Energy Efficiency Partnerships (NEEP) keeps a cold-climate air source heat pump list of models that meet its cold-climate specification. NHSaves rebates also have their own qualified product list. See our heat pump and energy rebate guide for current programs.

Plan for backup heat

ENERGY STAR says cold-climate heat pumps keep working below 5 degrees F, but pairing one with a backup heat source heats the home most efficiently when temperatures drop further. It suggests working with your contractor on sizing and how a heat pump will work with a backup system. If you're keeping an existing boiler or furnace as the backup, ask the installer how the two systems will be controlled so they work together.

Also think about power outages. Heat pumps run on electricity, and the EPA says most pellet stoves need power too. Ask your installer what any system you're considering needs to run during an outage. See our generator and storm prep guide for backup power options.

If you heat with oil: look after the tank

In a 2020 fact sheet, NHDES said New Hampshire has more than 100 oil spills a year from household heating oil tanks, some from overfilling and others from tanks that weren't properly located, installed or maintained (NHDES REM-6 checklist). It recommends that new tanks and heating systems be installed to NFPA 31, local codes and NHDES best management practices. It also recommends inspecting your tank at least every three months, looking without touching. Its checklist asks, among other things:

Are the tank, piping and supports free of leaks and significant rust?
Does the tank sit on a one-piece concrete pad or concrete floor?
If it's outdoors, is it protected from ice and snow falling off the roof?
Does it have a working sight gauge and a vent whistle (which warns the delivery driver the tank is full), and are the fill and vent pipes capped?
If anything looks wrong, NHDES suggests calling your oil company or a plumbing and heating contractor rather than fixing it yourself.

Oil tank help from NHDES

The NHDES Safetank program helps income-qualified homeowners upgrade, replace or remove substandard home heating oil tanks. If a tank leaks, the state Petroleum Reimbursement Fund may reimburse required cleanup costs for eligible owners without private insurance coverage. To qualify, the tank must comply with federal, state and local rules, including NFPA 31 and NHDES best management practices. Ask NHDES about current eligibility before you count on either program.

Hire licensed installers and get permits

In New Hampshire, work on propane and natural gas piping and appliances, including venting, is "fuel gas fitting" under RSA 153:27. State rules (Mec 302.01) require anyone working as a fuel gas fitter to be licensed through the OPLC Mechanical Licensing Board. The main homeowner exception in RSA 153:36 is narrow. It covers an existing single-family, stand-alone home that you own and live in as your primary residence, and the work must still meet code and any permit and inspection requirements. The board lists the oil heating technician license as voluntary.

Heat pump installs often involve electrical work as well. See which NH contractors need a license, and ask your town which permits a new heating system needs (building permit guide). You can find installers in our HVAC, plumbers and insulation contractors listings.

Carbon monoxide alarms and yearly service

Any appliance that burns fuel can produce carbon monoxide. Under RSA 153:10-a, single-family homes built or substantially rehabilitated after January 1, 2010 must have a CO detector if they have an attached garage or a fuel-burning appliance. Rental and multi-unit dwellings must have them under the NFPA 720 standard, with similar exceptions. Adding a fuel-burning appliance or garage later triggers the requirement.

The CPSC recommends CO alarms on every level of the home and outside sleeping areas, with battery power or battery backup (CPSC). The NH Department of Energy suggests professional maintenance for your heating system every year (NH DOE).

This guide is general information, not financial advice. Codes, programs and prices change, so confirm details with your town, the relevant agency and your installer before you buy.