• The cost and availability of the fuel or energy source
• The type of appliance used to convert that fuel to heat and how the heat is distributed in your house
• The cost to purchase, install, and maintain the heating appliance
• The heating appliance's and heat delivery system's efficiency
• The environmental impacts associated with the heating fuel

The simple view of heating fuels is that most homeowners are relatively limited in their options for heating fuels. In the Northeast, the choices are largely fuel oil or electricity, although natural gas is becoming available to more homes. For people in rural areas, heating fuels may be limited to propane and wood. People in most of the rest of the country have natural gas and electricity as their main choices.

In reality, the situation is more complex than that. First of all, solar energy is available throughout the country, and new homes in cold or moderate climates should be designed to take advantage of passive solar heating. Active solar heating systems can be used as a supplemental heating source in new or existing homes and are compatible with most heating and systems. Homeowners can use either solar air heating devices for preheating of ventilation air or solar water heating devices to supplement hot water heating systems. Solar energy can also be used to boost the performance of heat pumps, and an absorption heat pump will actually allow you to power an air conditioning system with solar energy.

In addition, pellet fuels – generally made from recycled wood waste – are available nationwide. These fuels may be available at competitive prices. Wood is also available in most parts of the country, although of course it is most cost-effective if you can harvest it for free (note that even "free" firewood requires expenses for hauling it, so it may be more expensive than you think). Propane is also available throughout the country.

One somewhat simple way to evaluate heating options is to compare the cost of the fuel. To do that, you have to know the energy content of the fuel and the efficiency by which it is converted to useful heat.

Fuels are measured in physical units, such as gallons of oil or propane, cubic feet of natural gas, or kilowatt hours of electricity (kWh). They are also measured by heat content. In the United States, the most commonly used value for expressing the energy value or heat content of a fuel is the British thermal unit (BTU). One BTU is the amount of energy needed to raise the temperature of one pound of water 1°F, when water is at about 39°F. One "therm" is 100,000 BTU.

The table below provides a list of typical heating fuels and the BTU content in the units that they are typically sold in the United States. The figures below are general references for residential heating applications only. Commercial and industrial users should obtain more precise values from their fuel vendors.

*Note that wood heating values can vary significantly. The most important factor affecting useful Btu content is the moisture content of the wood. Well-seasoned, air-dried wood will typically have a moisture content of around 20% (when compared to a "bone dry" sample of the wood). A very rough approximation of the effect of moisture content on the heating value is for every percent increase in moisture content (relative to a bone-dry sample), there is a 1% decrease in heating value. The other factor affecting heat content is the tree species of the wood. Higher heating values of wood can vary from 8,000 to 10,000 BTU per pound, bone dry. A cord of wood is a rough measuring unit; it is a stack of wood 4 feet high, 8 feet long, and 4 feet wide. A "good" cord of wood will be tightly packed. Pellet fuels are usually made from sawdust. The BTU content will therefore vary depending on the type of wood that the sawdust is from. Pellet fuels typically have a moisture content of around 10%. See also wood heat value in BTU.

The efficiency of the heating appliance is an important factor when determining the cost of a given amount of heat. In general, the efficiency is determined by measuring how well an appliance turns fuel into useful heat. (The condition of the heat distribution or delivery system also affects the overall system efficiency.) Many types of space heating appliances must meet minimum standards for efficiency developed by the U.S. Department of Energy. Table 2 provides average efficiencies for common heating appliances.

The actual costs of fuels is best determined by examining your utility bills or contacting your utility and by contacting local suppliers of other fuels.

In addition to cost, you might consider the environmental impact of your heating fuel. You probably generate more greenhouse gases by heating and cooling your home than by any other activity, including driving.

Electricity seems like a clean energy source, but most electricity in the United States is generated by burning coal, which emits sulfur dioxide, nitrous oxides, particulates, and greenhouse gases. Some electricity is generated from natural gas, which burns cleaner, but at least half of the energy is lost in converting it to electricity and delivering it to your home. On the other hand, electricity is used to run heat pumps, which have the benefit of producing more energy than they consume. An electric heat pump system can balance out the efficiency losses at the power plant by using the electricity to draw energy from the outside environment.

Burning natural gas, oil, propane, wood, or pellets in your home with a high-efficiency furnace or boiler can be a very efficient way to deliver heat to your home. Of all these choices, natural gas burns cleanest.

Of course, the cleanest fuel for heating (and possibly cooling) your home is solar energy, which produces no pollution at all. In most homes, solar energy will merely supplement the main heating and cooling source, although the Department of Energy is building homes that aim to consume net zero energy over the course of a year.

When choosing a heating and cooling system, there is no one answer; it's largely a personal choice. For existing systems, your choices are pretty much set by the limitations of replacing the system with something significantly different. But for a new home, if your building contractor doesn't impose limitations, the choices are wide open.

Choosing between systems depends in part on your fuel options, but also on your preferences. Here are some questions you might consider:

• Do you want a central air conditioning system? If so, are any heat pump options – particularly geothermal heat pumps – practical for your home?
• If you don't want central air conditioning, could a baseboard hot water system or a radiant heating system meet your needs?
• If you need to cool your home but don't want a central air conditioning system, could a room air conditioner, an evaporative cooler, or a ductless mini-split system meet your needs?
• Do you want to make use of solar energy to heat or cool your home?