Location?

What is your fuel cost-oil, propane, and electric?

Rhode island.
fuel costs for oil around 4k a year current house is older.

In order to give you a educated answer, we need the actual cost per gallon for the fuel in question. I assume since you are building your home, you new home will be much better insulated than your current home which have a direct impact on how much fuel you use to heat your home. I have no experience with spray on insulation, however my understanding it is better than fiberglass assuming it is applied correctly.

Oil price/gal, propane price/gal, electric price/KWH...

Propane would be a better choice if you like a cooking with a gas stove versus electric. The propane will also allow you to be used for the hot water heater, and clothes dryer. If there is any chance in the future you will have the ability to connect to natural gas, then the conversion from propane to gas would be fairly easy and expensive.

Another option is to install a heat pump if you are OK with an all electric home. Depending on your electric rate it could have the lowest heating cost. This would eliminate storage tanks and the annual cost of cleaning and servicing an oil fired furnace.

OK. So given these two options...

Fuel oil produces about 139,400 btu/gallon and most new fuel oil furnaces are running about 85% efficiency so you really get about 118,500 btu/gallon.

Propane produces about 91,600 btu/gallon and most new propane furnaces are running about 94% efficiency you you really get about 86,104 btu/gallon.

Since fuel oil has been cheaper per gallon in Rhode Island for 540 out of the last 635 months and it produces 38% more btu/gallon... I am going to go with fuel oil.

I think you are limiting your options unnecessarily. I would suggest that you investigate a dual fuel heat pump or a ground source heat pump. Odds are a dual fuel propane heat pump will reduce your costs significantly while also keeping indoor combustion to a minimum. A GSHP could eliminate indoor combustion but it is hard to comment without further information.

ETA: If you like cooking on propane then get propane also... Propane tanks are dirt cheap.

It doesn't matter what the current price of propane and fuel oil are, as they both fluctuate, sometimes wildly. I would choose propane, but if I were building new and didn't have access to natural gas, I'd have a bunch of solar panels and do an electric system: either air to air heat pumps or air to water (geothermal).

I would never use oil, no matter what the cost! Electric heat pump with propane (dual fuel) auxiliary/backup is what I would get in your situation. Build the house super tight with good draftproofing and insulation and this should really cut down your fuel consumption.

So I looked it up and electricity is 20 cents a kwh. I suspect heat pumps are not particularly common - especially since RI ranks as the 5th lowest state in electricity use.

That being said, heat pumps are still the way to go with new construction. Money should go into insulation/wall construction, not burying tanks. Fiberglass has a role as does spray foam. There are far more questions to ask than that.

In your climate, without access to NG, you should use rigid foam on top of sheathing. That beats anything else because it is a continuous layer - not broken up by wood. You still do typical cavity insulation - usually not spray foam. Do that well and your heating bills will be low regardless of fuel.

https://www.maine.gov/energy/fuel_prices/heatcalculatorMEv3_1.xls

Use this for interactive calculator

Propane vs oil vs strips vs heat pump, very revealing

In your location and in your shoes, I'd probably go with an air source heat pump with an oil or propane secondary system for when it's really cold. If the house is sited away from trees and gets good light, including a moderately sized solar cell system is probably also a good idea. You won't get much production in the winter, and especially not if it's snow covered, but you'll bank excess summer production as a credit in the system to "use" in the winter.

Without knowing your fuel costs, you can not make an accurate operating cost comparison...

TD

Without knowing your fuel costs, you can not make an accurate operating cost comparison...

The OP is in Rhode Island and the rates are published. Rhode Island is not like California or Texas, the entire state is less than an hour away from anywhere else in the state, so the rates stay pretty consistent.

OP is fortunate in that he can shop for electrical rates

"https://www.maine.gov/energy/fuel_prices/heatcalculatorMEv3_1.xls"

That's very informative. In the absence of natural gas, looks like the electric heat pump is definitely the way to go. Propane is very expensive, hence my earlier recommendation to use it as auxiliary/backup only. Note that without electricity, the propane backup won't help much! So you'll need a hookup to a propane gas log set somewhere in the house for emergencies/power outages..

"Rhode Island is not like California or Texas, the entire state is less than an hour away from anywhere else in the state, so the rates stay pretty consistent"

How does distance affect rates? There are a large number of different electrical districts in California. There are an infinite number of places where one house 2 blocks away from another could be paying rates that are 50% higher than the other. It varies with the location, not distance.

If RI is one of the places where there's competition and consumer choice of power providers, that's a plus. Especially if lower cost power sources are available to be furnished.

How does distance affect rates?

Because the OP's question was about fuel oil or propane. Both fuel oil and propane are delivered products rather than utility services. In a state as small as Rhode Island most providers will deliver state-wide (my propane provider is almost an hour away). In most states, regional price differences can develop, so we can't simply look up the prices for the state without knowing the region.

---

This is further relevant if the OP chooses a dual fuel heat pump, which he probably should in Rhode Island as the dual fuel furnace doesn't add significant installation costs but is significantly cheaper to operate than resistance heat in any state.

For bry

I have not seen current home heating oil and propane prices to make a reasonable comparison.

TD

I have not seen current home heating oil and propane prices to make a reasonable comparison.

The U.S. EIA requires all states to gather and report fuel oil and propane prices weekly. Here is the excel version... https://www.eia.gov/dnav/pet/xls/PET_PRI_WFR_DCUS_SRI_W.xls

Using bry’s link

Cost per 100,000 btu of useable heat

Electric baseboard:$5.27

Heat pump:$1.95

Oil:$2.23

Propane:$3.42

using 3/20/data which is suspect considering the oil market Drop and we know propane pricing follows oil pricing

assumptions

HP 3 COP Eff

oil 82% eff

propane 96% eff

used warm air calculator which is pretty accurate.

for RI, you would need backup heat strips For straight HP.However , owner should look at cold climate heat pumps, Carrier or Bryant.

TD.

"How does distance affect rates?
Because the OP's question was about fuel oil or propane."

Fuel oil is diesel fuel without federal and state road tax cost components. Or the opposite with tax, however anyone wants to think about it. You can drive 5 minutes down the street and find a service station with very different prices than the one you just passed. Or, get on the freeway and drive for 15 minutes and prices can be very different.

Markets are local. I don't buy fuel oil regularly now (though I did once) and my experience was that there could be significant price differences among suppliers. Price differences being more market and seller-driven rather than just purely geographically-driven.

This info site (yes, I noticed the price changes over the months covered) suggests that the situation in Rhode Island isn't as you assume.

New England oil prices

I believe there is a big difference in propane prices if you own your own tank versus using a supplier's tank. If the OP is interested in installing baseboard heating, then on oil fired boiler may be a better option than propane.

For a forced hot air system I don't think a dual fuel system is worth the extra installation cost. You would be better off investing the extra money in a inverter type air sourced heat pump in my opinion. A suspect a ground source heat pump would be at least twice the cost even with the 22% tax credit.

A standard type heat pump will still put out some heat to about 22f dg. Heat pump with an inverter compressor can produce heat to -20f dg Run the numbers on the calculator I sent.

Try this video https://www.youtube.com/watch?v=wCZrBI3PFag

I wouldn't think going dual fuel would make sense on install cost but it would depend on the type of heat pump. When looking at install cost, you have to consider the tank cost, chimney cost, furnace and install. That would seem to be hard to justify on a new tight house in a dual fuel arrangement.

I skipped dual fuel this build when I did it last time. I figured it saved $100 a year and my new house was much tighter so it would have been much less. I assume that the ocean keeps RI mostly above 10F. I grew up on LI and it never got really cold. (I probably thought it was cold until I knew better..)

are those your only options? just curious. we did geothermal in our new home.

An inverter heat pump may be producing heat at -20 F degrees, but the question is what is the heat loss of the house at that temperature? At same temperature the heat loss is greater than what the heat pump can provide.

Does anyone know if an inverter type mini split turns on the heat strips at some low temperature to supplement the amount of heat? After watching the YouTube video I suspect this is what is happening.

"I wouldn't think going dual fuel would make sense on install cost but it would depend on the type of heat pump."

Adding a furnace as a secondary source for a heat pump system in a new build isn't that expensive.

Changing the air handler to a furnace is likely not much of a price increase. You then have to add the plumbing costs of the labor and materials needed for the piping to bring the propane from the tank to the furnace.