Looking at homes in the Central and Southern Black Hills, you know winter is real here. Between elevation, wind, and long cold snaps, your heating choice shapes both comfort and monthly costs. If you’re weighing heat pumps against propane, you’re in the right place. You’ll learn how each system performs in Black Hills weather, what it may cost to run, and the practical checks to make before you buy or sell. Let’s dive in.
Black Hills winter realities
Deadwood sits near 4,700 to 4,800 feet, which means colder temperatures and more snow than many plains towns in South Dakota. You can confirm the local context in the climate summary for Deadwood.
Regional heating-degree-day totals are high. Rapid City’s long-term normals show roughly 7,300 annual HDD base 65, signaling a long heating season where efficiency matters. See the NOAA/NCEI station normals for reference.
Many rural and mountain-area homes do not have natural gas service, so propane is common for primary heat. Local reporting highlights that delivered fuel prices can swing, and remote deliveries need planning. Read more in this KELOLAND overview of heating costs.
How each system works
Propane heat basics
Propane furnaces and boilers burn liquid petroleum gas stored in an on-site tank. Each gallon contains about 91,452 Btu of energy, and equipment typically runs 80% to 95% AFUE depending on age and model. See the EIA unit conversions for the underlying numbers.
Heat pump basics
Heat pumps move heat rather than make it. Modern cold-climate air-source heat pumps use variable-speed compressors to keep useful capacity at low temperatures. Efficiency is expressed as COP. A COP of 2.5 means you get two and a half times as much heat as the electricity you put in. Field studies show cold-climate systems can work well in cold regions when sized and installed correctly. Review findings in this DOE/NREL summary.
Performance in deep cold
Cold-climate air-source models are tested to keep strong output near 5°F and operate below freezing. Performance does fall as temperatures drop, and defrost cycles or auxiliary heat can increase consumption during storms.
If your home is very exposed or you like higher indoor setpoints in cold snaps, consider a hybrid system. Many Black Hills owners pair a heat pump with a propane furnace as backup, or consider ground-source heat pumps for steadier winter efficiency. The DOE’s testing and certification language gives helpful context on cold-climate ratings; see the Federal Register summary.
What it costs to heat
Electricity in South Dakota is relatively inexpensive compared to many states. The EIA reported a mid-2025 average residential rate near 14.2 cents per kWh. Check the latest on the EIA South Dakota profile and confirm your exact local tariff.
Propane pricing varies widely by season, delivery, and location. For example math below, we use $2.75 per gallon as a mid-range delivered price. Always get current quotes for your address.
The quick math you can use
- Key conversions: 1 kWh = 3,412 Btu; 1 gallon propane = 91,452 Btu. Source: EIA conversions.
- Electricity cost per million Btu (before COP): dollars per kWh times 293.07.
- Propane cost per million Btu (before AFUE): dollars per gallon times 10.93.
- Delivered heat cost:
- Propane furnace: propane dollars per MMBtu divided by AFUE.
- Heat pump: electricity dollars per MMBtu divided by seasonal COP.
Worked example for the Black Hills
- Electricity: $0.1423 per kWh → $41.70 per MMBtu before COP.
- Heat pump with seasonal COP 2.5: $41.70 ÷ 2.5 ≈ $16.68 per MMBtu delivered.
- Propane at $2.75 per gallon: $2.75 × 10.93 ≈ $30.06 per MMBtu before AFUE.
- 90% AFUE propane furnace: $30.06 ÷ 0.90 ≈ $33.40 per MMBtu delivered.
In this example, the heat pump is significantly cheaper per unit of heat. During extreme cold, heat pump COP will drop, which narrows the gap. If propane prices rise, the heat pump advantage widens.
Sensitivity table you can mirror
These are example numbers using the same electricity rate and propane furnace efficiency as above. Plug in your actual rates and quotes.
| System and assumptions | Delivered cost per MMBtu |
|---|---|
| Heat pump, COP 2.0 | $20.85 |
| Heat pump, COP 2.5 | $16.68 |
| Heat pump, COP 3.0 | $13.90 |
| Propane at $2.25/gal, 90% AFUE | $27.32 |
| Propane at $2.75/gal, 90% AFUE | $33.40 |
| Propane at $3.50/gal, 90% AFUE | $42.51 |
Practical local factors
- Propane logistics. You need on-site tank space, safe placement, and regular deliveries. Remote or steep access can affect scheduling and price. Many Black Hills homes use this setup, so plan your deliveries and keep records. See local context in KELOLAND’s coverage.
- Electrical capacity. Heat pumps need reliable power and often a dedicated circuit. Older panels may require upgrades. Ask your utility or electrician to confirm service capacity before you commit.
- Ducts and layout. Ducted systems must be tight and sized correctly. Ductless or multi-split setups can work well in cabins or additions.
- Maintenance. Combustion equipment needs regular venting and safety checks. Heat pumps benefit from filter changes and seasonal coil and controls checks so defrost and backup heat run as intended.
Reliability and outages
Heat pumps require electricity. If outages worry you, plan a layered approach. Options include a hybrid heat pump plus propane furnace, a properly sized generator, or a wood backup. If you go the generator route, coordinate the load plan with your electrician and HVAC installer so the system starts and runs safely in cold weather.
Incentives and timing
Federal incentives changed in 2025. The Energy Efficient Home Improvement Credit under IRC §25C and related provisions were scheduled for termination or restriction for property placed in service after December 31, 2025, under mid-2025 legislation. Review the IRS page for the Energy Efficient Home Improvement Credit and the Congressional Research Service summary for the law changes (CRS overview). Program details, caps, and deadlines matter, so confirm the rules at the time of installation and consider speaking with a tax professional.
Utilities and co-ops sometimes offer rebates or financing for qualifying heat pumps. Offerings change, so check your current utility’s program page before you bid your project.
Buying or selling with either system
Most buyers value reliable, efficient, and well-documented heating. If you are selling, make it easy for buyers to understand the system and costs.
- For propane systems: note tank ownership versus lease, capacity and location, last fill dates, average winter price paid, recent service records, and the most recent combustion-safety check.
- For heat pumps: list the manufacturer and model, cold-climate rating, installation date, any electrical upgrades, duct improvements, backup heat details, and the latest maintenance report. If the home has a hybrid setup, highlight it.
How to choose for your property
- Start with the envelope. Insulation and air sealing make any system perform better in Black Hills weather.
- Confirm your loads. Ask a qualified installer for a room-by-room Manual J load calculation and a Manual S equipment selection sized for local design temperatures.
- Check your panel. Verify electrical capacity if you are adding a heat pump.
- Compare the math. Use your actual electric rate and propane quotes with the quick formulas above. Ask installers to provide estimated seasonal COP for your model.
- Plan for cold snaps. Decide if you want a hybrid system or another backup strategy.
- Document everything. Keep quotes, model numbers, commissioning reports, and maintenance records. This helps with resale and warranty.
Ready to weigh your options for a specific Black Hills home or acreage? Let’s talk through costs, comfort, and resale so you can move forward with confidence. Reach out to Jennifer Landguth for local, construction-smart guidance.
FAQs
Will a heat pump keep up in Deadwood winters?
- Modern cold-climate air-source models are designed to retain useful capacity at low temperatures and can work well in the Black Hills when properly sized and installed, though backup heat planning is smart for extreme cold; see DOE/NREL validation in this summary.
How do heat pump and propane costs compare in the Black Hills?
- Using EIA’s SD average electricity price near 14.2 cents per kWh, and a propane example at $2.75 per gallon with a 90% AFUE furnace, a heat pump at COP 2.5 can be roughly half the cost per MMBtu; run your own numbers using the EIA conversions.
What if the power goes out?
- Heat pumps need electricity, so consider a hybrid setup with a propane furnace, a generator, or a secondary heat source and coordinate sizing and wiring with your installer and electrician.
Are there incentives for heat pumps right now?
- Federal §25C incentives were scheduled for termination or restriction after December 31, 2025, under mid-2025 legislation; check the IRS program page and the CRS update before you buy.
Do heat pumps reduce on-site emissions?
- Yes, heat pumps have no on-site combustion emissions; propane systems emit CO2 at the appliance, while total emissions for electric systems depend on the grid mix; see EIA emissions factors here.
