The answer to this question is entirely dependent on where you live, the type of heating system you have and the size and condition of your home. Simple economics dictates that the more you use the greater your return on fuel saving investments. First we have to consider the cost of fuel, second its conversion into usable heat and finally the delivery of that heat to your living space.

To start, one has to know the cost-per-therm of all available heating fuels. See my “Factoid” on " How to compare the cost of different heating fuels." The list can be long or very short from a practical standpoint. Though we would all love to be totally Green, most of us just can't afford it. Using less is the best most can do, e.g. lowering thermostats and wearing sweaters.

For those lucky few who have the means to be really Green, the options can be quite intriguing; and complicated.

Lets start with a fuel available to nearly everyone; electricity. Keeping in mind that electricity is a highly refined (meaning generally expensive) it is rarely the first choice for heating systems in cold climates (lets agree that cold climates require more heating than cooling in any given year). Resistance heating (forced air furnaces, electric baseboard, electric boilers) usually means some type of direct resistance heater. The conversion rate is supposed to be 100%. But cost efficient? not exactly. The cost of raw fuel (transported, processed, burned, converted and transmitted to your home) drives the cost of electricity higher than most of the other fuels readily available to most of us.

On the other end of the spectrum are ground source heat pumps. They too use electricity but can convert ground temperature to warm air or water based heating systems, effectively turning 1 unit of energy into three! This system may use considerable resistance heating to back up the ground source when the weather is extreme. Ground source heat pumps (often erroneously called "geo-thermal" - think "Old Faithful") use the energy trapped in the earth to heat homes. The cost of these super-efficient heating and cooling appliances can be 4 times greater than a conventional condensing gas-fired systems. One can argue for heat pumps as a good hedge against volatile fuel prices.

As we compete for oil with the rest of the world, heating oil, though relatively unrefined, is expensive for its world demand as it is used for a host of industrial applications, transportation AND home heating. It can be converted by a condensing appliance to 90% efficiency but rarely is, suffering in the non-condensing range around 86% AFUE.

Propane is also a byproduct of refining crude oil and has taken some considerable jumps in recent years. Though it burns fairly cleanly and can be burned in condensing appliances, it is not as clean as natural gas and suffers considerable cost of transportation. In many areas of the country it now costs less per therm to buy electricity than propane. Keeping in mind, propane has to be burned and the AFUE of the appliance and distribution system dictate just how much energy is converted to usable heat.

Wood is readily available in many parts of North America and is a renewable (though no longer considered Green for its high carbon output). The efficiency then is dependant on the cost of cutting, gathering, transporting, storing and burning. Most wood fireplaces, furnaces and boilers are very inefficient (50% or more of the woods energy value being lost up the chimney) but newer "gasification" wood appliances (small stoves, fireplaces, furnaces and wood boilers) which use the equivalent of your car's catalytic converter to "re-burn" those nasty byproducts of combustion, now boast upwards of 80 percent efficiency! This is huge, for what are collectively known as solid fuel burners.

Natural gas then is the obvious choice for heating most homes in North America. The reason for this is part physics and part economic. First, what we call natural gas (methane) is a colorless, odorless gas that does occur naturally underground and is a byproduct of various drilling, mining and refining operations. It has in fact been "burned off" as a nuisance for many decades.

Natural gas is easy to process and transport. It is local, meaning we have it available by pipeline in most of North America, making it relatively cheap. It is also efficient, as it burns cleanly (having half the carbon footprint of coal for instance) which also leads to less maintenance for gas burning appliances (as compared to fuel oil or wood lets say).

Wind and solar may be used to produce electricity, but at this time neither can be reliably or affordably enlisted to heat homes in cold climates. Unfortunately resistance electric heat is often used to "back up" these otherwise Green heat sources, when the winds don’t blow and the sun don't shine. Of course, wind energy makes more sense in Kansas than Kentucky and solar naturally works better in Arizona than Alaska.

Distribution efficiency must also be considered. As water is 3500 times more efficient at transporting heat from source to living space, it is my personal favorite for space heating. Boilers then are the answer for new construction and some renovation. Hydronic Radiant Floors are naturally the ultimate in comfort and efficiency.

Natural gas boilers are available up to 95% AFUE and matched with radiant floors are hard to beat for return on investment. Though water-to-water heat pumps are technically more efficient, they are also more than double the cost of installation. So matching low temperature radiant distribution systems such as the old-fashioned cast iron radiator or the newer radiant floor designs is hard to beat.

Integrated ModCon boilers use indirect fired water heaters to make domestic hot water and space heating more efficient than ever.

The latest and sure to be one of the most popular combination (forced air) heating and cooling appliance is the re-designed air-to-air heat pump. This appliance like its cousin the ground source heat pump uses refrigerants to convert the latent energy in the air to usable heating and cooling for home in most climates where cooling is considered a necessity. These appliances may use electric resistance, propane or natural gas as a backup when weather conditions dip below freezing.

So the answer to your question depends on where you live and what you are willing to invest for the sake of efficiency or the environment.