LP Gas

Opportunities for propane marketers in aging housing units

Photo credit: D-Stanley via Foter.com / CC BY

The U.S. Energy Information Administration (EIA) has released the latest available information for household energy consumption in all regions of the U.S.

In digging through the numbers, I was encouraged by the opportunities to increase propane usage in existing housing units and sobered by the fact that those same opportunities exist for electricity, our No. 1 competitor.

Here are some highlights of the EIA release:

There are 118.2 million housing units in the U.S. More than 68 percent of those homes were built before 1990. Also, 11.8 million, or 10 percent of those housing units, feature propane for one or more uses in the home. (Backyard grills are not counted as a propane usage point for this statistic.)

Overall, that puts propane just ahead of wood usage at 11.5 million housing units and well ahead of fuel oil at 7 million housing units.

It is noted that space heating with wood is a secondary heating source for more than 80 percent of the housing units using wood. As we well know, periods of high propane prices and colder-than-normal temperatures can be factors in wood usage. For obvious reasons, electricity is listed in use in 100 percent of the housing units.

For those of you battling subsidized or unsubsidized natural gas expansion, take note that 83 million households, or 70 percent of all households, have natural gas available in their neighborhoods. The natural gas utilities have only captured 83 percent of those readily available households, leaving another 13.3 million housing units just a service line away from natural gas usage. This statistic is not broken out by current energy usage type, but it wouldn’t be a far reach to say that a large percentage of those available households use propane.

This means millions of homes are sitting within easy reach of natural gas without the natural gas utilities having to run expensive gas main extensions. If your propane company is operating in an affected area, my advice is to boost your customer communications and retention efforts.

Now, let’s look at some of the individual energy usage points in the home by the numbers:

Space heating – 7.8 million, or 66 percent of propane housing units, use propane for space heating. Of that number, 5.6 million, or 72 percent of the housing units, use propane as their primary heat source.

There are two opportunities here to consider. First, more than one-third of those primary heating units (central furnaces, boilers, etc.) are 15 years old or older. Depending on what is going on in your individual market, this can help make the case for you to be in the HVAC business or partner up with someone who is.

Secondly, 2.2 million propane homes use propane as a secondary heat source. These homes are prime prospects for conversions to propane primary heating systems or upgrading their secondary units. There have never been more opportunities to sell gas logs, gas fireplaces, hearth stoves, wall heaters – and the list goes on.

Water heaters – Propane water heaters are being used in 4.6 million, or 39 percent, of all propane households. This number hasn’t changed much over the years, in spite of the significant performance, economic and environmental advantages that propane storage tank and tankless water heaters have over electric models.

That means 7.2 million propane housing units use electricity or some other way to heat their water. More than 40 percent of water heaters in homes are more than 10 years old, which is past the life expectancy of most storage tank water heaters. This is why so many water heater sales are considered by the homeowner to be an emergency replacement due to a leaking tank or other part failure.

Isn’t it time to start promoting and selling propane water heaters or partnering with someone who does?

Clothes dryers – More than 95 million households have a clothes dryer in their home, with more than 30 percent of them being at least 10 years old. Almost 80 percent of those clothes dryers use electricity as their energy source.

Also, there are 1.4 million propane clothes dryers in propane households. Assuming the same overall ratios, that means 8.2 million propane households are using electric clothes dryers.

Maybe selling propane kitchen and laundry appliances isn’t such a bad idea after all.

Cooking – More than 90 percent of all housing units have use of both an oven and a cooktop for cooking purposes. There are 5.4 million propane homes that use propane for cooking, leaving 6.4 million, about 54 percent of all propane homes, that use electricity for cooking. Here again are opportunities for propane companies to promote and sell propane cooking appliances or to partner with someone who does.

Growing gallons never seems easy, whether you are seeking organic growth through adding new customers or working the retention side to preserve and grow what you already have. I know most of you are coming off a warmer-than-normal winter, and propane companies in this situation have historically considered the marketing portion of their budget as the “last to grow and first to go.” Considering the opportunities outlined here, maybe it is time to consider a different approach.


Tom Jaenicke is vice president of propane marketing services at Warm Thoughts Communications, providing solutions for the energy services industry. He can be reached at tjaenicke@warmthoughts.com or 810-252-7855.