We use electric. Most people think thats expensive, but we have a thermostat in every room. That way we close off all the rooms we are not using & only heat the ones we are using, usually the liv.rm, kitch & 1 bathrm. I like a fireplace or pot belly stove but I inquired with our insurance company & they said it would raise our homeowners insurance substancially. Outdoor woodburnig furnaces are becoming very popular here in Wisconsin. The unit is outdoors & burns wood sending heat inside thru duct work. Some states do not allow them due to burning ordinances. Our electric water heater is on a separate circuit, so we only turn it on about 20 minutes before we need it & off when we are done. Its stays warm most of the day even when its off. They say your water heater is 15% of your heating bill.I have also converted the house to all flourescent bulbs & reduced the electric bill even more. I would really like to have solar or wind power. Sorry for rambling on.