A hypothetical residential building in Albany, New York with a structure heat loss of 870 Btu/hr-°F is considered. The energy requirements for heating such a house by different systems are investigated employing the bin method and a computer program. The systems whose performance are evaluated are: (1) air-to-air heat pump with electric resistance heating backup, (2) gas furnace, (3) oil furnace and (4) electric resistance baseboard. The yearly energy costs for operating these four systems are estimated and compared. It is found that the natural gas heating is the most economical and electric baseboard heating the most expensive. The heat pump is the second most economical with oil heating being very close third. These relative ratings may change if the cooling needs are taken into account, initial costs are amortized or unit energy costs vary.