Gas vs. Electric Furnace: Cost, Efficiency & Which to Choose

Gas vs. electric furnace: the short answer

A gas furnace costs more to install but heats cheaper and faster, which wins in cold climates with long winters and affordable natural gas. An electric furnace costs less to buy and install, lasts longer, and is simpler and safer (no combustion), but costs more to run where heating demand is high. For many homes today, a heat pump is a third option that beats both on operating cost.

Quick takeaways:

• Gas: cheaper to run, faster/hotter heat, higher install cost, 15-20 yr life
• Electric: cheaper install, longer life (20-30 yr), no combustion risk, higher running cost in cold climates
• Climate decides it: gas for cold winters, electric for mild ones
• No combustion means electric has no CO risk and no flue
• Consider a heat pump before committing to either

Side-by-side

Operating cost: why gas usually wins in the cold

Although electric furnaces convert nearly 100% of their energy to heat at the unit, electricity costs more per unit of heat than natural gas in most US markets. So in a cold climate running the furnace for months, gas typically produces a lower monthly bill despite the "100% efficient" electric label. Where winters are short and mild - or gas isn't available - that gap shrinks and electric can make sense.

A note on efficiency ratings: gas furnaces are rated by AFUE (80% for standard, up to ~98% for high-efficiency condensing models). Higher AFUE costs more up front but lowers gas use - the heating-side counterpart to SEER2 for cooling.

Install cost and lifespan

Electric furnaces are cheaper to install (no gas line, no venting/flue) and last longer - 20-30 years versus 15-20 for gas - because they have no burners or heat exchanger to fail. See how long a furnace lasts. Gas furnaces cost more to install and require annual combustion and carbon monoxide safety checks, but reward you with lower running costs in cold regions. For current pricing, see furnace repair costs and system replacement costs.

Don't forget the heat pump option

In a growing number of climates, a heat pump heats more cheaply than either furnace by moving heat instead of generating it - and it cools in summer too. In cold regions, a dual-fuel setup pairs a heat pump with a gas furnace for backup, getting the best of both. Federal tax credits up to $2,000 sweeten the heat-pump math. Compare in our heat pump vs. furnace guide.

How to choose

1. Cold climate + affordable gas + long winters? Gas furnace (or dual-fuel with a heat pump).
2. Mild winters, no gas line, or lowest upfront cost? Electric furnace - or better, a heat pump.
3. Want the lowest operating cost and summer cooling too? Price a heat pump first.
4. Whatever you choose, get a proper load calculation and a quality install.

Bottom line

Gas wins on running cost in cold climates; electric wins on install cost, lifespan, and simplicity in mild ones - but before you decide, price a heat pump, which now beats both on operating cost in much of the country.

Choosing a new heating system? Connect with a licensed local pro for a free consultation - honest fuel-type advice, rebates, and financing.