The primary difference between a gas forced-air furnace and an electric furnace is the fuel source. Furnaces have used many different fuel sources throughout history. The fuel produces heat, and a blower pushes the heat through a system of vents to different areas of the home.
In the gas unit, when the thermostat signals the need for heat to the furnace, an igniter heats and the gas flow starts. The ignited gas burns in the heat exchanger to produce heat. Air from the blower forces the heat into the ducts, but the heat exchanger ensures any fumes from combustion exit through a vent in the roof. None of these exhaust fumes enter the ducts or the home in a properly working gas furnace.
In an electric furnace, the signal from the thermostat starts electricity flowing through resistance coils. If the home requires more heat, the system operates more coils. The system uses a similar distribution system for the heat it produces.
Electric furnaces are generally smaller and require less initial cost than gas furnaces. However, they are more expensive to operate. In areas where gas is not available to fuel a furnace, installation of a heat pump offers a more economical choice than resistance heating, according to the U.S. Department of Energy. Heat pumps also use the same type of ducted heat distribution system and add the advantage of air conditioning in a single unit.