Is It Expensive to Run an Electric Heater Compared to a Gas One?

Gas furnaces generally cost less to run than electric furnaces. While electric furnaces offer high-efficiency ratings, the cost of electricity makes them more expensive to run.

Resistance heating is highly efficient and nearly all of the electricity used by electric furnaces is converted into heat. However, these ratings fail to consider efficiency losses at the power plant. Because power plants that run on fuels have to first convert the heat generated into electricity, they lose some efficiency along the way. Power lines also lead to worse efficiency. This results in higher electrical costs.

Although falling electrical prices could offset the advantage natural gas furnaces have over their electrical counterparts, natural gas is one of the cheapest sources of electricity, ranking close to coal in terms of cost. In addition, electric furnaces rely on a simple principle to generate heat, so electric furnace resistance are not likely to offer significantly better efficiency in the future.

Heat pumps, however, provide more efficient heating than even gas furnaces in the right climates, and they are often the cheapest option for keeping a home comfortable throughout the year. Heat pumps concentrate the warmth in the air outdoors and move it inside during cool months and reverse this process when it's warm outside. Heat pumps struggle when the temperature drops to around the freezing point and switch to resistance heating if they can't keep up, so they are best in temperate regions.