While electric heat is 100 percent efficient at the home, many electricity-generating plants are 70 percent inefficient, as of 2015. Burning fossil fuels, wood or coal for heat tends to create pollution.
Electric furnaces carry 100 percent annualized fuel utilization efficiency ratings, but most generating plants are highly inefficient, wasting more than one-third of the energy they use to create power. At the home, electricity is clean to use, but is one of the most expensive sources of heating fuel. The use of heat pumps, which concentrate heat from outside of the house instead of creating it with resistance heating, improves the efficiency of electric heat while reducing its environmental impact.
Many modern gas and oil furnaces are more than 95 percent efficient. The U.S. government requires an efficiency of more than 80 percent for these units. Choosing a more efficient device helps to reduce the overall environmental impact, while using an older furnace from before the approval of these guidelines increases the impact. With either type of furnace, regular maintenance is essential to decrease emissions.
Wood heat offers a renewable resource, but wood stoves and furnaces are notoriously inefficient. The smoke they produce includes the incomplete products of combustion. Because wood is less expensive than most other heat sources, many users are less concerned about the efficiency of wood heat.