Gas heating costs roughly 50–60% less than electric resistance heating for the average American home in 2026. At current national average fuel prices — $1.05 per therm for natural gas and $0.16 per kWh for electricity — a 2,000 sq ft home in a moderate climate spends about $850/year on gas heat versus $1,800/year on electric heat. The gap narrows only in regions with unusually cheap electricity (under $0.10/kWh) or expensive gas (over $1.60/therm).
However, the full picture is more nuanced. Upfront costs, maintenance, equipment lifespan, and — increasingly — heat pump technology all affect the real total cost of ownership. Here's the complete data-driven comparison.
The Cost-Per-BTU Calculation
Heating fuel costs are most accurately compared by calculating the cost to produce one million BTUs (MMBtu) of useful heat — the heat that actually warms your home after accounting for furnace efficiency.
The critical takeaway from this table: Natural gas heat costs $10–$13 per million BTU. Electric resistance heat costs $47 per million BTU — roughly 3.5–4.3× more expensive. This is the fundamental reason gas heating dominates in most of the U.S. The only electric technology that approaches gas cost-effectiveness is the heat pump, which multiplies electricity's heating value by 2–3× through heat transfer rather than direct resistance heating.
Annual Heating Cost Comparison by Home Size
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State-by-State Cost Comparison
Electricity and gas prices vary dramatically by state. Here's how the gas vs. electric equation plays out across the country.
Where electric heating can be competitive with gas:
- Washington and Oregon — cheap hydroelectric power ($0.10–$0.11/kWh) and moderate winter climates narrow the gap significantly.
- Anywhere with a heat pump — at COP 2.5, a heat pump at $0.16/kWh costs only $18.75/MMBtu, much closer to gas at $10.94/MMBtu.
- Areas without gas service — if running a gas line costs $5,000–$15,000, the economics shift in favor of electric (especially heat pumps).
Total Cost of Ownership: 15-Year Analysis
Annual fuel cost is only part of the equation. You need to account for equipment cost, installation, maintenance, and lifespan.
Over 15 years, a gas furnace system (with separate AC) costs approximately $25,000 — about $40,000 less than electric resistance heating. A heat pump system falls in between at roughly $44,500, but provides both heating and cooling in a single system. In mild climates where cooling costs dominate, the heat pump often wins on total cost.
When Electric Heating Makes More Sense Than Gas
Despite gas's clear cost advantage on fuel alone, there are legitimate scenarios where electric heating is the smarter choice:
No gas line available. Running a new gas line from the street to your home costs $2,000–$15,000+ depending on distance and terrain. In rural areas, it may not be available at all. If you'd need to install gas infrastructure, the upfront cost erases years of fuel savings.
Mild climate with low heating loads. In a home that needs only $400–$600/year in heating (like in the Southeast or Southern California), the difference between gas and electric might be $200–$400/year — not enough to justify gas line costs and annual furnace maintenance.
Heat pump territory. In climates where winter temperatures rarely drop below 25–30°F, a heat pump provides both heating and cooling at 200–300% efficiency. This brings electric heating costs close to gas while eliminating the need for a separate AC system.
New construction efficiency. Highly insulated new construction (R-49 attic, R-21 walls, triple-pane windows, tight air sealing) may need so little heat that the fuel type matters less. Some passive-house-level builds heat effectively with just a mini-split heat pump.
Renewable energy goals. If you have rooftop solar, electric heating can be partially or fully offset by self-generated electricity, making the effective operating cost near zero during sunny months. Gas can never be self-generated at the residential level.
Real-World Comparison Examples
Example 1: The Hendersons — Cleveland, OH (Cold Climate) Home: 2,100 sq ft colonial, built 1978, moderately insulated. Gas rate: $0.90/therm. Electric rate: $0.14/kWh. Annual gas heating cost (96% AFUE): $920. Projected electric resistance cost: $3,700. Annual savings with gas: $2,780/year. Verdict: Gas wins decisively. At this savings rate, even a $10,000 gas furnace installation pays for itself in under 4 years compared to electric resistance.
Example 2: The Nguyens — Portland, OR (Mild Climate) Home: 1,600 sq ft ranch, built 2018, well-insulated. Gas rate: $1.05/therm. Electric rate: $0.10/kWh. Annual gas heating cost (96% AFUE): $440. Projected electric resistance cost: $780. Projected heat pump cost (COP 2.8): $280. Annual savings with gas over electric resistance: $340/year. Annual savings with heat pump over gas: $160/year. Verdict: A heat pump is actually the cheapest option here, thanks to cheap electricity and a mild climate. Gas makes sense only if you already have the infrastructure. Electric resistance is the worst option but the gap is much smaller than in cold climates.
Example 3: The Morales Family — Houston, TX (Mild Climate) Home: 2,400 sq ft, built 2005. Gas rate: $0.95/therm. Electric rate: $0.13/kWh. Annual gas heating cost (96% AFUE): $380. Projected electric resistance cost: $850. Annual savings with gas: $470/year. Verdict: Gas saves money but the total amounts are small because Houston's heating season is short. The Morales family's cooling bill ($1,500+/year) dwarfs their heating bill. A heat pump system that handles both would be the most cost-effective overall solution.
Example 4: The Johnsons — Rural Vermont (Very Cold Climate, No Gas) Home: 1,800 sq ft farmhouse, moderately insulated. No natural gas line available (nearest gas main: 2 miles). Propane rate: $2.75/gallon. Electric rate: $0.20/kWh. Annual propane heating cost: $3,200. Projected electric resistance cost: $4,700. Projected heat pump + electric backup cost: $2,400. Verdict: Without natural gas, the comparison shifts dramatically. A cold-climate heat pump with electric backup is actually the cheapest option, beating even propane. Electric resistance remains the most expensive option.
The Heat Pump Factor: Changing the Equation
Heat pumps are increasingly disrupting the gas vs. electric debate. Modern cold-climate heat pumps (like the Mitsubishi Hyper-Heat or Bosch IDS 2.0) can operate efficiently down to -15°F, which means they're now viable even in northern climates that previously required gas furnaces.
The key metric is COP (Coefficient of Performance) — a heat pump with COP 3.0 delivers 3 units of heat for every 1 unit of electricity consumed, effectively tripling the efficiency of electric resistance heating. At a COP of 3.0:
- Electric resistance at $0.16/kWh → $46.88/MMBtu
- Heat pump at $0.16/kWh with COP 3.0 → $15.63/MMBtu
- Gas at $1.05/therm, 96% AFUE → $10.94/MMBtu
At COP 3.0, a heat pump still costs about 43% more per BTU than gas at national average prices. But in areas with cheap electricity or expensive gas, the heat pump can actually beat gas on operating cost.
The crossover points: A heat pump with COP 2.5 breaks even with a 96% gas furnace when gas costs more than $1.60/therm and electricity is at the national average of $0.16/kWh — or when electricity costs less than $0.07/kWh with gas at the national average of $1.05/therm. These crossover points shift with climate severity, making heat pumps increasingly attractive in mild and moderate climates.
Environmental Comparison
Beyond cost, carbon emissions are an increasingly important factor:
In states with clean electricity grids (Washington, Oregon, Vermont, California), heat pumps produce dramatically less carbon than gas furnaces. Even in coal-heavy grid states, heat pumps at COP 2.5+ produce less CO2 than gas.
Key Takeaways
- Gas heating costs 50–60% less than electric resistance heating at national average fuel prices — about $875/year vs. $1,800–$3,750/year for a typical home.
- Electric resistance heating is the most expensive option in almost every scenario. It makes sense only in mild climates, homes without gas access, or as backup in a heat pump system.
- Heat pumps change the calculus. At COP 2.5+, they bring electric heating costs within 40–70% of gas. In mild climates with cheap electricity, heat pumps can actually beat gas on operating cost.
- Location matters enormously. The gas advantage ranges from 53% savings in Washington (cheap electricity) to 81% savings in Colorado (cheap gas, moderate electricity).
- Total cost of ownership favors gas over electric resistance by about $40,000 over 15 years for a typical home. Heat pump systems fall in between and offer the bonus of efficient cooling.
- The best choice depends on: local fuel prices, climate severity, gas line availability, and whether you also need air conditioning.
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