With rising energy bills, comparing the costs of electric heating and gas heating can be an important decision for homeowners looking to save money. A colder winter and a global energy shock are worrying home heating customers. The U.S. Department of Energy predicts heating bills this winter will rise (opens in a new tab) 28% for natural gas, 27% for fuel oil, 10% for electricity and 5% for propane.
If, like most people, you want to know how to reduce energy costs, is there a difference between electric heating and gas heating, as far as homeowner’s bills are concerned?
Electric heating: running cost
According to the US Energy Information Administration (opens in a new tab), the average cost of electricity in the United States is 16.32 cents per kilowatt hour or kWh. EIA (opens in a new tab) predicts electric heat costs for US homeowners will average $1,359 for the winter of 2022-2023, a 10% increase from last winter.
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In terms of regional differences in the United States, electric heat costs will average $1,400 to $1,700 in all regions except the South, where they will average around $1,250.
The Maine Efficiency Trust (opens in a new tab) provides the following cost breakdown for electric heating systems:
| Fuel type (units) | Cost per unit delivered | Heating system | Annual cost |
|---|---|---|---|
| Electric (kWh) | 0.23 | Geothermal heat pump | $1,681 |
| Electric (kWh) | 0.23 | Heat pump (ductless) | $2,297 |
| Electric (kWh) | 0.23 | Heat pump (ductable) | $2,871 |
| Electric (kWh) | 0.23 | Baseboard | $6,202 |
| Row 4 – Cell 0 | Row 4 – Cell 1 | Row 4 – Cell 2 | Row 4 – Cell 3 |
According to the US Department of Energy, installing a more energy-efficient electric heat pump can significantly reduce energy consumption in your home, compared to traditional electric resistance heating like furnaces and baseboard heaters. The most common type, ducted air-source heat pumps, reduce energy consumption by approximately 50%. More expensive options like geothermal heat pumps can reduce energy consumption by up to 60%. This type of upgrade saves you money on a monthly basis, but you should include significant upfront installation costs as part of your bill calculations.
However, the American Council for an Energy-Efficient Economy reports that heat pumps may not provide enough heat in particularly cold northern regions, requiring alternative fuel sources and higher bills. Additionally, many homeowners may not be able to use the most efficient type of geothermal heat pump, which requires digging a large trench near or under your home, according to the U.S. Department of Energy. (opens in a new tab).
Gas heating: running cost
Energy Information Administration (opens in a new tab) estimates that homes heated with natural gas will spend about $930 this winter, 28% more than last winter. This expected increase comes from both higher anticipated prices and consumption.
The EIA report also shows that gas-heated households in the Northeast and Midwest are expected to pay between $1,000 and $1,100 for the season, depending on colder temperatures and higher demand, while that western and southern households will pay between $700 and $800.
The Efficiency Maine Trust provides the following cost breakdown for gas heating systems:
| Fuel type (units) | Cost per unit delivered | Heating system | Annual cost |
|---|---|---|---|
| Natural gas (thermal) | 1.90 | Natural gas boiler | $2,111 |
| Natural gas (thermal) | 1.90 | Natural gas heater | $2,158 |
| Natural gas (thermal) | 1.90 | Natural gas furnace | $2,349 |
| Row 3 – Cell 0 | Row 3 – Cell 1 | Line 3 – Cell 2 | Row 3 – Cell 3 |
The verdict
Electric heat has higher monthly operating costs than a gas system, according to the most recent US government statistics.
Although electric heat pumps can save you money on even the most efficient gas systems, they involve high installation costs and may not be enough to fully heat your home, depending on your area. And the most cost effective geothermal heat pump systems are not an option for homeowners without land for an underground trench.
In the long run, a well-maintained natural gas boiler system is the most cost-effective option for the average homeowner in the United States.
Whichever you choose, you can also significantly reduce your heating costs by doing a few things.
- If you only use certain rooms in your home, try using spot heating rather than running your entire home system.
- Consider performing an energy audit of your home to identify fixes that optimize efficiency and comfort.
- And, you can insulate your home using the Cut Inflation Act of 2022 energy efficiency tax credits.
For more energy saving content, check out our Home Savings Hub.
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