Commercial Gas vs. Electric Furnace: Which Offers the Best ROI for Your Facility?

The decision you’re actually making

When a facility manager asks about commercial gas vs electric furnace options, the real question is: How do we heat reliably, safely, and affordably for the next 10–15 years? In light-industrial buildings—think small warehouses, fabrication shops, and distribution centers heat usually comes from rooftop units (RTUs) or makeup-air units. These systems must warm big volumes of air quickly, often with lots of outdoor air mixed in. That’s why fuel choice matters. Gas furnaces pair proven burner technology with responsive controls, while electric resistance heat is simple but power-hungry. In practice, both can get the job done, but they don’t cost the same to own. Below, we walk through total cost of ownership (TCO), payback, maintenance, and where each technology shines using straightforward numbers and on-site realities. If you need packaged equipment examples as you read, browse our commercial packaged gas/electric units.

The 15-year TCO picture: gas leads by 31–48%

Over a 15-year lifecycle, gas furnaces deliver a 31%–48% TCO advantage in light-industrial applications. Savings rise with system size because operating hours and load add up. Here’s what that looks like in dollars saved versus electric heat:

• 5-ton: ~$19,866 (≈31% advantage)

• 10-ton: ~$45,489 (≈42% advantage)

• 15-ton: ~$70,247 (≈45% advantage)

• 20-ton: ~$98,016 (≈48% advantage)

Those aren’t edge-case numbers—they reflect typical space and makeup-air heating profiles with standard run hours. Hardware prices between gas and electric RTUs are similar, so the long-term win comes from lower fuel costs and solid serviceability. If you’re comparing models, keep your shortlist tight and consistent by capacity and airflow. 

Operating cost reality: 3:1 fuel cost difference

Annual operating cost is the big lever. Delivered heat from gas runs about $0.93 per 100,000 BTU, while electric resistance heat lands around $2.87 per 100,000 BTU—roughly a 3:1 cost ratio. That gap holds across common RTU sizes when you apply typical U.S. utility rates. A quick sanity check: if your building needs 50 million BTU of heat in a season, gas costs about $465 for the fuel; electric would be about $1,435 for the same heat. Scale that over long winters, and you understand why gas dominates the lifecycle math. Want help translating your utility rates into apples-to-apples heat cost? Our team can assist through the Design Center, or you can start exploring compatible package units and compare nameplate inputs.

Upfront cost and payback: months, not years

Good news: you don’t pay a major premium to choose gas. For typical RTUs, equipment pricing is comparable—differences swing a few hundred dollars either way depending on tonnage. Because operating savings are so strong, gas systems often pay back in 3–6 months. That means your utility savings usually exceed any small price delta before your first cooling season arrives. Cash flow matters more than ever for small businesses, so short payback paired with long-term savings is hard to ignore. If the project budget is tight, consider HVAC financing to spread the initial cost while letting the monthly fuel savings work for you immediately.

“Efficiency” vs. “cost to make heat” (why electric’s 100% isn’t cheaper)

Electric resistance heat converts nearly 100% of electrical energy to heat at the point of use. Gas furnaces in the field typically deliver around 80–95% (85% is a common real-world planning number). So why is gas cheaper to run? Because fuel price per BTU beats electrical energy cost in most U.S. markets. When you multiply efficiency by fuel price, gas still wins on delivered BTUs—often by a lot. That’s the essence of lifecycle economics: efficiency is only half the equation. For projects where heat pumps are also on the table, we’re happy to compare shoulder-season performance vs. backup heat. See our commercial package heat pumps to understand when a dual-fuel or heat-pump-first strategy may make sense.

Maintenance, lifespan, and reliability

Gas systems carry a bit more maintenance—budget about $2,000/year for combustion checks, burners, safeties, and leak inspections versus roughly $1,500/year for electric units. Even with that difference, gas remains far cheaper to operate overall because of fuel savings. Lifespan? Electric heat sections can run ~20 years; gas furnaces typically average ~15 years. Modern gas units, however, feature sealed combustion, integrated controls, and robust safety circuits (CO monitoring and automatic shutoff), which have improved reliability. In practice, service availability and parts access often matter more than nameplate life. Stocking common items—ignitors, flame sensors, and filters—from our Accessories page keeps downtime low. Need quick help on maintenance intervals or codes? 

Makeup-air and rooftop use: where gas really shines

Makeup-air units must heat high volumes of fresh outdoor air. Direct-fired gas is purpose-built for this duty, and indirect-fired gas maintains strong performance in cold snaps. Gas RTUs also respond fast to variable loads think bay doors opening, process exhaust kicking on, or shift changes. Other practical wins:

• No auxiliary heat required for most cold-weather operation

• Integrated gas/electric packages from major brands with established service networks

• Simpler electrical infrastructure than high-KW electric banks

When electric can still make sense

There are cases where electric heat is reasonable:

1. Grid factors: In regions with abundant, low-cost electricity—or where the grid mix is very clean—electric’s operating penalty narrows.

2. Infrastructure limits: If gas service isn’t available or permitting is constrained, electric may be the only path.

3. Runtime profile: Facilities with short heating seasons or minimal runtime may not realize gas’s full savings.

4. Heat-pump strategy: A high-efficiency heat pump can handle most hours, with limited resistance-heat backup.

If you’re on the fence, compare your local utility rates and runtime. Our Sizing Guide plus the Design Center can turn your building data into a clear, numbers-first recommendation gas, electric, or hybrid.

A simple selection checklist you can trust

Use this quick, practical workflow:

1. Define the load: Tonnage, airflow, and makeup-air CFM.

2. Check utilities: Available gas service, electrical capacity, and rate tariffs.

3. Compare lifecycle: Apply the 3:1 fuel cost rule of thumb and your expected runtime.

4. Evaluate payback: If gas is an option, expect months, not years.

5. Plan service: Identify local tech support and stock spares.

6. Validate code items: Venting, clearance, gas train, and combustion air.

7. Finalize package: Accessories, economizers, curb adapters, and controls.

Browse all furnaces and commercial accessories to complete the bill of materials.

Bottom line and buyer tips

For light-industrial RTUs and makeup-air, gas furnaces deliver 31%–48% lower TCO over 15 years, driven by a 3:1 operating-cost advantage. Equipment prices are similar, and payback often lands in 3–6 months. Electric can fit niche cases, but gas is the clear ROI leader where service is available.

Tips:

• Run the math with your rates before you buy; assume ~$0.93 vs $2.87 per 100k BTU delivered for gas vs electric.

• Don’t oversize—better control, lower cycling, less wear.

• Plan maintenance (gas ≈ $2k/yr; electric ≈ $1.5k/yr) and still expect gas to win big on annual cost.

• Stock spares (ignitors, sensors, filters) to prevent downtime.

• Consider make-up separately if your process or ventilation drive high OA.

• Check rebates/tariffs that affect fuel economics.

• Explore heat pumps for shoulder seasons; keep gas for peak cold.

• Need help? Start at our Design Center.