Furnace Buying Guide Gas vs Electric: Compare Costs, Efficiency, and Comfort

The short answer: which one costs less to run?

If you’re heating a whole home in a cold climate, a gas furnace usually wins on operating cost. That’s because natural gas is typically cheaper per unit of heat than electricity. We see it day after day on installs and utility bills. For example, running an electric furnace (10,000 watts for 8 hours) can cost about $12–$15 per day depending on your local kWh rate, while a gas furnace using about 1 therm in 8 hours averages ~$11.72 nationally. Electric can still be the right call if your winters are mild or you only heat occasionally. The “best” choice comes down to your rates and your runtime and we’ll show you how to do that math like a pro.

Why your neighbor’s costs aren’t your costs

Heating bills swing a lot by utility region. Electricity is priced in cents per kWh; gas is priced per therm. Those numbers vary by state and even by town. Two homes with identical furnaces can have very different bills just because their rates differ. For instance, an electric furnace running 10 kW for 8 hours costs about $12.14/day at 15.17¢/kWh (think parts of Indiana) but ~$15.25/day at 19.06¢/kWh (parts of Michigan). Same runtime, same house—different bill.

When you compare gas vs. electric, you’re really comparing your local prices and how much you’ll run the system. That’s why we always start with bills first, hardware second.

Need help decoding yours? Our Help Center has friendly guides, or you can message us we read real bills every day.

A real-world day of heating (numbers you can feel)

Let’s say you run heat 8 hours on a typical winter day. Here’s what that looks like with the sample rates above:

• Electric furnace (10 kW for 8 hrs)

• At 15.17¢/kWh: ~$12.14/day

• At 19.06¢/kWh: ~$15.25/day

• Gas furnace (≈1 therm for 8 hrs)

• At ~$1.465/therm: ~$11.72/day

That’s why gas often wins for whole-home heating in colder regions. But numbers flip fast if you run heat less. If you only kick the system on for an hour or two in a mild climate, the total daily spend on electricity can be modest, sometimes simpler and cheaper than pulling a gas line.

Climate and usage: the two levers that matter most

Think of your choice like this: Rates × Runtime = Reality.

• Cold climate + long runtime: Gas usually costs less to operate.

• Mild climate + short runtime: Electric can be perfectly sensible.

• No gas service available: Electric (or a heat pump) avoids the cost and permitting of a new gas line.

Also consider how you heat. If you’re only warming one room or a mother-in-law suite, whole-house gas might be overkill. A small electric solution—or a ductless heat pump could match usage better.

Not sure what size you need? Our quick Sizing Guide helps you avoid oversizing (a quiet bill killer).

Upfront vs. ongoing: what you’ll pay now and later

Here’s the honest tradeoff we see on installs:

• Electric furnaces: Lower upfront cost, simpler install, fewer venting requirements. But in many regions, higher ongoing cost because electricity is pricier per unit of heat.

• Gas furnaces: Higher install and maintenance (venting, combustion air, annual tune-ups). But lower fuel cost usually pays you back in cold climates.

If cash flow is tight, spreading the purchase out can help. We offer HVAC financing options, and our team can ballpark total cost of ownership for your zip code.

The 5-minute cost worksheet (copy this)

Grab your latest bills and a calculator:

1. Find your rates:
   
   

• Electricity: ¢/kWh

• Gas: $/therm

2. Estimate daily runtime on a typical winter day (check your thermostat history or take a guess).

3. Electric furnace cost/day = Furnace kW × Hours × (¢/kWh ÷ 100)

• Example: 10 kW × 8 hrs × $0.1517 ≈ $12.14

4. Gas furnace cost/day = Therms used × $/therm

• Rule of thumb here: example above assumes ≈1 therm/8 hrs → ~$11.72 at $1.465/therm.

5. Scale to month/season: Multiply by days you expect similar usage.

When an electric furnace is the smart pick

Choose electric when simplicity, low hours, or no gas line are your realities. It’s clean to install and easy to service. For spaces you heat only sometimes bonus rooms, workshops, or additions, electricity can be the budget-friendly choice over the year because you’re not running it much.

If your winters are mild, also consider ductless heat pumps. They’re electric too, but far more efficient than electric resistance heat. 

Browse our DIY ductless mini-splits for room-by-room control.

When gas is your best friend

If you’re in a snow-boots climate and the heat runs daily, gas makes bills much easier to live with. Combustion furnaces deliver steady, whole-home heat without spiking your electric meter. Pair gas with a properly sized blower and good ducts and you’ll get quiet comfort at lower daily cost.

If you’re replacing an older gas furnace, don’t just match size. Re-check load with our Sizing Guide. Oversized furnaces short-cycle and waste gas.

Installer notes from real jobs (the “hidden” cost drivers)

From the field, three things move bills more than folks expect:

• Ductwork losses: Leaky or undersized ducts make any furnace look bad. Seal and balance them.

• Filtration & airflow: Dirty filters or restrictive grilles make the blower work harder. Use the right MERV and change on schedule.

• Thermostat strategy: Smart schedules cut runtime without feeling colder.

If you’re planning a changeout or new system, our Design Center can help you pick the right pairings (coils, air handlers, line sets). 

Simple tweaks that lower any heating bill

You don’t have to buy new gear to save money. Try this short list first:

• Dial-in schedules: Lower setpoint 2–3°F when you’re asleep or away.

• Seal obvious leaks: Weather-strip doors and attic hatches.

• Swap filters on time: Mark it on your calendar.

• Tune once a year: Gas furnaces especially need combustion checks.

Need parts? Browse accessories like thermostats and filters.