Gas vs Electric Running Costs: Slash Bills With Smart HVAC Choices

Fuel Units 101: Therms vs kWh

Natural gas is sold by the therm (100 000 BTU), while electricity is billed by the kilowatt-hour (kWh) 3 412 BTU per unit. Put simply, 1 therm ≈ 29.3 kWh. Converting between the two lets you compare apples to apples when you’re crunching load calcs or quoting operating costs.

Keep a cheat-sheet in your truck: kWh × 0.034 = therms and therms × 29.3 = kWh. Handy on walkthroughs when a client asks, “Gas or electric which will cost me less?”

For deeper design work, grab hourly load data from Manual J software and multiply by these factors to forecast seasonal consumption. Need help sizing? The Furnace Outlet’s free Design Center walks you through it step by step.

2025 Energy Prices at a Glance

Average 2025 U.S. residential rates sit at $0.38 / therm for natural gas and $0.13 / kWh for electricity. Yet the range is huge: Idaho hovers near $0.12 / kWh, while Hawaii tops $0.41 / kWh. Gas swings less, but still varies by pipeline access and winter demand.

Match the rate spread to your client’s utility bills before recommending gear. If local electricity spikes, point them toward a 96 %-AFUE furnace from The Furnace Outlet’s gas line-up. In low-electric-cost states, an R-32 heat pump system can out-perform gas year-round.

Heating Loads by Climate Zone

Cold Continental zones rack up 4 000–6 000 heating degree-days (HDD), pushing gas furnaces hard for six months. Mixed climates slide to 2 000–3 500 HDD and give heat pumps room to shine. Hot-humid zones log under 1 000 HDD but see 2 000+ cooling degree-days (CDD) so cooling costs dominate.

In mixed zones, balance point temperature (the outdoor temp where heat-pump output equals building loss) often sits around 30 °F with today’s variable-speed R-32 units. Below that, supplemental heat or dual-fuel—keeps bills in check.

Use local weather files plus duct design data to decide if a straight package AC or a dual-fuel packaged unit gives the best lifetime value.

Gas Furnace Operating Costs

At 96 % AFUE, a gas furnace needs roughly 1.04 therms to deliver 100 000 BTU indoors. Multiply by today’s $0.38 / therm and you spend $0.40 per 100 kBTU. In a 40 MBH design load climate, that’s $4 – $6 per winter day, or $150–$250/month at peak.

Pair a high-AFUE furnace with an ECM blower and a matching R-32 coil to knock another 10 % off fan energy.

Remember ventilation heat loss: adding a $40 smart damper can save more than bumping AFUE from 95 % to 96 % in tightly sealed homes.

Electric Resistance Heat: Hidden Wallet Drain

Electric furnaces convert power to heat at 100 % efficiency, yet electricity’s cost per BTU is often 3–5× higher than gas. A 15 kW furnace draws 15 kWh per hour; at $0.13 / kWh that’s $1.95 / hr or $140–$200/month in mild regions—and over $500 in deep freezes.

Resistive strips should be a last-ditch backup, not a primary heat source, outside of sub-metropolitan condos with ultra-low loads.

If resistance is unavoidable, stage elements and use outdoor thermostats to lock out strips above 35 °F. For retrofits, consider swapping strips for an air handler + heat-pump coil to slash kilowatt draw.

Heat Pumps: Efficiency Game-Changer

Modern R-32 variable-speed heat pumps hit COP = 3.2 at 47 °F and still hold COP ≈ 2.0 at 17 °F. Translating: you get 200–320 % “efficiency” compared to resistance heat. Where electricity is $0.13 / kWh, that’s equal to paying $0.26–$0.42 / therm—often lower than local gas.

Size outdoor units to 120 % of design cooling load; the inverter will throttle down in summer but keeps capacity high in shoulder seasons, minimizing expensive strip heat calls.

Browse The Furnace Outlet’s ductless mini-split lineup for COP data sheets before you spec.

Dual-Fuel Strategies for Variable Winters

A dual-fuel setup mates an inverter heat pump with a 95 %-AFUE furnace. Below the “economic balance point” (often 25–30 °F), controls switch to gas. Above it, the heat pump runs at COP > 2, beating gas on cost.

Use a thermostat with dual-fuel logic, not simple O/B changeover, to avoid staging conflicts.

Field data show dual-fuel trims 15–30 % of annual heating cost in the Midwest. The Furnace Outlet’s packaged dual-fuel units arrive charged and pre-wired, shaving install hours.

Seasonal Efficiency, COP, and SEER2 Explained

• AFUE gauges gas heating over a season.

• COP rates heat-pump efficiency at a point in time (heat out ÷ power in).

• HSPF2 bundles COP over the heating season; SEER2 does the same for cooling.

A heat pump with HSPF2 = 9.5 delivers about 2.8 COP seasonal average. Use Cost = (BTU ÷ HSPF2) × kWh-rate ÷ 3 412 for quick math in the field.

SEER2 testing now uses 0.5 in. w.c. external static—closer to real ductwork losses. Oversized coils or restrictive filters can still drag delivered SEER2 down 10 %.

Point clients to R-32 condensers with matched coils for true nameplate efficiency.

Case Studies: Bills From the Field

Notice the Chicago home’s gas share dwarfs electricity, validating furnace choice. The Atlanta house saves ~$40/month versus its old 80 AFUE + 10 SEER combo. Phoenix shows strip heat rarely runs, so heat pump still rules despite summer spikes.

Forecasting Your Future Costs

Lock future savings by:

1. Mapping rate trends. If your state plans natural-gas decarbonization surcharges, electric could undercut gas within five years.

2. Right-sizing equipment. Every ton oversized chops SEER2 ~5 %. Use Manual S, not rule-of-thumb.

3. Leveraging rebates. Federal 25C credits cover 30 % up to $2 000 on qualifying heat pumps and 97 %-AFUE furnaces.

4. Maintaining airflow. Clean filters and balanced ducts protect both COP and AFUE.

Consult The Furnace Outlet’s Help Center for rebate links and sizing calculators before you pull the trigger.

Ready to Cut Your Monthly Bills?

Compare high-AFUE gas furnaces and next-gen R-32 heat pumps side-by-side in The Furnace Outlet’s catalog, or drop our tech team a line through the Contact Us page. Let’s spec the mix that keeps your crew warm, cool, and on budget all year.