Electric vs Gas Furnace: Cost to Buy, Cost to Run and Which Fits Your Home
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By
Michael Haines
- Nov 19, 2023
Equipment price, operating cost from your own utility rates, comfort, safety and lifespan, with one worked example you can run on the back of your own bill.
Last updated October 8, 2026 | By Michael Haines, Founder, AC Direct
An electric furnace costs less to buy and install and needs no gas line or vent, but in most of the country it costs more to run, because a unit of heat from electricity usually costs more than the same heat from natural gas. A gas furnace costs more up front and runs cheaper where gas service exists. Compare with your own rates: one therm of gas equals about 29.3 kWh of electricity.
- Electric furnaces run near 100% efficient, but efficiency is not the same thing as cheap to run.
- Gas furnaces come in two efficiency tiers: non-condensing (about 80% AFUE, vented in metal) and condensing (Category IV, 90%+ AFUE, vented in PVC), per PNNL.
- The operating-cost winner depends on your local cents per kWh and dollars per therm, not on a national average.
- Gas delivers warmer air at the register. Electric delivers cooler, longer-running air.
- In most all-electric homes, a heat pump with electric backup beats a straight electric furnace on running cost.
- Gas furnaces produce carbon monoxide as a combustion byproduct and should get annual inspection and CO alarms per AHRI; electric does not have combustion.
This piece walks through buy price, install reality, running cost (with the math on your own bill), comfort, safety, lifespan, and the one place a heat pump quietly changes the entire answer. For the broader cost picture across all fuel types, our overview of new furnace costs is the companion piece to this one.
If you already know you want gas or you already know you want electric, AC Direct ships both: our gas furnaces catalog covers 80% and 95%+ AFUE Goodman and ACiQ units, and our Goodman electric furnaces page runs the full capacity range. Equipment ships direct; your installer handles the install.
How do electric and gas furnaces make heat?
An electric furnace makes heat by running current through resistance coils, like a very large toaster, and a blower pushes air across those hot coils into the duct system. A gas furnace burns natural gas in a sealed chamber, heats a metal heat exchanger, and the blower pushes air across the outside of that exchanger. Combustion gases vent outside.
The electric side
Resistance heat has essentially no flue loss at the appliance, which is why the EIA's residential equipment cost dataset lists residential electric furnaces at a minimum of 98.3% AFUE. There is no exhaust vent to the outdoors. The energy losses in the electric system happen upstream, at the generating plant, and show up in your rate rather than in the furnace's AFUE.
The gas side
Gas furnaces come in two mechanical families. Non-condensing units vent hot flue gas through a metal pipe and are rated around 80% AFUE. Condensing units (Category IV) run above 90% AFUE by pulling a second round of heat out of the flue, which cools the exhaust enough that water vapor condenses out of it, and these units vent through PVC and produce an acidic condensate stream that has to drain, per the PNNL Building America combustion-furnaces guide.
Which brings us to the install, where the two paths diverge well before the furnace ever fires.
Which costs less to buy and install?
Electric furnaces cost less to buy and are mechanically simpler to install: no gas line, no vent pipe, no combustion air requirement, no condensate drain. Gas furnaces cost more up front, and the install adds gas-piping work and a venting system. The honest asterisk on electric is the service panel. A whole-house electric furnace draws tens of kilowatts of resistance load, and that is a serious draw on an older electrical service.
What electric actually needs
A dedicated circuit sized for the heat kit, which for a 20 kW furnace at 240 V means roughly 100 amps of dedicated capacity. In homes with a 100 or 150 amp service already crowded by an electric range, dryer, and water heater, that often means a panel upgrade or a service entrance upgrade. A swap that looks straightforward can turn into a serious electrical project before the furnace is even uncrated. Ask the electrician for a load calculation before you buy.
What gas actually needs
A properly sized gas line to the appliance, a vent system matched to the furnace's efficiency category, and combustion air. A non-condensing furnace vents through metal flue pipe with specific clearance to combustibles. A condensing furnace vents through PVC and produces condensate that has to be trapped and drained, per the PNNL guide linked above. In cold climates that drain has to be routed where it will not freeze. None of this is exotic, but none of it is free.
Once the equipment is in and vented, the question moves from the invoice to the utility bill, which is where the two technologies really separate.
Which costs less to run with your rates?
The honest answer is "whichever delivers heat cheaper per kWh of heat at your address." Electric furnaces burn electricity measured in cents per kWh and convert nearly all of it to heat. Gas furnaces burn natural gas measured in dollars per therm and convert roughly 80 to 98% of it to heat depending on model and category. To compare them apples to apples you convert both to the same unit, delivered heat, and the equivalency you need is: one therm equals 29.3 kWh of heat energy.
The math on your own bill
Three steps, and all three numbers come from your utility statements and your furnace nameplate.
Total electric bill divided by total kWh. Include delivery charges and taxes, not just the supply rate. For an electric furnace, this number is also your cost per kWh of delivered heat, because the furnace is essentially 100% efficient.
Total gas bill divided by therms used. Then divide that number by your furnace AFUE as a decimal. A one dollar fifty therm through a 95% AFUE furnace delivers heat at 1.50 divided by 0.95, which works out to about one dollar fifty eight per therm of actual heat.
Divide the delivered cost per therm by 29.3. One dollar fifty eight divided by 29.3 kWh gives roughly five and a half cents per kWh of delivered heat. Now compare that to your electric rate per kWh. Lower wins.
A worked example
Assume your electric rate is fifteen cents per kWh and your gas rate is one dollar fifty per therm, which are plausible for a mixed-fuel home in 2026 but are not meant to be your rates. With a 95% AFUE gas furnace, delivered gas heat lands near five and a half cents per kWh. Electric delivered heat lands at fifteen cents per kWh. Gas runs about one third the cost. Flip those rates (cheap electricity, expensive gas, which does happen in parts of the Pacific Northwest and Quebec) and the answer inverts. There is no national winner. There is only your rates.
Running cost is only half of what you live with every day. Comfort is the other half, and the two technologies do not feel the same at the register.
Which keeps the house more comfortable?
Gas furnaces deliver warmer air at the supply register, typically in the 120 to 140°F range, which feels like heat the moment it hits your hand. Electric resistance furnaces deliver air closer to 90 to 105°F. Both will hold the thermostat setpoint. Only one of them will feel like it is actively heating the room, and that is a real comfort difference even though the physics of the two meeting the setpoint are identical.
Why the register temperature differs
A gas burner runs hot. The exchanger it heats runs hot. Air moving across that exchanger picks up a lot of temperature in one pass. Electric resistance coils run cooler per square inch of surface, so the air leaves cooler and the system runs longer to deliver the same total heat. Longer cycles, more even temperatures, but the "warm blast" people associate with central heat is not there.
It is a common complaint from people who switch from gas to electric, and from gas to a heat pump, for the same reason. The thermostat is not lying. The register is doing exactly what the physics requires. Expectations are the thing that needs adjusting.
How do safety and maintenance compare?
Electric furnaces have no combustion, so there is no carbon monoxide risk from the appliance itself. Gas furnaces produce CO as a combustion byproduct, and the AHRI gas furnace safety brief recommends annual inspection by a qualified technician and CO alarms in the home. Combustion appliances carry that annual-inspection obligation; electric heat kits do not.
Electric maintenance
Change the filter, keep the return path clear, listen for the blower, check the wiring connections at the sequencer and the heat-strip terminals once a year because resistance heat pulls serious amperage and loose lugs eventually arc. That is largely it. No burners, no draft inducer, no flame sensor, no condensate trap.
Gas maintenance
A real annual visit on a gas furnace includes a heat exchanger inspection for cracks, burner cleaning, flame sensor cleaning, draft inducer check, flue inspection, gas pressure verification, and on condensing units a condensate trap and drain check. CO alarms on every floor, batteries fresh. None of this is scary; all of it matters.
Lifespan
Residential gas furnaces have a documented median lifetime around 22.6 years and a mean around 23.6, per the PNNL/ORNL appliance lifetime study, with the usual caveat that neglected equipment dies faster and well-maintained equipment lasts longer. Electric furnaces have fewer moving parts and no combustion stress, so a straight electric furnace that gets filters changed will typically match or outlast a gas unit. The failure modes are different (burned contactors and sequencers vs cracked exchangers and failed inducers), but the calendar is similar.
Where does a heat pump fit in?
In most all-electric homes a heat pump with electric resistance backup beats a straight electric furnace on operating cost by a wide margin, because the heat pump moves heat instead of making it. Cold-climate heat pumps evaluated in the PNNL cold-climate heat pump field study maintained COPs above 2.1 to 2.4 at 5°F, operating at more than double the efficiency of electric resistance heat at the same outdoor temperature.
What that means for the comparison
If you were about to install an electric furnace because you have no gas service, stop and price a heat pump instead. The equipment costs more up front, but the ACEEE analysis of residential heating options frames the standard tradeoff: heat pumps carry a higher first cost and lower operating cost, especially in homes where the alternative is electric resistance.
Two common configurations
In an all-electric home, the standard arrangement is a heat pump matched to an air handler with built-in electric heat strips for backup. The heat pump does the work on all but the coldest days, and the strips (functionally, a small electric furnace inside the air handler) carry the house through the cold snap. If this is new terminology, our breakdown of furnace vs air handler explains what lives in that cabinet. In a home with gas service, a heat pump paired with a gas furnace (dual fuel) lets the system automatically hand off between electricity and gas based on which is cheaper to run at the current outdoor temperature. The deeper mechanics of that choice sit in our heat pump vs gas furnace cost comparison.
Which should you choose?
Pick gas if you already have gas service and your gas-vs-electric math (above) shows gas delivering heat cheaper per kWh, which it does in most of the country. Pick electric if you have no gas service, your winters are mild, and you cannot justify the first cost of a heat pump, or if you need the simplest possible appliance. Pick a heat pump (with either electric or gas backup) if your winters are long enough that the running-cost difference pays back the higher first cost, which is true in more homes every year.
Side by side
| Factor | Electric Furnace | Gas Furnace |
|---|---|---|
| Equipment cost tier | Lower | Higher, especially condensing (90%+) models |
| Install needs | Large dedicated electrical circuit sized to the heat kit; often a panel or service upgrade on older homes; no gas, no vent, no condensate drain | Gas line, sized vent (metal flue for non-condensing units, PVC for condensing Category IV per PNNL), combustion air, trapped condensate drain on condensing units |
| Operating cost driver | Cents per kWh of electricity | Dollars per therm of natural gas, divided by AFUE |
| Efficiency | 98.3% AFUE minimum per EIA | About 80% AFUE for non-condensing, above 90% for Category IV condensing per PNNL |
| Heat at the register | Cooler supply air (90 to 105°F typical); longer cycles | Warmer supply air (120 to 140°F typical); shorter cycles, more "warm blast" |
| Safety considerations | No combustion, no CO risk from appliance; large electrical load must be properly wired | Combustion byproducts including CO; annual inspection and CO alarms recommended per AHRI |
| Typical lifespan | Comparable to or longer than gas; fewer stressed components | Median around 22.6 years per PNNL/ORNL, with maintenance |
The decision in three lines
Have gas service and cold winters: a 90%+ gas furnace is usually the right answer, and often the cheapest to run. No gas service and mild winters: an electric furnace is defensible, especially if your electrical panel already has the headroom. No gas service and any winter you have to actually think about: price a heat pump before you commit to resistance heat, because the operating cost gap is wide and permanent.
One more honest note. If you are specifically running the numbers on a bigger electric furnace, the install economics in our breakdown of electric furnace installation cost are worth reading before you commit. If you are weighing a gas furnace against a propane tank because gas service does not reach your lot, our propane furnace comparison covers that split. And if your real question is "how much does the furnace itself actually pull from the panel while it's running," our breakdown of how many watts a gas furnace uses handles the electrical side of a gas unit, which surprises a lot of people.
Frequently Asked Questions
Is an electric furnace cheaper than gas?
An electric furnace is cheaper to buy and simpler to install, with no gas line or vent. It is usually more expensive to run than natural gas in most of the country, because electricity typically costs more per unit of delivered heat than natural gas does. Run the therm, AFUE, and 29.3 kWh conversion on your own bills to confirm which wins at your address.
If an electric furnace is 100% efficient, why does gas usually cost less to run?
Efficiency measures how much of the fuel's energy becomes heat in your home. It does not measure the price of the fuel. One therm of natural gas usually costs well under the price of 29.3 kWh of electricity, so even an 80% AFUE gas furnace delivers heat cheaper than a 100% efficient electric furnace in most utility territories.
Does an electric furnace need a special electrical panel?
Often, yes. A whole-house electric furnace commonly draws tens of kilowatts of resistance load, which translates to roughly 100 amps of dedicated circuit capacity at 240 V on larger units. Older 100 or 150 amp panels serving a range, dryer, and water heater may not have the headroom. Ask an electrician for a load calculation before buying.
Why does the air from an electric furnace feel cooler than gas?
Gas furnaces deliver supply air in the 120 to 140°F range because combustion heats the exchanger to very high temperatures. Electric resistance coils run cooler per unit area, so supply air leaves closer to 90 to 105°F. The house still reaches setpoint, but the "warm blast" from the vent is noticeably milder. Longer run cycles are normal.
Is a heat pump a better choice than an electric furnace?
In most all-electric homes, yes, on operating cost. Cold-climate heat pumps in PNNL field testing held COPs above 2.1 to 2.4 at 5°F, more than double the efficiency of electric resistance heat at the same temperature. Equipment costs more up front, but running cost is substantially lower for most of the heating season.
How long does each type of furnace last?
Residential gas furnaces post a median lifetime around 22.6 years per the PNNL/ORNL appliance lifetime study, with filter changes and annual combustion inspection assumed. Electric furnaces have fewer stressed components and often match or exceed that span when filters are changed and electrical connections stay tight. Neglected equipment of either type fails much sooner than published numbers suggest.
