Gas vs. electric heating cost: how the comparison actually works

Three machines, three efficiencies

The contest is really three technologies, not two:

• Gas furnace — burns gas in the home. A modern condensing unit converts roughly 92% of its fuel into heat (its AFUE rating); older units run 60–80%.
• Resistance electric — baseboards and electric furnaces convert electricity to heat one-for-one: 100% efficient, which sounds better than it is.
• Heat pump — doesn't make heat, moves it. A typical seasonal COP of about 3 means three units of heat per unit of electricity — 300% "efficiency," the reason heat pumps beat resistance heating everywhere and compete with gas in most states.

The arithmetic, in four lines

For a season requiring H MMBtu of heat delivered (60 MMBtu is a labeled-typical northern-home season):

Everything hinges on your state's two prices — which is why the same house flips winner crossing a state line. The calculator page runs this exact arithmetic with your state's current measured prices and adjustable assumptions.

The pattern in today’s prices

• Heat pump vs. resistance: no contest — the heat pump wins by roughly the COP ratio, everywhere, at any plausible prices.
• Heat pump vs. gas furnace: the live question. Cheap-gas states with expensive power favor the furnace; expensive-gas, cheap-power states (and mild-winter states where the heat pump's seasonal COP runs higher) favor the pump.
• Remember the fixed halves: gas bills carry their own customer charges, and a gas-heated home pays the gas meter's base cost even in summer — a hidden argument for all-electric where prices are close.

Deciding for your own house

1. Pull your two prices — your state's gas $/Mcf and electricity ¢/kWh are on the gas pages and the bill pages, stamped with the data window.
2. Estimate your load — milder homes need less than the 60 MMBtu typical; your winter gas bill (therms × ~0.1 MMBtu) is a direct measure.
3. Run the calculator with honest equipment numbers — an old 70% furnace changes the answer as much as the prices do.
4. Weigh the non-fuel costs: heat pumps cost more installed (rebates move this), and cold-climate models matter where winters go below the pump's comfort range.

Frequently asked questions

Is it cheaper to heat with gas or electricity?

It depends on your state’s price pair and the equipment. A 92% gas furnace is cheapest where gas is cheap relative to power; a heat pump at roughly 300% efficiency wins in many states, especially where gas is pricey or winters are mild. Run your state’s numbers in the calculator.

How much more efficient is a heat pump than resistance heating?

Roughly three times, measured as a seasonal COP of about 3 — three units of heat moved per unit of electricity, against one-for-one for resistance heat.

What is AFUE and COP in plain terms?

AFUE is a furnace’s fuel-to-heat percentage — 92% of the gas becomes heat in the home. COP is a heat pump’s heat-delivered per electricity-used — a COP of 3 delivers three units of heat per unit of electricity.

Does a heat pump work in a cold climate?

Modern cold-climate models hold capacity well below freezing, though seasonal efficiency falls as temperatures drop — which is why the calculator’s COP assumption matters and why the answer is regional.