Gas vs. Electric Heating

Written by Gary Foreman

fireplaceNatural gas prices are going up all the time. At what point does it make sense to replace my gas water heater (40 gallon) with an electric one? I live by myself and my July gas bill was $28. I take 1 quick shower a day, do 2-3 loads of laundry a week, and run 1 dishwasher load per week. I also rarely, if ever, use my gas stove during the summer. The same CCF usage last year cost me $11! This is already bare-bones usage. How astronomical is my heating bill going to be this winter? What can do I to save on natural gas?
Columbus, OH

Barbara asks a question that’s on many people’s minds as we head toward winter. How will rising energy prices affect my budget and what can I do to limit the damage? Let’s begin by looking at water heaters and then follow-up with some ideas on reducing energy bills.

Water heaters

The U.S. Dept. of Energy (DOE) says that 14% of our home energy usage is for heating water. By comparison, 44% is for heating and air conditioning. According to the Rocky Mountain Institute over $15 billion is spent by Americans each year to heat water.

Should Barbara consider switching away from natural gas? Probably not now or ever. Generally it has been cheaper to heat water with gas than with electric. In February, 2005 the Metropolitan Utilities District of Omaha NE estimated that an electric water heater cost 75% more to operate than a gas heater.

But that doesn’t mean that Barbara can’t reduce the amount of energy she uses to heat water. The Rocky Mountain Institute claims energy saving techniques can reduce the cost of heating water by two thirds. The four biggest savers are:

  1. Using efficient showerheads,
  2. Washing clothes in cold water,
  3. Insulating the water heater
  4. Lowering the water heater thermostat to 120F

Combining those would reduce a bill by 1/3.

Two of the techniques don’t require Barbara to spend any money. The other two are inexpensive. Installing low-flow showerheads is a do-it-yourself type project. Barbara can put a blanket of R-12 insulation around the water heater herself. She should check the manufacturer, since some recommend against extra insulation.

Although a little more expensive, Barbara might also want to check out the cost of installing a timer on her water heater.

Heating bills

Ok, what about her winter heating bills? Should she consider replacing a gas furnace? Again, probably not.

What makes comparing furnaces hard is getting an apples to apples measurement. DOE estimates that 1 kWh of electricity is worth 3.3 cubic feet of natural gas in terms of generating heat. A common method of comparison translates everything into how much energy is needed to produce a BTU. But even that still just measures heat generation. It doesn’t take into account how efficient the heat delivery system is.

We won’t get into the formula details. If you’re seriously shopping for a new furnace or water heater you’ll need to get estimates based specifically on your own home and lifestyle. That will be better than generic estimate anyway.

Even after the current increase in prices, gas is still cheaper than electric for generating heat. And, electric prices will probably rise, too. About 20% of electricity in the U.S. is generated from natural gas and petroleum. So an increase in those prices will tend to raise electric costs, too.

That doesn’t mean that Barbara is helpless. The DOE suggests an energy audit as a good way to find out where you’re using energy. Often your local power provider will do an audit free of charge. Or you can do a simple audit yourself. An internet search will uncover instructions.

In most cases, the best thing a homeowner can do is to make sure that they’re not wasting energy. The DOE says that if you total up all the leaks around windows and doors it’s the same as leaving a window wide open. Two inexpensive ways to save energy are:

  1. Weather-stripping – an easy, inexpensive way to eliminate leaks. A $3 tube of caulking could save you quite a bit.
  2. Only heat the areas you are in, especially when there’s only one person at home. You don’t need to heat the entire home.
Central furnace vs. space heater

Yes, a central furnace will be more efficient than a space heater. But, only if they’re heating the same sized area. In most cases the space heater only has to heat one room, while the furnace will heat the entire residence. So even if the space heater is less efficient, it will still use less energy than running your furnace.

Winter energy bills will always be a challenge. Especially when prices rise and you live in a cold climate. Fortunately there are things that consumers can do to reduce their bills short of replacing water heaters and furnaces.

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68 Responses to “Gas vs. Electric Heating”

  • GasNtools says:

    It’s really a great and helpful piece of information. I am glad that you shared this useful info with us.

  • It was mentioned that gas heating was often cheaper than electric. My sister recently moved into a home with electric heating. I will have to share this article with her.

  • Sam says:

    A gas powered heater generally has a higher up-front cost, however it is quite cheap to operates in the longer-run; as natural gas compared to electricity is very cheap. Electric heaters consumer more electricity, which could raise your energy cost, however with technological advancement low power consuming electric heater have now been introduced, although they are more expensive as compared to traditional heaters but are more eco-freindly and cost saving in the longer-run. However it would be best to consult with a residential plumber before you install or switch your water heater.

  • Frank says:

    My summer time bill for electric was $120 that was including all lights on, my camera system, my TV’s 65″ and 60″ plus my (large window) custom installed in wall air-conditioner placed 3″from the ceiling that cooled my entire place to 65f even on the hottest days by taking the heat off the ceiling where it always rise’s too.

  • Frank says:

    I was paying (everything electric including the furnace) $450-$500 a month in a 700sqf home in the dead of winter with the heat at 75f all day. Have 2 little kids and a stay at home mom. I just moved and am having a 95% gas furnace installed in our 1800sf home then next year I’m insulating the house top to bottom.
    I will try to be remember to update this post so people can compare real world prices verse estimates that are never accurate. From North West PA.

  • Josh says:

    This is a good article with overall good suggestions – just use less by being more efficient. Insulate, LED bulbs, shade trees, INSULATE.

    Also, compare your prices – utility companies have brochures estimating what it will cost to run each utility per appliance. It is different everywhere.

    In places where demand for natural gas is low (South) prices tend to be higher. Where demand is higher (North) the cost of heating with gas is much lower. In Iowa, we have low electric and gas, but elec also comes from windmills and solar. Here is a very nice article showing prices for energy across the US.

    I just bought a 40 year old house in Des Moines, installed a 97% efficient gas furnace, a 16 SEER electric AC, and insulated the heck out of the basement and attic. Haven’t seen a utility bill over $150 vs. almost $200 before (lows below 0F for 2 weeks at a time, highs over 90F for 7+ days at a time). I will make my money back in about 4 years and I am comfortable in my home. Identical set-up at my parents house in Michigan – their bill is closer to $200 because elec is higher, but gas is the same.

    I don’t like electric heat because it dries the air more in the winter. I like gas stoves and ovens as they heat up quicker and more evenly. If gas was 3X the cost, I might live with the drawbacks of electric, so preference comes in to play, too.

  • patricia says:

    I live in Cartersville Ga and have nat gas heating with that city so have no other gas company alt. Since Dereuglation of gas bills went sky high. I am paying 300.00 gas bills and never in my life has that happened with electric. Gas here is 75% higher than other places. This winter was awful for the south. But Gas is higher. I would like to have my house total electric you can at least regulate it. The city makes you pay water and gas together. I hate it. When electric goes out so does gas, not like years ago when gas stayed on. So I just want to convert.All those claiming it is cheaper must work for gas companies beause it has been awful for Ga.

  • JP says:

    Hi, I had a house running all electric, its like anything else, if you not careful with the doors and windows open in Winter time will gets expensive, but if the house is well isolated works fine, I was happy. one bill for everything. My stove was new, I was happy with an electric stove, worked excellent. After changed to a new water tank I noticed a lower payment in electric too. matter fact my next house I am researching if I can have it all electric. Always the option to use the grill in the garage if don’t want to cook in the electric one.

  • Elkay says:

    Shellie, thanks for your comment. I also favor gas water heaters because the recovery time seems to be smaller . . . this can be a big deal when you have kids using showers!! Have a blessed day . . .

  • Shellie says:

    Great article and interesting replies. Electric prices vary by state. Anyway we are getting a tankless hot water heater because electric rates have skyrocketed in KY. We are also going back to a gas hot water heater because we made the mistake of installing an electric one to make the pilot light easier to manage. Very costly mistake. Now we are starting to see why. Thx !

  • Jenny says:

    I’m still confused. I’ve read that it’s cheaper to install electric heaters than gas, but costs more to run electric. So in the long run, gas is more efficient. But then I read people’s comments and they say the opposite. My fiance just bought a house that has electric everything (it has a heat pump), and I’ve always had gas. We are trying to figure out if we should install gas and now I am just confused.

  • Eve says:

    I doubt gas is cheaper especially since my power bill is only around $60/month but my GAS Bill is over $150/month and half of that is “delivery charge”. Doesn’t matter if I use my fireplace to keep the house warm or if I don’t use the stove I can still expect to pay at LEAST $70 for the delivery charge. What BS.

  • Dan says:

    This “gas is cheaper” nonsense is really ticking me off. Here are some actual numbers (and I live in the NW, so our energy is overall cheaper than other parts of the country, my recent 14% unannounced rate increase notwithstanding):

    I never paid over $50 a month in 15 years of having electric heat. Never. Not even in freezing cold winters.

    We just moved to a place that has gas heat AND electric power. I still don’t understand that part completely….
    But it appears the gas is ONLY for heating the house, and the electric powers everything else including the water heater. (And apparently you need electricity to power the gas heater…. because that makes sense.)

    Here’s basic logic: Powering an entire house with electric heat should be more expensive than powering an entire house with gas, if gas is REALLY cheaper, which it isn’t.

    Here’s the reality:
    I’m now paying $75 a month, just for my electric bill, AND $60 a month for my gas bill. That’s $130 a MONTH!!! I’m furious. (can you tell?)

    I’m paying MORE THAN DOUBLE what I ever paid before in my previous three residences.

    The only variable that has changed is that those were all 1-bedrooms, and now we have 3.

    But if gas is really “cheaper,” and if the gas handles the heating, which is the single biggest contributor to a power bill, then our power bill should be way lower than it is, and the gas bill shouldn’t be HIGHER than my total electric bill to power EVERYTHING in my 1-bedroom condos ever was.

    That is absolute nuts. Adding two bedrooms doesn’t come close to explaining that.

    Gas is not cheaper. It’s a flaming ripoff.

    Why anyone would want gas and electric heat is beyond me.

  • Aldo says:

    Derek Mcdoogle, did you mean you wondered if each house can be outfitted to have gas heat?

  • In your article, you stated that even after the current increase in prices, gas is still cheaper than electric for generating heat. My wife and I were going through our finances and have been looking for ways to lower our bills. I wonder if each house can be outfitted to have electric heat.

  • Doris Beck Doris Beck says:

    That’s the good news isn’t it? We can each choose what works best for us!

  • JB says:

    Well for me I would rather choose electric heating since it’s hassle free and costs saving.

  • I have always wondered what the difference between electric and gas heating was. I had no idea that it is cheaper to heat water with gas than electricity. I also think its crazy that an electric water heater costs 75% more than a gas one.

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