Electric vs. gas heat is one of the most common home energy questions — and the answer depends almost entirely on your local electricity and gas rates, not on some universal rule. In some parts of the U.S., electric heat is cheaper. In others, gas wins by a wide margin.
How to Compare Electric vs Gas Heat Costs
The key metric is cost per BTU of useful heat delivered. Electric resistance heat (baseboard, space heaters) is 100% efficient — all electricity becomes heat. Gas furnaces are 80–98% efficient (AFUE rating). To compare: divide your electricity rate ($/kWh) by 3,412 (BTUs per kWh) for electric cost per BTU. Divide your gas rate ($/therm) by 100,000 (BTUs per therm × AFUE) for gas cost per BTU.
The Crossover Point
At a 95% efficient gas furnace: gas heat costs less when the gas price ($/therm) × 34 < electricity price (¢/kWh). Example: at $1.30/therm gas and 13¢/kWh electricity → 1.30 × 34 = 44 vs. 13 → gas wins. At $1.30/therm and 28¢/kWh (California) → 44 vs. 28 → still gas. But a heat pump changes everything: at COP 3, electric heat costs 1/3 as much per BTU as electric resistance, making heat pumps competitive with gas in most U.S. markets.
Regional Winners
- Gas wins: Most of the Midwest, South, and Mountain West where gas is $0.80–1.20/therm and electricity is 10–14¢/kWh
- Electric (heat pump) wins: Pacific Northwest (cheap hydro electricity), parts of the Southeast, and increasingly most of the U.S. as heat pump efficiency improves
- Electric resistance wins: Very few places — only where electricity is below 7¢/kWh (some Pacific Northwest utilities)
Bottom Line
Use our Heating Cost by Fuel Calculator with your actual utility rates to find the cheapest option for your location. For most homeowners replacing an aging heating system, a heat pump is worth serious consideration regardless of current gas vs. electric prices, given its dual function as both heater and AC.