Natural Gas Heat vs Electrical Heat – Which is Cheaper – 2022

Natural Gas Heat Is Much Cheaper Than Electric Heat In The US

Yes natural gas heat is cheaper than electric heat in the US. We qualify this by saying that in this article we mean only electric resistive heat. This refers to classic, standard baseboard heating. The electricity is used to directly create heating which radiates out of the heating system. Modern heat pumps are also driven by electricity but instead of generating it, heat pumps move heat. So heat pump efficiencies are calculated in a different way.

Natural gas is measured in volume or energy content. For example, cubic feet (cu ft) or British Thermal Units (BTU)

Energy costs have also increased across the board due to global events. A caveat: we use figures from 2 years ago which are slightly outdated. Another caveat is that people who use home generated solar energy will pay almost nothing except for the upfront investment in the solar panels, which is considerable and should be part of the accounting. We also show that in the UK, natural gas heat is slightly cheaper than electric heat. The numbers work out differently because the cost of energy is very different.

Heat Pumps Are Not Covered In This Article

In fact, heat pumps are very efficient and will beat natural gas. Heat pumps are able to move more BTUs of heat energy for a given amount of electricity than an electrical heater can generate. Heat pumps are even more efficient than natural gas cost-wise, unless electricity costs rise really high. For the same costs that the US is experiencing 2022, heat pumps move more heat into the home than natural gas furnaces generate.

The Exact Answer Depends On The Cost of Electricity And Natural Gas Prices

We present an analysis for the numbers we’ve found across the 50 states of the US. However, for your particular region of the world it may be different. To carry out this comparison for yourself, the key numbers you need are the electricity cost per kWh (kilowatt hour which is equivalent to 3412 BTU) and the natural gas cost per therm (thermal unit which is eqiuvalent to 100,000 BTU).

With these numbers, it becomes almost possible to compare apples to apples if you convert both to the same units, for example we always use the amount of money (dollars) per unit of heat (MMBTU or millions of BTUs).

The last piece of information you need is the efficiency of your heating appliance. We assume 100% efficiency for below, which is pretty close to being true for electrical resistive heating, and almost true for natural gas heating. Modern natural gas boilers and furnaces are 90-98% efficient so this is not so far off. Finally, if you live in Europe, then you are experiencing more complicated costs.

UK: Natural Gas Heating Is Still Cheaper Than Electric Heating – 2022

As an example of what is happening in Europe, before we talk about the US below, let’s take a look at the UK. Let’s compare natural gas to electricity. The UK electricity rate is £0.107 per kWh (converted to $0.128 per kWh at Nov 2022 exchange rates), which is very low, close to the lowest possible in the US which is Washington state. Washington’s electricity prices of $28 per MMBTU translates to about $0.09 per kWh which is a tiny bit lower than the $0.128 per kWh in UK.

On the flip side, UK natural gas cost is £2.63 per therm which is higher than any state except for Hawaii. People in the UK usually use mains gas for heating (estimated 90% of households) and the remainder (10% of households) are on electric. When you convert the two to compare apples to apples, you get £31 / MMBTU for electricity, and £26 / MMBTU for natural gas. So again, natural gas ends up being slightly cheaper for heating, except it’s much much closer for the two energy sources than in the US. To complicate things, in the UK the government is subsidizing the cost of energy by capping payments.

UK Mains Gas Heating CostUK Electricity Heating Cost
£26 / MMBTU£31 / MMBTU
Comparison of natural gas vs electric heating costs in the UK shows that they’re quite close with natural gas beating electricity slightly

Why is there such a huge difference between the US and UK? The answer is hugely complicated because of the diversity of generation sources and the delivery solutions for electricity and natural gas in both countries. For natural gas the difference is easier to understand because the US has an incredible abundance of natural gas.

We leave you with one final thought for the UK. Heat pumps deliver at minimum the equivalent of a ratio of 2 kWh of heating for every 1 kWh of electricity used. This is the HSPF rating of the heat pump, and the real ratio is more like 2.5 to 3.5. Therefore, we expect in the UK if you ran a heat pump with the current electricity rates, you can reduce your heating costs down to £13 / MMBTU.

Natural Gas On Average Is Cheaper

In our analysis below, we find that on average natural gas heat costs $9.2 per million BTU (MMBTU) compared to electric heat at $34.9 per MMBTU. That means natural gas heat only about a third of the price of electric heat over a year for a home. The reason is because natural gas furnaces pound for pound are more efficient in generating heat energy. Maine’s heat pump program refers to a study that came up with similar figures. In their surveys annual costs for electric heat is $5,000 compared to annual costs for natural gas heat at $2,000.

Is Natural Gas Heating Cheaper Than Electric Heating In Your State?

These figures are for Maine. Is it true that natural gas heating will be cheaper than electric heating in every state? As we know, electric rates differ in every state. In fact, carbon intensity varies also because the source of electricity in every US state is different. They differ in access to coal, oil, hydropower, solar energy. We will consider the carbon intensity of the different fuel sources across states in another article.

We Obtained Data From EIA To Perform State-By-State Comparison Of Costs

Below, we show you figures from the EIA, the US Energy Information Administration. They perform testing and calculations and analyses. One of their data sources is natural gas costs and electric costs from suppliers in every state. Many states don’t have monopolies of suppliers. There are multiple utilities that overlap and compete against each other. From this data, the EIA calculated averages for the cost of natural gas and electricity.

The Costs Are In Dollars Per MMBTU – Millions Of British Thermal Units

The costs are performed in terms of BTU. A BTU, or a British Thermal Unit, is a way to measure energy. It’s the equivalent of the kilowatt hour, which you might know. There are approximately 3412 BTUs in 1 kWh. And either BTUs or kWh will be our way of measuring the heat needed for a home. We don’t even need to know how much is needed for a home. We just need to know what is the cost for any single unit of BTU or kWh.

There is one more caveat. For electric heat, the amount of energy you put in is the amount of energy you get out because that’s the nature of technology behind electrical resistive heat. For natural gas heat, conversion of the energy inside natural gas to heat energy is 78% efficiency of higher, due to regulations in the US. That means we really need to apply a conversion factor, i.e. divide by 0.78 for natural gas costs to increase them slightly due to the less than 100% efficiency.

StateGas price in $ / MMBTUElectricity price in $ / MMBTUEst. natural gas savings over electricity
District of Columbia13.88834.543-59.79%
New Hampshire15.69854.218-71.05%
New Jersey9.93346.722-78.74%
New Mexico6.77637.914-82.13%
New York12.32052.280-76.44%
North Carolina13.64833.350-59.08%
North Dakota6.56430.587-78.54%
South Carolina12.98437.469-65.35%
South Dakota9.47134.425-72.49%
West Virginia9.73134.595-71.87%
Natural gas vs Electricity heating costs per MMBTU, a unit of heat energy (source: EIA residential gas prices and EIA residential electricity prices in each state)

Natural Gas Heating Is Cheaper Than Electric Heating In Every State

According to our analyses above, in every state the cost of natural gas heating is much cheaper than the cost of electric heating. The cost savings of switching from electric heat to natural gas heat range from the least in Hawaii (49% savings) to the most in Alaska (84% savings).

Carbon Intensity Is A More Complicated Story

The carbon intensity of natural gas vs electric heating is a different story. It’s a complicated story. The carbon intensity of natural gas is well known. It’s 53 g CO2 emitted per MMBTU. You can measure this by burning natural gas, measuring the amount of heat that comes off, and calculate the theoretical grams of carbon dioxide emitted from the combustion. You might even be able to measure the CO2 directly.

Electricity Is Sourced From Different Fuels – The Carbon Intensity Is Different For Every State, Every Utility

The carbon intensity of the electrical grid is more complicated. This is because the energy sources that go into the grid are diverse. A single electricity provider has the option of sourcing energy from coal, oil, natural gas, hydro, wind, and nuclear power. It may generate only a fraction of that power itself and transfer the remainder from another provider.

Finally, people generate their own power through home solar panels. For example if you know you’re using solar which we mention above, you know your carbon intensity is near zero. But what if you’re asking about on average for people using the electric grid? The estimated carbon intensity of electricity is 883 lbs CO2 per megawatt hour, which translates to 12

Of course it’s possible to estimate this. We’ll talk about it in another article.

Anne Lauer
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Anna Lauer is a writer, gardener, and homesteader living in rural Wisconsin. She has written for Mother Earth News, Grit, and Hobby Farms magazines. Anna is writing a new book about growing your food for free and an ultimate guide to producing food at little to no cost. When shes not writing or gardening, Anna enjoys spending time with her husband and two young daughters.