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Gas or Electric Heat: A Cost Comparison

One of the first decisions a homeowner or business owner has to make, regarding an HVAC (heat, ventilation, air conditioning) system, is whether to purchase an electric or gas heater. Each type has its advantages and disadvantages. The up-front costs and long-term costs are one area that people typically examine.

Up-Front Costs

These are the costs associated with the initial installation of the heating component of the HVAC system. The first item to look at is whether the home or business has access to electricity and natural gas. Many homes and businesses have both electricity and natural gas lines already running to the house. However, some locations do not have access to natural gas. In this case, running a gas line to the location could be an additional upfront cost. Each home or business is unique and different costs may be taken into consideration for each one.

The cost of the heater itself is also included in the up-front costs. If you are buying this as a single component, it's often called a furnace. At National Air Warehouse, the electric furnaces start around $700 and the gas furnaces start around $900.

Looking at just the up-front costs, the electric furnace seems to be cheaper. However, most HVAC systems are meant to be used for years. The long-term costs look at how expensive it is to run each type of furnace for years to come.

Long-Term Costs

The costs associated with the furnace in the long term are: maintenance and the cost of the electricity/natural gas. When it comes to maintenance, the electric heaters are typically cheaper to maintain. One of the reasons is that electric furnaces typically outlast gas furnaces. An electric furnace can last for 20-30 years with regular maintenance. Gas furnaces, in comparison, typically have slightly shorter lifespans of 10-20 years.

People commonly say that the cost of natural gas is lower than that of electricity. This is true in many locations, but it does depend on the location of the home or business. Electricity is cheaper in some cities than others. To truly determine the long-term impact of paying for electricity or gas, a homeowner or business owner can calculate the energy use. The amount of electricity used is typically tabulated as kilowatt-hours (kWh) and the amount of natural gas is often tabulated as therms. A homeowner could directly compare the costs by converting kWh to therms (1 kWh = 0.034 therms). Less money spent per therm will save the homeowner or business owner in the long-term.

Making a smart decision regarding electric or gas furnaces may require a bit of thought, but there are many resources out there to help home and business owners decide between the two.

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