Electric furnace vs. gas furnace: Which is better?

Key points

• Gas furnaces are better in cold climates because they can heat your space quicker than electric furnaces.

• Gas furnaces usually have the edge when it comes to fuel cost, but electric furnaces are cheaper to install, easier to maintain and longer-lasting.

• Gas furnaces pose a higher safety risk than electric furnaces due to carbon monoxide production and require annual safety inspections.

If you’re replacing an aging furnace, the biggest decision you’ll need to make is whether to go with electricity or gas as the fuel source. The answer isn’t always the most efficient option — or the cheapest — although both should play a significant role in your decision. To help with that decision, we recommend checking out our top air conditioner brands to both heat and cool your home.

Other factors to consider include your local climate, heater size and access to fuel, tolerance for safety risk and your current heating solution. For example, if you already have a gas furnace and access to natural gas, it might make sense to buy another gas furnace despite its increased safety risk and maintenance costs over electric heaters.

To help you understand the key differences between electric and gas furnaces, we spoke with heater manufacturer representatives and surveyed 1,000 homeowners who repaired or replaced their heater within the last two years.

Getting this pricey decision right is a priority, so here are three of our favorite brands that we have vetted extensively:

How do electric and gas furnaces differ?

The main difference between electric and gas furnaces is the fuel source used to generate heat. Electric furnaces use electric coils — similar to an electric space heater — to warm the air that passes over them. The heated air circulates through ductwork and into the rooms of your home through vents.

Gas furnaces burn natural gas or propane to produce heat. A controlled flame, or pilot light, inside your furnace ignites the main gas burners to generate heat. The heat rises to warm the air inside a chamber, called the heat exchanger. This heated air is distributed through ducts and vents in your home.

Is a gas or electric furnace better?

A gas or electric furnace is better based on your home and preferences. The right type of furnace for your home depends on factors including climate, energy costs in your area and what kind of fuel supply or electrical setup you already have.

Here are some general guidelines:

• A gas furnace is better for colder climates where heating needs are greater. It can supply warmer air than electric models and is more efficient.
• Electric furnaces are safer and require less maintenance than gas furnaces. They don’t require annual safety inspections like gas furnaces do.
• A gas furnace probably makes more economic sense if you have access to cheap natural gas.
• If your home lacks gas lines or propane tanks, installing an electric furnace will be easier and less expensive.

Let’s take a closer look at the six main factors to consider when choosing between a gas and electric furnace.

Cost

One of the biggest considerations is the cost of your desired furnace. The U.S. Department of Energy (DOE) estimates that heating is responsible for 29% of the average American’s energy bill, meaning you have considerable potential for cost savings when you choose the right heater. Although it is difficult to source pricing from manufacturers, gas furnaces are typically more complicated and expensive to install than electric furnaces.

Equipment cost

I shopped at Home Depot and found that a 60,000-Btu electric furnace costs between $1,100 and $2,800. The 60,000-Btu gas units that list pricing range from $1,300–$3,000, but most require a free consultation for a quote. For a high-end gas furnace, like those from Trane, expect to spend between $5,000 and $12,000.

Other factors, such as furnace output, affect your upfront cost. A 60,000-Btu gas furnace might be suitable for a warmer climate, such as in Texas or Southern California, while a colder region like New England demands a more powerful unit.

According to our October 2023 survey of 1,000 homeowners, 28% of people spent between $5,000 and $9,999 on a new furnace. 

Installation cost

Installation cost is another important consideration. Electric furnaces are often cheaper to install since they only require an electrical connection and don’t have ventilation requirements. Gas furnaces cost more to install, especially if you’re switching from electric to gas. 

Maintenance cost

Gas furnaces also have costlier maintenance requirements. They require annual tune-ups to ensure they’re functioning safely and efficiently. For example, Rebmann Plumbing and Goldstar Plumbing in New York charge $125 to $200 for this service. Electric furnaces can run for years without needing attention.

Climate

Gas furnaces can provide warmer air and heat an area faster than electric models, so they’re better for cold regions where you need reliable, efficient heating. You might be able to get away with an electric furnace even if you live in a cold climate, but your monthly heating bill will be more expensive than if you went with natural gas or propane heating. You should compare the price of natural gas to electricity in your area. Natural gas is the more affordable heating option in most places.

According to data from the Energy Industries Association (EIA), homes in very cold and cold climates used an average of 42.34 million Btu of energy for heating in 2020. This was much higher than usage in hot-humid climates (19.08 million Btu) and marine climates (6.49 million Btu).

Your property’s microclimate is also important. “When I assess a home, I take into account its layout, size, orientation, local climate and the current insulation it has,” said Tim David, a 25-year veteran of the HVAC industry. “If a home receives an excessive amount of sunlight or is situated in a windy area, it can greatly affect its heating and cooling requirements.”

Energy efficiency

Gas heaters require less energy than electric furnaces to heat the same space, giving them an advantage in cold climates. That’s because the heat produced by gas is hotter than the heat produced by electric coils. However, electric furnaces are more efficient in the sense that nearly all of the energy they use is converted to heat, while gas furnaces only convert a percentage of their fuel into heat.

This percentage can vary based on the furnace. The key furnace efficiency rating is the annual fuel utilization efficiency (AFUE). High-efficiency gas furnaces have at least a 90% AFUE, but older, less efficient gas furnaces can have an AFUE as low as 57%. By contrast, all-electric furnaces have an AFUE between 95% and 100%.

The DOE recently finalized new energy-efficiency standards for gas heaters that will take effect in 2028, as mandated by the U.S. Congress. The minimum AFUE for all new gas furnaces in 2028 will be 95%. We recommend looking for high-efficiency models with an AFUE of 97% or higher to qualify for the federal tax credit. While it may cost more upfront, you’ll save more on heating bills in the long run. The DOE estimates its new mandate will result in cumulative consumer energy cost savings of $24.8 billion over 30 years.

Installation

Installing a new furnace requires consideration of your home’s existing infrastructure. Switching from gas to electric heating or vice versa is more involved than installing a new furnace that uses the same fuel as your current heating system.

Putting in a new gas furnace involves connecting to the existing gas supply lines and venting. A professional should install gas appliances to ensure proper ventilation and safety. In fact, most municipalities require that a licensed plumber handle all gas line work.

If your home does not already have gas service, installing new gas lines and a meter can add significantly to costs. You’ll need to obtain permits for gas line work as well, which can also add to the cost and timeframe of the installation.

Installing an electric furnace is simpler and more affordable, especially if your home already has electrical lines that can support one. You need 240 V circuits to power most electric furnaces. If you don’t have a 240 V circuit already, upgrading an electrical panel or wiring will increase your installation costs. You usually won’t need a permit for basic electrical work, although you will need an electrician to do the work for you.

Maintenance and repairs

Gas furnaces require more frequent repairs than electric furnaces. They must be inspected yearly to look for gas leaks, corrosion and carbon monoxide issues related to poor ventilation or incomplete burning. The heat exchanger, gas lines and ventilation system also need regular inspection for signs of degradation.

Electric furnaces are much less finicky. Most electric furnaces only need to be inspected once every few years. Maintenance visits for electric furnaces are more focused on efficiency than safety.

Gas furnace repairs also tend to be more expensive than electric furnace repairs. Replacing a gas furnace’s heat exchanger, for instance, can cost several thousand dollars. Electric furnaces, by contrast, have few moving parts, making problems easier to address and thereby less expensive. The most expensive repair you’ll encounter with an electric furnace is replacing a burnt-out circuit board, which should only run you a few hundred dollars.

Safety

Gas furnaces come with the risk of carbon monoxide exposure if they’re not properly vented. Carbon monoxide is an odorless, colorless gas that can lead to death from overexposure. You should install a carbon monoxide detector near your furnace if it’s fueled by gas. It’s also advisable to install a carbon monoxide detector in your home’s main living area.

Electric furnaces are much safer than gas furnaces and are the better option if you’re most concerned about safety. That’s because they don’t produce any noxious byproducts. However, as large electrical devices that produce heat, they could potentially short circuit and start fires.

Keep in mind that correctly installed and well-maintained gas furnaces are also generally considered safe. This is because the government has set strict regulations and industry standards to prevent them from causing indoor air contamination.

According to an article published in Yale Climate Connections in response to the growing debate over the safety of gas appliances, when functioning properly, these appliances pose little risk of indoor air pollution — the operative word being “properly.” If your gas appliances or gas lines malfunction, it could harm the air quality inside your home. That’s why it’s so important to have your gas furnace inspected annually and to call an HVAC pro at the first sign of a problem.

What’s next?

There’s no one-size-fits-all approach to choosing between an electric or gas furnace. Cost is a major factor, but it’s more important to choose the right type of furnace for your home’s climate and heating needs.

Gas furnaces are better in colder climates and will save you more money in fuel costs over time, whereas electric furnaces have lower upfront costs at the expense of higher monthly heating bills.

Whichever furnace type is the best fit for you, the next step is to choose the right model and hire a qualified HVAC professional to complete the installation. We recommend getting quotes from at least three furnace installers before signing a contract.

Each installer will perform an inspection of your home, taking note of your insulation, windows, ductwork and more before making a furnace recommendation that suits your property. This is a great time to bring up any preferences you have based on the pros and cons of gas and electric furnaces.