Gas vs electric heating isn't one-size-fits-all. Compare winter costs, heat pump exceptions, regional electricity prices, and installation trade-offs.
Your electric heating bill this winter? Expect around $1,133. Gas? Just $642[1].
That’s 77% more for electric heat. Here’s why—and what actually determines whether you’re paying too much.
↑ TopWhat Drives Your Heating Bill
Three things decide how much you pay: your heating system, your climate, and your electricity rate.
Why the gap is so brutal: Traditional electric heaters convert electricity directly to heat at nearly 100% efficiency—but electricity itself is expensive to produce and deliver. That math shows up in your bill[1]:
| Fuel Type | Average Winter Cost |
|---|---|
| Natural gas | $642 |
| Electric | $1,133 |
| Propane | $1,210 |
| Heating oil | $1,390 |
The exception: Heat pumps change everything
Heat pumps don’t generate heat—they move it. By transferring heat from outside air into your home, they deliver 2-4 units of heat for every unit of electricity consumed. The Department of Energy[2] reports they can cut electric heating costs by up to 75%.
The catch: performance drops in extreme cold. Traditional models struggle below 25-30°F. Newer cold-climate heat pumps maintain efficiency down to -15°F, but cost more upfront.
The modifier: Your electricity rate decides severity
Where you live matters enormously[3]:
- Northeast: 29.54 cents/kWh (highest)
- Midwest: 15-19 cents/kWh
- South: 14-16 cents/kWh (lowest)
In the Northeast, even with a heat pump, electric heating stays expensive. In the South, where electricity is cheap and winters are mild, heat pumps can beat gas.
Table of Contents
- Installation Costs: The Long-Term Picture
- Climate Recommendations: What Works Where
- Market Share: What Are Americans Choosing?
- Managing Your Heating Bills This Winter
- The Bottom Line
↑ TopInstallation Costs: The Long-Term Picture
When comparing electric vs gas heating cost, you can’t ignore the upfront investment:
Gas Furnace Installation:
- Cost range: $2,800-$10,000 (varies by region and efficiency)
- Typical lifespan: 15-20 years
- Efficiency: 80-98.5% AFUE[4]
Heat Pump Installation:
- Cost range: $5,600-$20,000 (varies by type and capacity)
- Typical lifespan: 10-15 years
- Efficiency: Varies by climate and model
Gas furnaces are generally cheaper to install and last longer. Heat pumps cost more upfront but can save money on monthly bills in the right conditions. The DOE notes that high-efficiency gas furnaces (90%+ AFUE) can significantly reduce heating costs compared to older 56-70% efficiency models[4].
↑ TopClimate Recommendations: What Works Where
The colder your climate (measured in Heating Degree Days), the more gas makes sense. In mild winters under 2,000 HDD, heat pumps are the clear winner. For moderate winters (2,000-4,000 HDD), both work well—consider a dual-fuel system for flexibility. In cold winters above 4,000 HDD, gas furnaces are the reliable, cost-effective choice.
Translation: The South is ideal heat pump territory (mild winters, cheap electricity). The Northeast and upper Midwest, with harsh winters and expensive electricity, favor natural gas.
↑ TopMarket Share: What Are Americans Choosing?
Natural gas holds 46% of the residential heating market, while electric heating accounts for 43%[1]. This near-parity reflects regional differences: many older homes lack gas infrastructure, heat pump adoption is growing in mild climates, and new construction increasingly favors all-electric systems.
↑ TopManaging Your Heating Bills This Winter
Whether you heat with electricity or gas, winter bills can strain your budget. Programmable thermostats, weatherization, and LIHEAP assistance all help reduce the damage.
But sometimes the bill lands at the worst time. If your electric or gas bill hits before payday, you can split it into four payments with Deferit. We pay your provider directly, you pay us back over 8 weeks. See if you qualify.
For more strategies, see our guide on winter utility bill help.
↑ TopThe Bottom Line
For most Americans this winter, natural gas wins by a significant margin: $642 vs $1,133 for electric resistance heating. But if you have a modern heat pump in a moderate climate with reasonable electricity prices, electric heating can match or beat gas.
The key factors:
- Your climate: Heat pumps excel in mild winters, gas in harsh ones
- Your electricity prices: High prices in the Northeast favor gas
- Your heating system: Modern heat pumps vs old electric resistance makes all the difference
- Installation costs: Gas is cheaper upfront, heat pumps may save long-term
If you’re choosing a heating system, run the numbers for your specific situation. Calculate your local electricity and gas prices, factor in your climate, and consider both installation costs and monthly bills over the system’s expected lifespan.
↑ TopReferences
- U.S. Energy Information Administration. “Winter Fuels Outlook 2025-2026.” Short-Term Energy Outlook. October 2025.
- U.S. Department of Energy. “Heat Pump Systems.” Energy Saver Guide.
- U.S. Energy Information Administration. “Average Retail Price of Electricity.” Electricity Monthly Update.
- U.S. Department of Energy. “Furnaces and Boilers.” Energy Saver Guide.
