Electric vs. Gas Heat

Click to see the brands of heating and cooling systems we trust.In a shift from the past, it is now less expensive to heat with electricity in Indiana than with natural gas.

  • The cost of gas has risen an average of 8% a year over the last 10 years, a huge increase.
  • Gas heating will cost Central Indiana residents more than $1,800 this winter to heat a 1,800 sq. ft. home.
  • You can convert an existing gas furnace to a hybrid system by adding an electric heat pump.
  • Conversion is less expensive than to switch to an all-electric heating system, which could cost $3,000 or $4,000 to upgrade meters, electrical boxes, wiring, etc. to get the right service to support the system

Electric vs. Gas: Compare The Facts

The heating system in your home converts fuel, generally electricity, oil, natural gas or propane, into heat. Heat is usually measured in "BTUs" or British Thermal Unit

  • A BTU is a small unit of heat, comparable to the amount of heat you get from one wooden match. 

  • According to Duke Energy, an average Midwest home may use 60 to 80 million BTUs each winter.

To compare different heating fuels and heating systems we need a common unit of measure that applies to all fuels.  The "Cost per one Million BTUs" (MBTUs) is the best way to compare heating costs associated with different fuels and different heating systems. Each fuel and heating system will have its own Cost per MBTUs based on the efficiency of the system and the price of the fuel.

The estimates below help compare different fuels and different heating systems at relatively current rates:

  • The estimates are for an average home near 1800 square feet in size in Central Indiana.

  • It is important to realize that every home will cost a different amount to heat each winter.

  • Many typical homes will fall in an "average heating cost" range, but your home may be different.

  • The estimates are based on the costs per fuel listed (Winter 2007 – 2008,) which may be lower than your current rate.

  • All fuel costs change frequently and the costs shown below may not be accurate for any future date. Check your most recent utility bill for the actual rates you are being charged.

  • The actual cost to heat your home in any given winter will depend on the weather, your living habits, your home’s insulation and
    air leakage, the condition of your heating equipment, sun and wind exposure, the home’s design and other variables.

Click to Enlarge Image of Central Indiana Winter Heating Cost Comparisons for 2007-2008

Note: Fuel costs for Natural Gas and Electricity assume heating usage is all in the lowest rate step.

Compare Fuel Costs to Estimate Heating Cost

As shown in the list above, if you know the type of heating system and the current cost of fuels, you can easily compare different fuels
and heating systems. 

Example A: Estimated Natural Gas Heat Comparison

If you own an 80% efficient natural gas furnace and your heating rate is about $1.20 per therm,  then from the table above:

  • You will spend about $15.00 for one million BTUs.

  • If your home requires 60 million BTUs per winter, your winter heating costs will be about 60 X $15.00 = $900 per winter

If you changed to a 90% natural gas furnace:

  • Cost per million BTUs is now $13.33

  • In the same winter which required 60 million BTUs, your heating costs would be about 60 X $13.33 = $800 per winter

Example B: Estimated Electric Heat Comparison

If you own an electric furnace with no heat pump and your heating rate is about $.06 per kWh:

  • You will spend about $17.58 for one million BTUs

  • If your home requires 60 million BTUs per winter, your winter heating costs will be about 60 X $17.58 = $1055 per winter

If you changed to a new 13 SEER heat pump:

  • Your cost per million BTUs is now $7.64

  • In the same winter which required 60 million BTUs, your heating costs would be about 60 X $7.64 = $458 per winter

The actual cost to heat your home may be a large portion of your total energy bill, but it is usually not the entire energy bill. The
estimated heating cost examples used in this information are not intended to include any other appliance usage in your home. Your
total energy bill will be a sum of the heating costs and the cost to run all the other appliances
in your home.  The division is
not shown on your energy bill.

Source: Duke Energy