Home heating is one of the biggest expenses for American households, especially during the cold winter months. Whether you live in the Midwest, Northeast, or Pacific Northwest, keeping your home warm and comfortable can account for up to 40% of your total utility bill.
When it comes to energy sources for heating, two main contenders dominate the U.S. market — natural gas and electricity. Each has its advantages, drawbacks, and cost implications that vary depending on location, climate, and home size.
This article explores the differences in cost, efficiency, environmental impact, and long-term value between natural gas and electric heating, helping homeowners make informed decisions about what works best for their situation.
Overview of Home Heating in the United States
According to the U.S. Energy Information Administration (EIA), over 48% of American households use natural gas for primary home heating, while about 41% rely on electricity. The remaining households use propane, heating oil, or renewable energy sources.
The popularity of each option often depends on regional infrastructure:
- Natural gas dominates colder regions like the Midwest and Northeast, where utility pipelines are widespread.
- Electric heating is more common in the South and coastal areas, where winters are milder and electricity rates are lower.
Understanding how each system works — and how much it costs — is key to improving both comfort and affordability.
How Natural Gas Heating Works
Natural gas heating systems typically include furnaces or boilers that burn gas to produce heat. This heat is distributed through ducts or pipes to warm the home.
Advantages:
- High heating output — ideal for cold climates.
- Lower operating costs in areas with cheap natural gas.
- Heats the home quickly and evenly.
Disadvantages:
- Requires access to a natural gas line.
- Combustion-based systems need proper ventilation and maintenance.
- Produces carbon emissions.
How Electric Heating Works
Electric heating systems come in several forms, including baseboard heaters, heat pumps, and electric furnaces. Instead of combustion, electricity is used to generate heat through resistance or to transfer heat from outside air (in the case of heat pumps).
Advantages:
- Easy to install and maintain — no need for fuel delivery or exhaust systems.
- Safer operation — no combustion or carbon monoxide risk.
- Can be powered by renewable energy (solar or wind).
Disadvantages:
- Higher operating costs in regions with expensive electricity.
- May take longer to heat larger homes.
- Less efficient in extremely cold climates (especially for standard heat pumps).
Cost Comparison: Natural Gas vs. Electricity
Average Energy Prices (2025 estimates)
- Natural gas: Around $1.15 per therm (source: EIA 2025 projection)
- Electricity: Around 16.5 cents per kWh
While these numbers may seem close, the key difference lies in how much heat each unit produces.
- 1 therm of natural gas = 100,000 BTUs
- 1 kWh of electricity = 3,412 BTUs
This means that, on average, natural gas delivers about three times more heat per dollar than electricity — assuming similar system efficiency.
Example Scenario:
Heating a typical 2,000-square-foot home for one month:
- Using natural gas, the cost might range from $60–$90.
- Using electricity, it could range from $130–$200.
However, this difference varies widely by state. For example:
- In Texas and Florida, low electricity rates make electric heating affordable.
- In Illinois or Minnesota, where natural gas is abundant, gas heating is far cheaper.
Energy Efficiency Comparison
The efficiency of heating systems also affects long-term costs.
- Gas furnaces typically have 80–98% efficiency ratings, meaning nearly all the gas burned turns into usable heat.
- Electric furnaces can reach nearly 100% efficiency, since all the electricity is converted into heat — but the electricity itself is more expensive to generate.
- Heat pumps are the standout among electric systems. They can deliver 200–300% efficiency, meaning they produce two to three times more heat energy than the electricity consumed.
If your region has mild winters, a modern heat pump can make electric heating as cost-effective — or even cheaper — than gas.
Environmental Considerations
When comparing natural gas and electricity, environmental impact is an increasingly important factor.
- Natural gas is a fossil fuel that emits carbon dioxide (CO₂) during combustion. However, it burns cleaner than coal or oil.
- Electricity’s carbon footprint depends on how it’s generated. In states that rely on coal or natural gas power plants, electricity may not be much “greener.” But in states using renewable energy, such as California, Washington, and Oregon, electric heating can be significantly more sustainable.
The U.S. is transitioning toward cleaner electricity generation, so electric heating will likely become the greener long-term option.
Installation and Maintenance Costs
Natural Gas Systems
- Installation cost: $4,000 – $8,000 (furnace + ductwork)
- Annual maintenance: $100 – $200
- Lifespan: 15–20 years
Electric Systems
- Baseboard heaters: $500 – $1,500 total
- Electric furnace: $3,000 – $5,500
- Heat pump: $5,000 – $9,000 (with possible rebates)
- Maintenance: Minimal, mostly filter replacement
Electric systems are generally cheaper to install but may have higher monthly operating costs depending on local rates.
Regional Differences in Cost
Energy costs vary dramatically across the United States:
- Northeast: Gas is cheaper and widely available. Electricity rates are higher.
- South: Mild winters make heat pumps cost-effective.
- Midwest: Natural gas dominates due to infrastructure and cold weather.
- West Coast: Electricity from renewable sources makes electric heating more appealing.
Before switching systems, homeowners should check local utility rates and rebate programs for potential savings.
Final Thoughts: Which Is Better?
There’s no one-size-fits-all answer to whether natural gas or electricity is better for home heating in the USA.
- Choose natural gas if you live in a cold region with affordable gas rates and existing infrastructure.
- Choose electric heating or heat pumps if your electricity rates are moderate, your winters are mild, or you want to reduce your carbon footprint.
Ultimately, the best system balances cost, comfort, and sustainability — and investing in home insulation, smart thermostats, and regular maintenance can make any heating system perform more efficiently.