Now that most of the country is well into the colder months of winter, it’s likely that your heating bill is at an all-time high. Heat generally uses more energy than any other system in the home, typically representing nearly 30% of your utility costs.

Choosing the right heating system is one of the best ways to control your home utility costs. The two most popular heat sources for both new construction and for replacing an old furnace are natural gas and electric furnaces. In this article, we’ll take a look at both options to help you identify the one that’s best for your home.

Both natural gas and electric furnaces use forced-air heating systems. When the temperature dips below the heat point set on the thermostat, a signal is sent to the furnace unit. In a gas furnace, the signal causes the pilot light to ignite the main burner of the heat exchanger, which then draws heat from the main burner and circulates it around the home. In an electric furnace, an electric ignition receives the thermostat signal and activates the electric heating elements.

How does electric heat work?

Electric is a popular choice for heating, second to natural gas with 36% of U.S. households relying on it for heat. 

Pros & Cons of Electric Heat

  • Doesn't need to be vented
  • Easier and less expensive to install 
  • Runs quieter 
  • Can be more expensive in the long run 

How much does an electric furnace cost?

Electricity has a reputation for being expensive—and it can be. But in moderate climates or for smaller homes, electric heat is a viable, affordable option. Even if you don’t opt for an electric furnace, you may want to consider a high-efficiency electric heat pump. Some of these models are tremendously efficient and cost-effective.

A new electric furnace and installation costs anywhere from $2,000 to $7,600.

How does gas heat work?

Natural gas is the most popular home heating method in the U.S., and is used by 47% of households. This is largely due to it often being more affordable than electric heating.

Pros & Cons of Gas Heat

  • Burns cleaner than coal and releases fewer carbon monoxide emissions
  • Requires carbon monoxide alarms throughout the home
  • Extraction process releases methane and other hydrocarbons
  • Gas furnaces need to be flued so they can ventilate outside 
  • Requires access to a natural gas main line

How much does a gas furnace cost?

According to home improvement website Modernize, operating a gas furnace is about 63% cheaper than an electric furnace when heating an average-sized home. Still, it’s important to note that costs vary considerably from state to state and from year to year. Prices for both natural gas and for electricity fluctuate regularly.

For larger homes or in areas where the temperature regularly drops to freezing, natural gas might be more cost-effective.

Installing a new gas furnace usually runs between $3,800 and $10,000

Is gas heat or electric heat better for my home?

The answer depends on a number of factors, including the cost of installation and the price of natural gas and electricity in your state. Having access to a natural gas line and ventilation will also impact your decision.

Ready to heat the home of your dreams? Get started today.

More from Construction

Welcome Blog - How Welcome Homes Selects Land for Custom Homes

How Welcome Homes Selects Land for Custom Homes

It's important to consider all factors prior to purchasing the land—once building begins, there's really no turning back.

Alec Hartman / Feb 1, 2021 / 2 min read
Welcome Blog - Construction Loans: Everything You Need to Know

Construction Loans: Everything You Need to Know

Building a new home? You'll probably need a loan to finance the project. Here's what you need to know about construction loans.

Welcome Homes / Jan 4, 2022 / 3 min read
Welcome Blog - What Is R-Value & Why Is It Important?

What Is R-Value & Why Is It Important?

Understanding R-value, choosing insulation, determining the right R-value for your home, and more.

Welcome Homes / Jan 12, 2022 / 3 min read

More from Home Buyers

Welcome Blog - Converting Home Buyers to Home Builders

Converting Home Buyers to Home Builders

Why can’t I get a new house that I love in a place I want to live at a price I want to pay?

Alec Hartman / Oct 15, 2020 / 1 min read
Welcome Blog - Introducing The Oasis & New Addition to the Welcome Homes Team