Heat Pump vs Gas Furnace vs Electric Furnace: 3 Key Factors

Heat Pump vs Gas Furnace vs Electric Furnace: 3 Key Factors

Heat Pump vs Gas Furnace vs Electric Furnace: What's Right for You?

If you’re relying on an old heating system to make your building comfortable, you may be wasting money. 

According to the Department of Energy, heating costs make up about 29% of the average home’s utility expenses. Upgrading the heating, cooling, and air conditioning (HVAC) system can drastically reduce the annual costs of property ownership—but traditional, often inefficient HVAC systems have serious limitations. 

About half of all U.S. households rely on natural gas to heat their homes, followed by electricity (41%) and heating oil (4%). While furnaces and boilers remain the most common space heating appliance nationwide, this trend is changing rapidly in favor of air source heat pumps in particular, which in the southeastern U.S. are being installed in over 75% of new homes. Several factors including rising natural gas and heating oil prices are contributing to this trend. 

For many building owners, air source heat pumps provide significant benefits and cost savings over both electric and oil or gas fired furnaces and boilers.

Below, we’ll compare heat pumps vs gas furnaces vs electric furnaces—and explain why air source heat pumps are a better option for most projects.

Comparing heat pumps vs furnaces? An ENERGY STAR, cold climate heat pump system can provide improved comfort and lower bills. Get a custom report for your project in 60 seconds.

Performance in cold cold climates is an important consideration when comparing heat pumps vs furnace. Cold climate heat pumps work superbly in temperatures well below freezing.

Heat Pump vs Gas Furnace vs Electric Furnace: 3 Factors To Consider

Here’s an overview of how electric and gas furnace technologies compare.

1. Upfront Installation Costs of Electric vs Gas Furnaces

Installation costs are the most obvious consideration when choosing between a gas furnace vs. an electric furnace—but installation is a small component of the overall investment. 

Electric furnaces are generally less expensive up-front, and installation costs may be significantly lower. That’s especially true if a building isn’t outfitted for natural gas delivery. Most cities have piping infrastructure in place, but if your property doesn’t have access to that infrastructure, an electric unit may be much cheaper.

However, gas furnaces are less expensive in the long term. If you’re replacing a natural gas furnace—or if you have the piping in place to switch to gas—switching to an electric furnace doesn’t make much financial sense. (Heat pumps are a different story, but we’ll discuss that in a moment.) 

2. Utility Costs of Electric Furnaces vs Gas

Which is more efficient: electric or gas heat? That depends on how you measure efficiency. 

High-efficiency gas furnaces can provide an annual fuel utilization efficiency (AFUE) of around 90% to 98.5%. That means they lose from 1.5% to 10% of the heat energy through flue gasses. Older gas furnaces may have an AFUE as low as 56%.

Electric furnaces don’t lose heat energy through flue gasses, so they’re technically 100% efficient. However, AFUE measures thermal efficiency—not overall heating efficiency. If an electric furnace runs frequently, it may consume more fuel overall than a gas unit. Electric furnaces may also have a harsher environmental impact depending on the source of the electricity, the climate, and other factors.

Some key points to keep in mind:

  • Both types of systems lose heat energy when transferring air through ductwork, which isn’t measured in AFUE. 
  • Electric furnaces heat air to a lower temperature, so they typically operate more frequently than gas furnaces. 
  • Electric furnaces are more thermally efficient, but in most climates, gas furnaces are more efficient overall. 

It is also important to consider local utility rates for gas and electricity. At the moment, gas and oil prices are rising much faster than electricity—leaving many consumers with heating bills well above previous seasons. 

3. Maintenance and Operating Lifespan of Gas Furnaces vs Electric

Gas furnaces output low levels of carbon monoxide when operating. As the system ages, components can break down, increasing the concentration of carbon monoxide and potentially endangering those in your home or building. We know for example that children living in a home with gas cooking have a 42% increased risk of having asthma.

Electric furnaces don’t create dangerous gasses, but they do require occasional maintenance. Overall, electric furnaces are cheaper to maintain but typically cost more to operate.

On average, an electric furnace or gas furnace will operate reliably for 15-20 years, with some units lasting much longer. However, older gas furnaces become less efficient over time. The Department of Energy recommends replacing furnaces or boilers that are more than 15 years old.

When comparing heat pumps vs furnaces, the heat pump is the all around best choice for most projects.

Heat Pump vs Gas Furnace vs Electric Furnace: Heat Pumps the Best Option

For most types of properties, gas furnaces are a better investment than electric furnaces—but they’re not the best heating solution overall.  BlocPower customers installing air source heat pump systems report an average savings of 20-40% compared to inefficient HVAC systems, and heat pumps also offer numerous additional health and comfort benefits. 

Air source heat pumps have been widely used for decades, but recent improvements to the technology have significantly increased their popularity. In the U.S., heat pump sales for newly constructed buildings exceed 40% market share for single-family dwellings and is near 50% for new multi-family buildings, according to the International Energy Agency. 

BlocPower only installs Energy Star rated heat pumps that reliably keep the air in your home or building clean and comfortable.  Some of the advantages of an ASHP compared to a gas furnace or an electric furnace:  

  • Furnaces heat. Air conditioners cool. Heat pumps do both! When you switch to a heat pump system, it becomes the only HVAC appliance you need for heating and cooling.
  • Heat pumps deliver purified air, improving tenant comfort and reducing airborne contaminants. 
  • Heat pumps use a lot less energy, because they are many times more efficient than even the most efficient gas or electric furnace. 
Today’s heat pumps have an Energy Efficiency Ration (EER) or Coefficient of Performance (COP)—both measures of the heating or cooling output divided by the input power—of 3 or better.  A heat pump with a COP of 3 delivers three times more energy as heating or cooling than the system consumes in electricity. Amazing! 
  • Heat pumps are eligible for energy incentives, and financing options like Energy Service Agreements (ESAs) make them an affordable choice for every type of property.

BlocPower specializes in heat pump system design and installation. Many of our clients install their systems for no money down, and our experts are ready to help you cut your utility bills while enjoying clean, efficient heating and cooling. 

To find out if your home or building is a good fit for a BlocPower heat pump system, answer a few quick questions.