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How much more expensive is electric heat over natural gas?

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We have electric heat and are considering converting to gas. We need to know if the cost for the conversion is worth it, if the difference between gas and electric isn't great.

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  1. In general natural gas is less expensive, however you need to compare your costs for electricity and natural gas.

    Electricity is billed in kWh.

    Natural gas is billed in therms.

    1 therm = 29.3 kWh

    Keep in mind that resistance heat is nearly 100% efficient. Almost all electricy you pay for is turned into heat. In the case of a modern natural gas furnace, the efficiency can range from 80% to about 95%. The rest of the therms is wasted as heat that goes up the chimney.

    The break-even point is where the cost of electricity equals the cost of natural gas after you dial in the efficiency of the furnace.

    If you're going to install a new natural gas furnace, I'll assume you will buy one that is 95% efficient.  That means for every therm you pay for, you only get 95% of it as heat.  To adjust the formula, we "gross up" the therms by dividing by the efficiency.  The break even point is where therm cost ÷ efficiency = 29.3 kWh/therm x kWh cost.

    therm cost ÷ 0.95 = 29.3 x kWh cost

    therm cost = (29.3 x kWh cost) x 0.95

    simplified: therm cost = 27.8 x kWh cost

    Plug in your local cost per kWh. If your local cost per therm is less than the results of this formula, then the natural gas heat is cheaper.

    In my area the winter cost per kWh is around 8¢ per kWh.

    27.8 x $0.08 = $2.22 per them

    My local cost per therm in winter is actually around $1.00.

    Based on this example, natural gas would be 1.00 ÷ 2.22 = 45% the cost of electricity.

    For an 80% efficient furnace, the numbers are:

    therm cost = (29.3 x kWh cost) x 0.80

    therm cost = (29.3 x $0.08) x 0.80 = $1.88

    Natural gas would be 1.00 ÷ 1.88 = 53% the cost of electricity.


  2. gas used to be half the price of electric heat.

    Talk to your gas company, they will give you up to date prices.

  3. The US Department of Energy claims that gas is 25% cheaper, on average, in the US. Natural gas will be cheaper than LPG. You need to check with your local supplier, since they are reported to have a 2:1 difference in price between different suppliers.

  4. Think twice about it. We have LP and just got our contract for the year.It's over $2 a gallon. I'm sure city gas has gone out of sight.

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