Debating whether gas or electric furnaces are more efficient is a difficult task simply because of the factors involved. The price of gas versus electricity varies from place to place; the needs regarding the size of the home and the climate are also factors that could come into play. But there are some ways to look into the subject of gas versus electric heating to determine efficiency so that you can make an informed decision about which to select.

Actual Cost Per Unit

Comparing electricity cost and gas cost can seem like apples and oranges at first. Electricity is measured in kilowatts while gas and propane are measured in British Thermal Units (BTUs). But there is a way to compare the cost — at least at the surface. One kilowatt of electricity is the energy equivalent of 3,413 BTUs. Meanwhile propane provides around 91,000 BTUs per gallon, and natural gas contains 1,000 BTUs per cubic foot. Assuming there is no energy loss in any of these heating sources, which is not true, you can do simple math based on your local cost of kilowatt-hours and gas supplies to determine which is more cost efficient for you.

Energy Loss

Although there are numerous ways to look at the cost efficiency of gas versus electric furnaces, there is little debate about which heating source is the most efficient for the actual heating of the home. An important factor in this comparison is energy loss. That is, how much of the actual energy gets converted to heat for your home and how much of it is lost in the transfer. Since electricity converts 100 percent of its energy to heat in most instances, it is far more efficient in this way when compared to natural gas or propane. Propane and natural gas furnaces tend to top out at about 70 percent conversion efficiency because of heat loss through chimneys or other ventilation and as a result of the combustion process. Also, gas heat loses some of its energy when used for heating liquids like hot water.

Break Even

Regardless of the type of heating sources you compare, there is a break-even point that may serve as a guide in a buying decision. You have no way to know for sure what future prices of electricity or gas will be, aside from the fact that they are both likely to go up in the foreseeable future. Although the consensus is that natural gas is the most cost efficient heat source, there could be a time when that is no longer true. You can use math to figure out the break-even point by looking at local electric and gas bills. Take propane and electricity, for example. According to the Propane 101 website, a gallon of propane is equal to 27 kW of electricity. So look at your local price per kW of electricity and multiply it by 27. If the amount you come up with is less than the amount you can buy propane per gallon, electricity is less costly. If it is above the price of a gallon of propane, propane is cheaper.

Factoring in Installation

If your home is already hooked up to natural gas or propane, the installation of a gas heating system will not be as expensive, but if it is not, installation should be a factor in the decision. Although there are ways to determine efficiency of gas and electric furnaces, efficiency should be weighed against the initial installation cost. In general the gas system will cost more to install than a simple electric system, making gas less cost efficient overall.