Natural Gas Furnace vs. Electric Furnace – Which is better for your home?

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Clients of mine were recently looking at purchasing a brand new home.  Everything looked great until we came to the furnace!  It was an electric air-forced furnace instead of the more common natural gas models.  My clients were under the impression that it would cost a lot more to heat their home with electricity than .  That couldn’t be right, could it?  We are living in Manitoba, a Hydro-Electric super-producer. Surely, heating a home with an could not be significantly more expensive than heating it with a gas furnace, could it?

This question led me to do a little research and I was quite surprised by what I found.  Each type of furnace has unique advantages, and some disadvantages as well.

Electric Furnace Advantages

While researching this topic, I found that the main advantages of an electric furnace are the fact that it costs significantly less to buy, and to install.  No special gas lines to run, the furnace is also basically a large stove element with a fan blower.  Since they are cheaper to buy AND cheaper to install, we can easily see why home builders are choosing to go with electric furnaces for their new homes.

Furthermore, according to this article by Apollo Heating and Air Conditioning in Minnesota, another advantage for electric furnace is its longevity:  Life expectancy of 20-30 yrs as compared to the 15-20 yrs of an average gas-fired model.  Also, electric furnaces are much quieter during operation.

Gas Furnace Advantages

Natural Gas Furnace vs. Electric Furnace - Which is better for your home?The one main advantage of Natural is the fact that it is a much cheaper source of heat.  Natural gas is a significantly cheaper resource than electricity.   But how much cheaper?  How can we calculate the difference?  Lets take a look.

Calculating the Heating Costs

Thanks to a great article by Hogg Heating and Air Conditioning in Kitchener/Waterloo, I was able to find how much gas or electricity it takes to generate 1 Million BTU’s (British Thermal Units) which is a measure of heat.

With Natural Gas, it takes 28.17 cubic meters (m³) to generate 1 Million BTU’s

With electricity, it takes 293.08 kWh (kilo-watt-hours) to generate the same amount of heat.

Looking at my own Manitoba Hydro Bill I found that the current costs of each of these resources are as follows:

In January, electricity was 10cents by kWh and gas was 28 cents per m³

In April, electricity was the same, but gas was 33 cents.  This is because there is a basic charge with gas of $14 per month, even if you don’t use any.  For example, I used NO GAS in June, and my bill was still $15, which would equate to a huge cost per m³.

So lets average the gas out to $0.31 per m³.

 

To generate 1 million BTU’s in gas would cost:

28.17 m³ x $0.31 = $8.73

To generate the same amount of heat with electricity would cost:

293.08 kWh x $0.10 = $29.30  (over 3 times as much)

 

 

Natural Gas Furnace vs. Electric Furnace - Which is better for your home?
If your ‘furnace’ looks like this, it might be time for an upgrade?

Other factors for consideration

Now there ARE other factors involved.  For starters, an electric furnace is considered 100% efficient.  Every BTU generated is captured and used to heat the home.  Old gas furnaces are often in the 80% range, although the brand new, (also HIGH PRICED) models do get up to 95% efficiency.  Manitoba Hydro has an excellent tool to help home owners and home buyers calculate the potential costs of heating their home, either via gas furnace, electric furnace or even baseboard electric heaters.

Go this this link to help calculate your potential heating costs for your home.  I completed this exercise for a 1500 sq ft 2 storey (brand new) home, and found these results:

Natural Gas Furnace vs. Electric Furnace - Which is better for your home?

Then I compared the heating costs for a newly built 1000 ft bungalow:

Natural Gas Furnace vs. Electric Furnace - Which is better for your home?

 

In each case, the heating estimates are about 2 -2.5 times more expensive in electricity than they are in natural gas.  However, the calculation assumes a lifetime expectancy of 25 yrs in each case, and as we can see from reports above, an electric furnace is expected to outlast a gas furnace by about 10 yrs, offsetting some of those costs.

To to sum it up:  Electric furnaces are cheaper to buy, easier and cheaper to install, run quieter and last longer.  Gas furnaces however, are more cost efficient in heating your home, resulting in savings over the long run.

Note:  This information is correct to the best of MY knowledge, however if you are serious about updating your current heating system, you should consult an expert in the field.  Contact me for a referral:

And remember, if you’re thinking of buying or selling, a house or a condo, in Winnipeg, call me or email me anytime.

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