Comparing Electric vs. Gas Heating Systems: Which Is More Cost-Effective?
The annual fuel utilization efficiency (AFUE) rating measures the efficiency as a system converts energy into heat. It’s calculated over 12 months. Surprisingly, a lot of people expect a gas heating system to be more cost-effective than an electric one. That’s not always the case. Several factors come into play and determine which is best, let our experts at Air Blue give some insight.
Factors That Impact Cost-Effectiveness
When determining the effectiveness and efficiency of a heating system, you need to look at these factors.
Efficiency Ratings
Older gas heating systems use a continuous pilot light that burns 24/7. The AFUE for these systems is rarely over 70%, making them poorer efficiency. Electronic ignition systems use exhaust fans to help with the flow of gases during combustion. The AFUE for these mid-efficiency systems ranges from 80% to 83%. High-efficiency systems have sealed combustion technology and an AFUE of as high as 98.5%
Electric heating systems often have AFUE ratings of 95% to 100%. Heat pumps are one of the most cost-effective options. However, electricity costs can be higher, which means you spend more on the electricity needed to heat your entire home. You need to consider that when looking at the benefits of electricity over gas.
The Regional Electricity and Gas Rates
Prices for electricity, propane, heating oil, kerosene, etc. are an important factor. Electricity may be more efficient, but it’s also expensive. According to BLS.gov, the average price per kilowatt in Chicago is 16.7 cents.
Looking at a Viesmann electric boiler, the hourly kilowatt usage ranges from 4 kW for a 13,652 BTU system to 14.4 kW for a 49,147 BTU system. By the end of 30 days, the heating costs would range from 2,880 kW to 10,368 kW with all-day usage.
Electricity can be an affordable option if you aim for energy-efficient heat pump systems or add alternative energy sources to lower your electricity consumption, such as solar or wind power. A heat pump system uses about 65% less electricity than electric heating systems. While people worry about the systems not working in extremely cold weather, that’s not the case. Mitsubishi has heat pump systems that still work when it’s as cold as -13º F.
Gas systems can be incredibly efficient. As of September, natural gas is at 29 to 32 cents per therm. One therm is the equivalent of about 1.092 gallons of LP gas or 29.3 kWh of electricity. If it’s available in your area, it is a cost-effective way of heating your home. Gas can produce carbon monoxide, however, so ventilation is critical.
The U.S. Energy Information Administration doesn’t have current information on residential heating oil prices, but wholesale prices are at just over $2.14 per gallon. Residential propane is better at $1.70 per gallon. Prices will fluctuate with supply and demand, however, so prices could rise sharply as winter temperatures arrive. All of this impacts the cost-effectiveness of your boiler or furnace.
Energy Efficiency Throughout Your Home
The system you have is an important part of having a cost-effective heating system, but there’s more to it. If your home’s insulation is poor, heat will escape through walls, gaps near windows and doors, and the roof. You’re losing money heating air within your home that heads right outside.
Newer doors and windows help prevent drafts. Small additions like honeycomb blinds that provide an extra layer of insulation are also beneficial.
Maintenance and Repair Needs
Maintenance is key to keeping your system in prime condition for as long as possible. With regular maintenance, your system remains efficient for as long as possible. Yearly cleanings and inspections should be part of your routine.
You also need to perform some aspects of maintenance on your own. If you have a furnace with an air filter, make sure you’re changing that filter as often as recommended. In a home with many people or pets, you may need to replace the filter every other month. Make sure you do.
Keep outdoor vents clear of snow and ice. You do not want anything blocking the vents as that can create problems with combustion and venting of fumes.
State and Federal Incentives and Rebates
Finally, look at the rebates available to you when you install new heating system equipment. If you have one of the approved heat pump systems installed by a qualified technician, there’s a $2,000 tax credit available through the Inflation Reduction Act.
There are also federal tax credits offered on boilers and furnaces (up to $600). The actual tax credit on these is 30% of the installation and purchase cost, up to the $600 or $2,000 maximum. A geothermal system is 30% of the cost with no maximum. You can also get tax credits on insulation, sealing, and new doors and windows to make your home less drafty. These tax credits are worth 30% or up to $1,200 for sealing and insulation, up to $250 for doors, and up to $600 for windows.
In addition, if you’re a ComEd customer, there are instant rebates on smart thermostats and ventilation fans. Pair these instant rebates with federal tax credits for the greatest savings.
Which System Is Best?
It’s hard to tell exactly which system is best for your home. There are a lot of variables that make electricity better than gas for some or gas better than electricity for others.
The square footage, ceiling heights, number of zones, and age of your home all play a part. It also depends on your current system. Do you have ducts or not? Are your walls brick or wood with vinyl siding? This impacts the installation times and work required to install something like a ventless heat pump system where lines and connections do have to go through the exterior wall.
Because the installation costs do impact how cost-effective a system is, it’s important to talk to an expert. Also, pay attention to the warranty and maintenance options. All Air Blue Heating and Cooling Infinity and Performance equipment comes with a 2-year equipment test drive guarantee, lifetime installation guarantee, and a 3-year maintenance plan. Maintenance alone can help drive down costs and boost how cost-effective a system is.
Air Blue Heating and Cooling specializes in boilers, furnaces, and heat pumps and is happy to discuss your options, the pricing, and how cost-effective one system is over another. Give us a call or schedule an appointment for a free quote online to learn more.
