Gas vs electric furnace: efficiency, cost, and climate
An electric furnace runs at 100 percent AFUE, a gas furnace at 80 to 98. Why the efficient one can still cost more to run, and which climate suits each.
What this means
A gas furnace burns fuel through a heat exchanger and runs at roughly 80 to 98 percent AFUE depending on whether it condenses. An electric furnace passes air over resistance elements, has no flue loss, and reads close to 100 percent AFUE. The efficient one is not automatically the cheaper to run, because electricity per unit of heat is often dearer than gas.
Equipment and model context
Product classes compared; figures belong to specific matched systems
- Gas furnaces burning natural gas or propane through a heat exchanger
- Electric furnaces heating air over resistance elements with no flue
Running cost depends on local gas and electricity prices, which this page does not know and which change. Efficiency, installation, and climate suitability are described here; the cost result belongs to your tariffs and your building's heat loss.
Criteria compared
- A furnace replacement is due and the home could take gas or electric.
- There is no gas line and adding one is a large extra cost.
- The climate is mild and a full gas furnace may be more than the house needs.
Decision factors
- A gas furnace is capped by combustion and flue loss, so its AFUE sits below 100 even when it condenses.
- An electric furnace has no flue, so nearly all its electrical input becomes heat, which puts its AFUE near 100 while saying nothing about the price of that electricity.
Two ways to make warm air
A gas furnace burns natural gas or propane, passes the hot combustion gas through a heat exchanger, and blows house air across the other side of it. A non-condensing unit sends that gas up a metal flue while it is still warm and gives up the water vapour in it, which holds its AFUE in the low 80s. A condensing unit adds a second heat exchanger that pulls heat back out of the flue gas until water condenses from it and drains away, lifting the AFUE into the mid-90s and letting it vent through plastic pipe.
An electric furnace has no burner and no flue. It passes house air over resistance heating elements, the same principle as a toaster, and almost every unit of electricity it draws ends up as heat in the air. That is why its AFUE reads close to 100 percent. It also means no combustion, no carbon monoxide risk, and no gas line or vent to install.
Efficiency and running cost are different questions
The 100 percent figure tempts people to read the electric furnace as the cheaper one to run. It answers only how much of the input becomes heat. What it costs to run also depends on the price of that input, and in many places electricity per unit of delivered energy is more expensive than natural gas, enough to outweigh the efficiency gap against an 80 percent gas furnace.
The way to settle it for a specific home is arithmetic with local prices: divide the gas price per unit of energy by the gas furnace's AFUE, and divide the electricity price per unit of energy by one, then compare. Do it with current tariffs, because the answer moves as energy prices move.
Where each one is the sensible choice
A gas furnace is the stronger choice where winters are long and cold, where the home already has gas service, and where a high, steady supply air temperature that warms a large space quickly is wanted. In that setting the cheaper fuel does most of the work of the year.
An electric furnace is the stronger choice in a mild climate, in a small or well-insulated home where the heating load is modest, or where there is no gas supply and running one in would be a major expense. It is also worth weighing against a heat pump in those same conditions, since a heat pump moves heat rather than making it and can deliver several units of heat per unit of electricity, which changes the running-cost picture again.
| Point | Gas furnace | Electric furnace |
|---|---|---|
| AFUE | About 80 to 83 percent non-condensing, 90 to 98 percent condensing | Close to 100 percent, no flue loss |
| Fuel cost per unit of heat | Natural gas is often the cheaper energy | Electricity per unit of heat is often the dearer energy |
| Installation | Needs a gas supply, venting or a condensate drain, and combustion safety checks | No gas line or flue, fewer components, simpler and lower-cost to fit |
| Supply air temperature | Higher, warms a large space quickly | Lower, warms the air more gradually |
| Best climate fit | Long, cold heating seasons and homes with gas service | Mild climates, small homes, or where gas is not available |
AFUE tells you how much of the input becomes heat. It does not tell you what that input costs. An electric furnace wins the first question and often loses the second.
- Energy inputGas for one, electricity for the other
- AFUEShare of the input that becomes space heat
- Fuel price per unit of heatSet by the local tariff, not by the furnace
- Running costAFUE and fuel price together, done with your numbers
Questions people ask about this
Is an electric furnace cheaper to run than gas?
Often not, despite its 100 percent AFUE. Electricity per unit of heat tends to be dearer than natural gas, which can outweigh the efficiency gap against an 80 percent gas furnace. Run the numbers with local prices.
Why is an electric furnace 100 percent AFUE?
It has no flue, so there is no combustion gas carrying heat outside. Almost all the electricity it draws becomes heat in the air. AFUE measures that conversion, not the cost of the electricity.
Do I need a condensing gas furnace?
A condensing unit reaches the mid-90s AFUE and vents through plastic pipe with a condensate drain. In a long cold season the fuel saving over an 80 percent unit adds up; in a mild one it may not repay the extra cost.
Should I consider a heat pump instead?
In a mild climate or where electricity is reasonably priced, yes. A heat pump moves heat rather than burning fuel, so it can deliver more heat than the electricity it uses, which an electric furnace cannot.
Evidence recordHow this page was checked
official manufacturer support article, government guidance · checked 2026-09-09
Every technical claim above was written from primary documentation held in the HVAC Bench evidence record: Carrier, Bryant and United States Department of Energy technical literature. Where a source limits a definition to certain models, test conditions, or product classes, that limit is repeated here rather than generalised.
- Documentation class
- official manufacturer support article, government guidance
- Scope of the definition
- Confirm against the exact model manual
- Last checked
- 2026-09-09