Is Natural Gas Heat Cheaper Than Electric?

You open your heating bill in January and your stomach drops. Three hundred dollars for electric heat in a 1,200-square-foot house. Your neighbor with gas heat paid half that. You start wondering: should you switch? Or is that just a lucky rate?

This article gives you the straight numbers behind the question. I’ll walk through fuel costs per BTU, the efficiency ratings that matter, the hidden fees that can flip the math, and a strategy that works for a lot of people — spot heating with a small gas unit. By the end you’ll know exactly which fuel type saves you money in your situation.

Mr. Heater

Mr. Heater 30,000 BTU Vent Free Blue…

• Emits 30,000 BTU/hr
• Heats up to 1,000 square feet
• Battery operated electronic ignition (battery included)

See on Amazon

One product that keeps coming up in real-world discussions is the Mr. Heater 30,000 BTU Vent Free Blue Flame Natural Gas Heater. It’s a wall-mounted unit that runs on natural gas and needs zero electricity — its electronic ignition runs on two AA batteries. That matters when power goes out or you just want to heat one room without firing up the central furnace. It covers up to 1,000 square feet, which makes it a practical option for supplementing or replacing electric space heaters.

The Real Price Difference: Fuel Cost Per BTU

Heat is measured in British Thermal Units (BTUs). One BTU raises one pound of water by one degree Fahrenheit. To compare fuels fairly, you convert the cost of whatever you buy — a therm of gas or a kilowatt-hour of electricity — into cost per million BTUs.

As of 2026, the national average for natural gas is about $1.20 per therm. One therm gives you roughly 100,000 BTUs. So a million BTUs (1 MMBtu) costs around $12.00. The national average for electricity is about 14.5 cents per kilowatt-hour. One kWh gives you 3,412 BTUs. To get 1 MMBtu from electric resistance heat, you need 293 kWh, which costs $42.50.

That’s a 3.5-to-1 difference before efficiency enters the picture. But it’s not the whole story.

Efficiency Isn’t Equal: AFUE vs COP

A gas furnace never turns 100% of its fuel into heat. Standard units run 80-83% AFUE (Annual Fuel Utilization Efficiency). High-efficiency condensing models hit 95-98%. That means for every $1.20 you spend on gas, only $0.96-1.18 actually becomes heat.

Electric resistance heaters — baseboard, wall units, space heaters — convert nearly 100% of the electricity into heat. But the generator that made that electricity burned fuel at maybe 35-40% efficiency. You already paid for those losses at the power plant. From a national average perspective, gas still wins on cost per delivered BTU even after accounting for furnace losses.

Heat pumps are a different animal. They move heat instead of making it, so their COP (Coefficient of Performance) can hit 3.0 or higher — 300% apparent efficiency. In mild climates, a heat pump running on 14.5¢ electricity can beat 80% gas. But below freezing, COP drops to around 2.0, and electric resistance backup kicks in. The crossover point varies by local gas and electric rates. You need to run the numbers for your zip code.

For more on that specific matchup, see our comparison of gas furnaces vs electric heaters.

The Hidden Costs That Flip the Math

Fuel cost isn’t the only variable. Three factors can make electric heat cheaper in some homes.

1. Regional price swings. Natural gas costs $0.80 per therm in the Gulf states but can hit $1.80 in New England because of pipeline constraints. Electricity ranges from 9¢ to 33¢ per kWh. In the Pacific Northwest with $0.09/kWh hydro power, electric resistance heat costs about $0.31 per MMBtu — actually cheaper than gas. But that’s rare.

2. Fixed monthly fees. Gas companies charge a base fee — $10-25 per month — just for having a connection. If you have a small house or only heat with gas for four months, those fixed charges add $40-100 a year. Electric bills also have base fees, but they are typically lower ($5-10). When your total heating load is low (say 200 therms a year), the gas connection fee can erase the per-BTU advantage.

3. Equipment and installation. A new gas furnace runs $2,500-6,000 installed. A new central electric heat pump runs $3,500-8,000, but electric baseboard is cheap ($300-500 per room). If you’re retrofitting, the payback period can be 5-10 years. That matters if you plan to move before then.

The best way to see where you stand is to calculate your actual cost per BTU using your utility bills and local rates. Our article on electric heater cheaper than gas walks through that math step by step.

The Unexpected Advantage of Natural Gas Spot Heating

Here’s where the Mr. Heater unit I mentioned earlier comes into play. Central heating — gas or electric — heats the whole house. If you spend most of your time in one room, you’re wasting energy on empty bedrooms and hallways.

A small natural gas wall heater like the 30,000 BTU Mr. Heater lets you heat only the room you’re in. At full output, it burns about 0.3 therms per hour. At national average gas prices, that’s $0.36 per hour of operation. An electric space heater on high uses 1.5 kW, costing $0.22 per hour. But the gas heater heats a larger area (up to 1,000 sq ft) faster, so you might run it half the time.

The real kicker: the Mr. Heater needs no electricity. If you have a gas line in the room and a power outage, you still get heat. No electric heater can claim that. For people in cold climates with frequent outages, that alone justifies the $150-200 investment. Check the current price on Amazon.

Also, using a gas spot heater lets you turn your central furnace down to 55°F all day and just warm the living room at night. That can cut your total gas bill by 20-30% versus running the whole-house system.

For a wider look at the room-level cost fight, read our breakdown of space heaters cheaper than gas heat.

Natural Gas vs Electric Heat – Cost Comparison

Five Questions People Actually Ask

Is natural gas always cheaper than electric heat?

No. In rare cases with very cheap electricity (under $0.10/kWh) or very expensive gas (over $1.80/therm), electric heat can win on fuel cost alone. But for the vast majority of US households, natural gas costs 40-60% less per BTU delivered. Heat pumps close the gap but only in mild climates. Run your own numbers using your utility rates.

What is the cheapest way to heat a house: gas, electric, or heat pump?

For whole-house heating in cold climates, natural gas is almost always the cheapest. Heat pumps come second in moderate climates. Electric resistance (baseboard, space heaters) is the most expensive option in nearly every scenario. The one exception: if you have solar panels, electric resistance can be free during sunny hours.

Does a natural gas heater without electricity save money?

Yes, in two ways. First, you avoid the cost of running a blower motor or fan — that adds 300-500 watts to an electric system. Second, you can spot-heat only occupied rooms. The Mr. Heater model I mentioned uses batteries only for ignition, then burns gas with gravity-fed oxygen. No vampire power draw.

How much does it cost to run a 30,000 BTU natural gas heater per hour?

At full burn, 30,000 BTUs is 0.3 therms per hour. With national average gas at $1.20/therm, that’s $0.36 per hour. If you run it 6 hours a day for a month, you’re looking at about $65. Compare that to a 1,500W electric space heater running the same schedule at 14.5¢/kWh — that’s $39. But the gas heater heats a much larger space faster, so you run it less overall.

Is it worth switching from electric to natural gas heat?

If you own your home and plan to stay 5+ years, the conversion usually pays off in most regions with gas available. The upfront cost of running a gas line and buying a furnace is $3,000-7,000. Payback often comes in 2-4 years of lower fuel bills. But if you rent, live in a mild climate, or your house is extremely well insulated, stick with electric and use a heat pump or spot heating strategies.

What You Should Actually Do

• Pull your last 12 months of utility bills. Calculate your cost per MMBtu for both fuels. Use the formulas above.
• Check if your gas company charges a fixed monthly fee. Add that into your effective per-BTU cost.
• Consider a gas spot heater like the Mr. Heater 30,000 BTU unit for the room you live in most. Turn down your main thermostat.
• If you are building new or replacing a dead furnace, gas is the economical choice for most cold-climate homes.
• If you have cheap electricity (under $0.10/kWh) or a high-efficiency heat pump, stick with electric and focus on insulation and air sealing.
• Never assume the national average applies to your zip code. Local rates vary wildly. Run the numbers.