Gas or electricity for heat: how to compare

Which costs less to run?

The honest answer is that it depends on three numbers: your delivered gas price, your delivered electricity price, and the efficiency of the equipment. Compare them on the same basis, cost per unit of useful heat.

A worked example with stated assumptions, using round numbers only for illustration: suppose gas delivers energy at 4 cents per kilowatt-hour equivalent and electricity at 16 cents. A 95 percent gas furnace gives heat at about 4.2 cents per kilowatt-hour. Electric resistance heat, with efficiency of 100 percent, costs 16 cents, almost four times as much. A heat pump with a seasonal coefficient of performance of 2.5 would give heat at about 6.4 cents. Your real prices will differ, so substitute them, and remember that fixed monthly charges and delivery fees count too.

Prices change and differ by province, so the point is the method, not the numbers.

Why does a heat pump change the comparison?

Resistance heating converts one unit of electricity to one unit of heat. A heat pump moves heat from outdoor air or the ground into the house, so it can deliver more than one unit of heat per unit of electricity. In cold weather the ratio falls, which is why cold-climate models and good sizing matter. For the mechanics, read the cold climate heat pump guide, and for the direct comparison with gas see heat pump vs furnace.

If electricity is much more expensive than gas where you live, a heat pump may only break even or cost more to run. A dual-fuel arrangement, explained in hybrid heat pump systems, can use the cheaper energy at each temperature.

What about emissions?

Burning natural gas releases carbon dioxide at the house. Electric heating moves the emissions to the power plant, or eliminates them if the grid is clean. Provinces differ widely: some power grids are mostly hydro, nuclear or wind, others still rely heavily on fossil fuels. Alberta's grid has been shifting its mix over time, and the emissions intensity of a kilowatt-hour changes year to year.

That means the emissions comparison is not a fixed truth either. A heat pump on a lower-carbon grid cuts household emissions dramatically; on a gas-heavy grid the gain is smaller but it can still exist because of the efficiency multiplier. Environment and Climate Change Canada publishes grid emissions data, and your provincial energy ministry can tell you the current mix.

How does climate fit in?

Very cold snaps stress electric systems. The coldest evenings are also when the grid is busiest, and when heat pumps run at lower efficiency. A backup source is a reasonable safeguard, and power outages affect both fuels, since gas furnaces need electricity for their blowers and controls.

A different approach is to cut demand before choosing the fuel. A house with low heat loss needs much less of either. The 52 homes at Drake Landing were built to R-2000 standards and used stored solar heat for almost all space heating at their best; most converted to natural-gas furnaces after the system was wound down. Start with the envelope, then compare fuels, and check what drives heating costs in Alberta for the local picture.

What should you do next?

Write down your delivered gas and electricity prices from the latest statements, including the fixed charges, and compute the cost per unit of useful heat for each option you are considering. Ask a contractor for the expected seasonal efficiency of any heat pump in your climate, not just its best rating. Then check current incentives through the Government of Canada energy-efficiency pages, your provincial ministry and your utility, since programs change.

If the numbers are close, other factors can decide: whether you want cooling, how long you plan to stay, how comfortable you are with a backup system, and whether you want to avoid fuel-price swings. Resilience also counts. A house with both options, as in a dual-fuel setup, hedges against price changes in either fuel.

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