Cost of Heating With Natural Gas vs. Electric Heat Pump

Heating homes is one of the most important uses of energy in residential areas. Homeowners can choose between several different heating options, but the decision often comes down to two, either gas or a heat pump. For gas, people can choose between natural gas and propane, while with a heat pump homeowners usually have both the heat pump function and the electric heating element included with the pump. These various methods of heating all have their associated costs.

Natural Gas

Natural gas is only available where natural gas pipelines have been installed, and homeowners can run a line into their houses. Natural gas, like other energy sources, fluctuates widely in price from area to area and between energy companies, so giving a precise price is impossible. Typically it is unfiltered and takes less effort to mine and pump than other types of energy, so its costs are very low. A gas water heater, for instance, costs about $350 to run in a year, less than the price of conventional oil at around $600.


Propane is used just like natural gas, but it is a purer type of fuel made from filtering petroleum byproducts. It can be easily condensed and shipped, making it a useful option for people who do not have access to natural gas lines. Homeowners can install propane tanks on their property and have them refilled as needed. These qualities add extra costs to the price of propane, making it a more expensive gas option than natural gas -- sometimes costing twice as much.

Heat Pump

A heat pump uses a refrigerant to transfer heat from other sources, such as the outside air, into the home. It does not use a fuel to create heat and so is much more efficient that other options, including natural gas heaters. A water heat pump will only use around $190 worth of energy per year, almost half of what a natural gas heater must use. These savings are somewhat offset by the higher purchasing and installation costs of a heat pump.

Electric Element on Heat Pump

Heat pumps have one primary difficulty: they cannot operate well in cold temperatures. There is no thermal energy in the air to pull into the house, so the pumps lose their efficiency and, as temperatures drop in the 40s in Fahrenheit, the pump is not able to move much heat at all. For this reason, heat pumps have an electric element attached that can provide back-up heat, but this element is one of the most expensive methods of heating, costing as much around $500 for a year of heating.