For decades, most US households used both electricity and natural gas to power their homes. However, all-electric homes are becoming increasingly popular, with a quarter of all households ditching gas.
This trend will likely continue as natural gas becomes less abundant and more electricity is sourced from renewables like solar and wind.
The rest of this article will discuss this topic in detail, including the cost and benefits of using electricity and gas and what you can do to reduce the running costs of an all-electric home. We’ll also touch on why electricity may soon become the energy of choice for American families.
An all-electric home is generally not cheaper than running gas, at least not just yet. However, the cost gap is quickly narrowing and it fluctuates. To know for sure, check both your local utility company gas and electric prices, along with appliance energy usage then compare.
Here’s a brief history of these two sources of power.
Table of Contents
- Why Electricity and Gas: The Historical Perspective
- Which Is Cheaper: Electricity or Gas?
- Cost Benefits of an All-Electric Home
- How To Reduce Running Costs in an All-Electric Home
- Why the Future Is All-Electric
- Final Thoughts
Why Electricity and Gas: The Historical Perspective
Historically, natural gas used to win the debate hands down on home energy costs. Without question, gas was cheaper than electricity, which was why most American families used both, opting for gas whenever it was viable.
Gas was preferred for heavy-duty tasks such as space and water heating, cooking, and drying clothes. Electricity was used for lighting and to run small electrical and electronic appliances for which gas was not a viable option.
Which Is Cheaper: Electricity or Gas?
Although 25% of US households have gone fully electric, about 50% still use natural gas, according to the US Energy Information Administration (EIA). The compelling case for gas continues to rest mainly on one factor—its lower retail price per unit of energy.
Getting a handle on the comparative cost of gas and electricity is no easy task. Gas is retailed in terms and electricity in kWh (kilowatt-hours), and their prices vary from state to state. In addition, utility companies follow different criteria in setting their rates and distribution fees, further complicating the equation.
Still, some people have done the complicated math and worked out the cost of gas and electricity against a common denominator, albeit without precise results. We’ll spare you the details of their calculations; suffice to say that most of them concluded that electricity is significantly more expensive. In fact, it is up to twice or thrice the price of gas.
However, this does not mean that the running costs of an electrical appliance are two or three times more than that of an equivalent gas unit. Gas-fired appliances are not nearly as energy-efficient as electrical ones and consume much more energy while running.
Cost Benefits of an All-Electric Home
The lower retail price of gas more than offsets the cost benefits of an all-electric home, and there are many benefits to going fully electric.
For example, suppose you’re building a new home or retrofitting an existing one; you can save all the money you would otherwise need to spend on laying gas ducts, pipes, meters, and insulation material.
Also, electrical equipment tends to cost less than gas equivalents, reducing the upfront investment in your home. Electrical appliances are also cheaper (and easier) to install and maintain.
Many states and utility companies in the US offer discounted rates and incentives for using electricity to encourage people to move away from fossil-fuel natural gas.
Banishing gas from your home brings with it some non-cost benefits as well. For one, it keeps you and your family safe by eliminating the risk of gas leaks that could cause a fire or pollute the air in your home.
How To Reduce Running Costs in an All-Electric Home
Are you worried about the running costs of your all-electric home? You’ll be happy to know there are some things you can do to reduce your utility costs.
Some of these measures include:
Install a Rooftop Solar System
If you live in an area with plenty of sunlight, installing photovoltaic solar panels on the roof of your house is one of the most impactful ways to reduce your energy costs.
Your rooftop solar system will generate electricity to at least partially power your all-electric home. And in many states, you can sell the excess electricity to the grid.
However, installing a rooftop solar system involves significant upfront costs, although prices have dropped by more than 60% over the past decade. The Solar Energy Industry Association estimates the pre-incentive cost of an average-sized residential rooftop solar system at roughly $20,000.
It may take you five to seven years to recoup that initial investment, but the pay-off will start immediately and continue throughout the system’s lifetime of 20-25 years.
Use an Electric Heat Pump
The technology behind electric heat pumps has improved so much that they are now arguably the most energy-efficient way to heat homes in winter and cool them in summer. They also provide hot water as a byproduct. That’s like killing three birds with one stone!
A heat pump is a little more expensive than an air conditioner, but you won’t need a separate electric furnace. So it will give you significant savings in upfront and running costs.
If you’re in the market for an electric heat pump, we recommend the Goodman Heat Pump System. It comes with a multi-position air handler, an energy-efficient compressor, a high-capacity muffler, and a 10-year parts limited warranty.
Use Induction Cooking Appliances
Induction stoves run on electricity, but the technology is unlike traditional electric stovetops. Instead, they use an electromagnetic field to channel all the heat to the cookware without heating the cooktop or the surrounding area.
Induction cooking is highly energy efficient; very little heat is wasted, the food is cooked faster, and the appliance cools down in no time.
If you’re not ready to replace your electric hob yet, we suggest you add a Cooktron Double Induction Cooktop Burner to your kitchen. This portable unit can meet all your cooking needs, including steaming, boiling, deep frying, and slow stewing.
Use LED Lighting
Replacing all your incandescent and fluorescent light bulbs with LED lighting is an environmentally friendly way to save on utility costs.
True, LED bulbs are a little more expensive than traditional bulbs, but they consume much less electricity. They also last much longer and emit little or no UV (ultraviolet) rays.
Why the Future Is All-Electric
Federal and state incentives and the innovative energy-saving technologies behind modern electrical appliances of the ilk have helped narrow the cost gap between dual-energy and all-electric homes. As a result, the tide appears to be slowly but surely turning in favor of all-electric homes.
All-electric homes are now a viable option, at least in some places. Of the 25% of US households that have gone all-electric, an overwhelming majority is in the Southeast. The region’s main draw is its mild winters, obviating the need for intensive heating over prolonged periods.
Some other areas are also coming into all-electric play. For example, studies in some cities across the US show that single-family all-electric homes cost less to build and maintain in the long run than similar dual-energy homes.
Impact of Net-Zero
With the US heading towards net-zero emissions by 2050, clean energy supporters have natural gas in their sights—as a fossil fuel, natural gas emits carbon dioxide and other greenhouse gasses like methane and nitrous oxide.
Some US states and cities have imposed restrictions on using natural gas in residential buildings, and more are expected to follow suit. For instance, California will require new homes to be all-electric by 2026 and existing homes by 2035.
Focus on Renewable Energy
Electricity generated from renewable energy sources like solar and wind has increased over the past several years, while production costs have declined.
The Solar Futures Study by the US Department of Energy (DOE) projected that solar energy has the potential to be the source of 40% of US electricity supply by 2035. That’s enough electricity to power all homes in the US.
Significantly, DOE forecasts that the price of electricity for consumers is not expected to increase because savings will fully offset the costs from technological improvements.
With natural gas prices rising, the DOE forecast could mean that electricity will soon become cheaper than gas. And then, it won’t be long before it supplants gas as the fuel of choice for families across the US.
Going all-electric was a costly option in the past, with little to gain except bragging rights. However, in the not-too-distant future, the tables may be turned with all-electric homes becoming the more viable option.
You will do well to think twice before investing in any new big-ticket gas equipment—it will likely cost you more in the long run if, as expected, natural gas becomes more expensive than electricity.
So yes, having an all-electric home may be cheaper than running gas, too, after all.
- US Energy Information Administration: Natural Gas Explained
- US Energy Information Administration: Use of Energy Explained
- RMI: The Economics of Electrifying Buildings
- Learn metrics: Is Gas Or Electric Cheaper
- Rise: Why You Should Choose an All-Electric Home Over Natural Gas
- SEIA: Solar Industry Research Data
- MarketWatch: Are Solar Panels Worth It? (2022 Guide)
- Sitelogic: 10 Advantages of LED Lighting
- Archives: California Climate Action Plan Calls For All-Electric new Homes by 2026
- Energy.Gov: DOE Releases Solar Futures Study Providing the Blueprint for a Zero-Carbon Grid