With California's electrification push and evolving energy costs, the electric vs. gas heating decision is more relevant than ever.
Current Options
Gas Heating - Gas furnace (most common) - Gas boiler - Gas wall heaters
Electric Heating - Heat pump (most efficient) - Electric furnace - Baseboard heaters - Mini-split heat pumps
Efficiency Comparison
Gas Furnace - 80-98% AFUE - Loses some heat up flue - Direct combustion
Heat Pump - 200-300% efficient - Moves heat, doesn't create it - Works well in Bay Area climate
Electric Furnace - 100% efficient - But electricity costs more per BTU - Usually not recommended
Cost Analysis (Bay Area)
Current Energy Costs - Electricity: ~$0.30-$0.45/kWh (PG&E) - Natural Gas: ~$2.00/therm
Operating Cost Comparison | System | Annual Heating Cost* | |--------|---------------------| | Gas Furnace (95% AFUE) | $600-$900 | | Heat Pump (HSPF 10) | $500-$800 | | Electric Furnace | $1,200-$1,800 |
*Typical 1,800 sq ft Bay Area home
Key Insight Heat pumps can be cheaper to operate than gas due to their 200-300% efficiency, despite electricity costing more per unit.
Installation Costs
Gas Furnace - Equipment: $2,500-$5,000 - Installation: $1,500-$3,000 - Total: $4,000-$8,000
Heat Pump - Equipment: $4,000-$8,000 - Installation: $2,000-$4,000 - Total: $6,000-$12,000 - Rebates available: $2,000-$4,000
Incentives & Rebates
Heat Pumps - Federal tax credit: 30% (up to $2,000) - PG&E rebates: Up to $1,000 - BayREN incentives: Additional amounts - TECH Clean California: Varies
Gas Furnaces - Limited rebates available - No federal tax credits
Environmental Impact
Gas Heating - Direct CO2 emissions - Methane leakage concerns - Subject to future regulations
Heat Pump - No direct emissions - Cleaner as grid gets greener - Aligned with California climate goals
Bay Area-Specific Factors
Climate Advantage - Heat pumps work great here - Rarely too cold for efficiency - Mild winters = lower heating costs overall
Electrification Mandates - Some cities banning gas in new construction - Future gas restrictions possible - Electric infrastructure being prioritized
PG&E Rate Structures - Time-of-use rates affect electric heating costs - Heat during off-peak hours for savings
Making the Decision
Choose Heat Pump If: - Replacing both heating and AC - Environmental priorities - Want to take advantage of rebates - New construction or major renovation - Home has adequate electrical service
Choose Gas Furnace If: - Replacing furnace only (AC still good) - Budget is primary constraint - Excellent existing gas infrastructure - Shorter-term ownership
Future Considerations
Trends Favoring Electric - Dropping heat pump costs - Improving efficiency - More rebates/incentives - Grid decarbonization - Gas rate increases likely
Hedging Your Bets - Hybrid systems use both - Heat pump primary, gas backup - Flexibility for changing conditions
Recommendation for Bay Area
For most homeowners: - New or combined replacement: Heat pump - Furnace-only replacement: Either option viable - New construction: Electric/heat pump (often required)
The Bay Area's mild climate makes heat pumps an excellent choice. Combined with available incentives, they often make financial sense as well.