Does Electricity Cost More Than Gas for Homes and Cars?

Comparing electricity and gas costs for homes and cars is complex. Energy expenses depend on various factors. The price you pay for energy is influenced by the specific application, the efficiency of the equipment used, your location, and your personal consumption habits.

Understanding Residential Energy Costs

Residential energy costs involve comparing electricity and natural gas for various household applications. Heating, water heating, and cooking are primary areas where both energy sources compete. Appliance efficiency significantly impacts overall cost, often outweighing raw fuel price differences.

For home heating, natural gas furnaces, electric heat pumps, and resistance heating systems are compared. Natural gas furnaces achieve an Annual Fuel Utilization Efficiency (AFUE) of 80% to over 90%. Electric heat pumps are highly efficient, moving heat rather than generating it, with high Seasonal Performance Factors (HSPF) and much higher effective efficiencies than resistance heating. Electric resistance heating converts nearly 100% of electricity into heat, but this process can be more expensive per unit of energy delivered compared to natural gas or heat pumps.

Water heating offers choices between gas and electric units. Conventional gas water heaters have a Uniform Energy Factor (UEF) ranging from 0.60 to 0.85, while electric resistance tank water heaters range from 0.75 to 0.95. Heat pump water heaters offer even higher efficiencies, with UEFs between 2.75 and 3.5. Tankless water heaters, both gas and electric, heat water on demand, avoiding standby heat loss and offering UEFs from 0.80 for gas to 0.95 for electric. While electric heat pump water heaters often have lower operating costs due to their efficiency, their initial purchase price can be higher.

Cooking appliances, such as ranges and ovens, are another comparison point. Gas ranges convert 40-55% of their energy into cooking heat. Traditional electric coil or smooth-top ranges are more efficient, around 74%. Induction cooktops, which use electromagnetic fields to directly heat cookware, are the most efficient, achieving 84-90% energy transfer. Higher efficiency means less energy wasted, potentially lowering operational costs for electric induction cooking despite average electricity unit costs.

For direct comparison, convert natural gas and electricity costs to a common energy unit, such as British Thermal Units (BTUs). One kilowatt-hour (kWh) of electricity contains approximately 3,412 BTUs, while one therm of natural gas contains 100,000 BTUs. With average residential electricity prices around 17 cents per kWh, and natural gas commodity costs in the range of 50 to 60 cents per therm, the cost per BTU can be calculated. However, actual operational cost depends heavily on appliance efficiency in converting raw energy into usable heat or power.

Comparing Transportation Fuel Costs

Comparing fueling costs for electric vehicles (EVs) and gasoline-powered internal combustion engine (ICE) vehicles is common. This comparison requires understanding different units and charging scenarios. Cost per mile is a common metric for evaluating vehicle economic efficiency.

For gasoline vehicles, cost per mile is calculated by dividing price per gallon by the vehicle’s miles per gallon (MPG). As of mid-2025, the national average price for regular gasoline is around $3.16 to $3.17 per gallon. A 30 MPG vehicle would cost approximately 10 to 11 cents per mile to fuel. Higher MPG vehicles will naturally have a lower cost per mile.

Electric vehicles (EVs) use kilowatt-hours (kWh) for energy, with efficiency expressed in miles per gallon equivalent (MPGe). The Environmental Protection Agency (EPA) defines 33.7 kWh of electricity as the energy equivalent of one gallon of gasoline. EVs have a wide range of efficiencies, from 53 MPGe to 140 MPGe for 2024 models. Higher MPGe indicates the EV travels more miles per unit of electrical energy, leading to lower per-mile costs.

EV charging costs vary significantly by location. Home charging is the most economical option, with the average residential electricity rate being around 17 cents per kWh. This translates to a cost per mile of 4 to 5 cents, assuming an average EV efficiency. For example, charging a 40 kWh battery at home would cost about $6.80 for a full charge.

Public charging, especially DC fast charging, can be more expensive. Level 2 public chargers might cost around 20 cents per kWh, while DC fast charging can range from 40 to 60 cents per kWh. This higher cost can make EV per-mile costs comparable to, or exceed, gasoline vehicles, especially for long road trips requiring frequent fast charging. However, most EV owners primarily charge at home, which maintains a significant cost advantage over gasoline.

Charging habits impact EV ownership costs. Home charging, particularly during off-peak hours, yields greater fuel cost savings. Conversely, frequent reliance on public DC fast charging can diminish these savings. Upfront EV cost and charging infrastructure availability also factor into total ownership cost, beyond per-mile fuel expense.

Key Variables Affecting Energy Expenses

Energy expenses fluctuate based on many variables influencing supply and demand. These factors make a direct, universal comparison between electricity and gas costs challenging.

Regional price differences are a primary variable, as utility rates for electricity and natural gas vary significantly nationwide. Electricity rates can range from about 11 cents per kWh in some regions to over 40 cents per kWh in others, influenced by local generation sources, transmission costs, and regulatory structures. Natural gas prices also exhibit regional variations due to production proximity, infrastructure for transportation, and local supply and demand dynamics. These geographical disparities mean that what is cheaper in one area might be more expensive elsewhere.

Utility providers implement different billing structures, including time-of-use (TOU) rates for electricity. Under TOU plans, the price of electricity changes throughout the day, with higher rates during peak demand periods (e.g., late afternoons and evenings) and lower rates during off-peak hours (e.g., overnight). This pricing model incentivizes consumers to shift energy-intensive activities to off-peak times, which can significantly impact an electricity bill. Standard flat-rate plans, conversely, charge the same price per kWh regardless of the time of use.

Equipment energy efficiency is another variable impacting operational costs. Appliances and vehicles with higher efficiency ratings consume less energy to perform the same task, directly reducing the overall expense regardless of the raw fuel price. A highly efficient natural gas furnace will cost less to operate than a less efficient one, even if the price per therm remains constant. Similarly, a high-MPGe electric vehicle will incur lower charging costs per mile than a less efficient EV.

Individual usage habits and local climate influence total energy bills. Colder climates necessitate more heating, while hotter climates increase air conditioning demand, both of which drive up energy consumption. Within a given climate, personal choices such as thermostat settings, frequency of appliance use, and driving style directly translate into higher or lower energy expenditures. These behavioral factors can alter the perceived cost effectiveness of one energy source over another.

Market fluctuations play a role in energy pricing. The cost of natural gas is heavily influenced by supply and demand, weather patterns, storage levels, and economic growth. Since natural gas is a fuel source for electricity generation, its price directly affects electricity rates. Global events, supply chain issues, even financial speculation can cause energy prices to shift, making long-term cost predictions complex.