As winter approaches, homeowners across the U.S. are facing rising energy bills, making the choice between electric and gas heat a critical financial decision. The Energy Information Administration (EIA) forecasts that heating-oil customers will pay 21% more this winter, while natural gas customers will see a 9% decrease in costs. Electricity users, meanwhile, can expect a 4% increase in heating expenses, though actual costs vary by location, system efficiency, and weather conditions.
Heat pumps emerge as a cost-effective alternative, using 50% to 75% less electricity than traditional electric resistance heating systems, according to the Department of Energy. These systems are now viable even in colder regions like Maine. The EIA predicts warmer temperatures in the Northeast and colder conditions in the West, which could impact heating bills despite national trends. For instance, households in the West heating with natural gas might see higher bills despite the overall decline in natural gas spending.
When comparing specific heating systems, the Efficiency Maine Trust estimates annual costs based on an electricity price of 26 cents per kilowatt-hour. A geothermal heat pump costs about $1,984 annually, while a ductless heat pump runs around $1,814. In contrast, electric baseboard heating can reach $5,715 per year. For natural gas systems, a furnace costs approximately $2,056 annually, with boilers and room heaters slightly lower. These figures highlight how efficiency and system type significantly affect operating costs.
Beyond immediate savings, switching to electric heat pumps can also boost home resale value, with homeowners recovering an estimated 72.1% of project costs at resale, per the 2025 Cost vs. Value report. However, homeowners should weigh installation expenses, potential energy savings, and long-term plans before making the switch. Additional strategies, such as using spot heating, maintaining a thermostat setting of 68 degrees, and conducting home energy audits, can further reduce heating costs.