Natural Gas, Oil or Electric? How to Choose the Best Home Furnace

When selecting a new furnace for your home, one of the first decisions you'll need to make is which energy source to use: natural gas, heating oil, or electricity. Each type comes with its own set of pros, cons and ideal installation scenarios to consider before deciding which is right for your needs and budget.

Furnace Basics

First, let's review some furnace fundamentals.

Furnaces heat air or water to provide central heating throughout your home. During operation, a heat source fuel like natural gas or heating oil is burned by the furnace combustor. This heat is transferred to the air flowing past the heat exchanger, which is then pushed through ductwork to warm your living spaces through vents and registers.

All furnaces are rated by an Annual Fuel Utilization Efficiency (AFUE) percentage, which measures how efficiently it converts fuel to heat over the course of a typical year. The higher the AFUE, the more heat you get from each unit of fuel for improved energy efficiency.

Main Furnace Components

• Heat exchanger - Transfers heat from combustion to the air
• Burners - Mixes fuel with air for combustion
• Blower - Forces heated air through your home's ductwork

Types of Furnaces

• Forced air - Most common. Heats air to provide warmth.
• Hot water - Heats water instead of air.
• Steam - Converts water to steam for distribution.

Natural Gas Furnaces

Natural gas is the most popular energy source for home heating furnaces, and for good reason. It combines exceptional efficiency with reasonable operating costs compared to other fuel options. But it does require easy access to existing gas lines from your utility provider.

Benefits of Natural Gas

• Very energy efficient - AFUE ratings up to 98.5%
• Lowers utility bills compared to electricity or oil
• Considered a clean-burning fuel
• Fuel transport isn't a concern like oil delivery
• Flexible installation scenarios

Potential downsides primarily relate to access to an existing natural gas hookup to your home. If gas lines haven't been run in your neighborhood, the cost of installing them could be prohibitive.

Natural gas furnaces also require annual maintenance from an HVAC technician, typically costing $75-$150 per appointment.

Ideal Natural Gas Furnace Installations

Since accessing an affordable supply of natural gas is the key factor, natural gas furnaces work best in locations already connected to gas main utility lines, including:

• Most suburban neighborhoods
• Urban housing
• Townhouses and duplexes

Heating Oil Furnaces

Oil furnaces utilize heating oil, sometimes called fuel oil, to generate heat. Compared to natural gas, heating oil fires at a higher temperature to deliver more heat output per British thermal unit (BTU). This exceptional ability to produce high heat makes oil burners well suited to extremely cold regional climates.

However, heating oil furnaces also come with downsides. Oil fuel prices closely follow unpredictable global oil and gas markets, making wintertime heating bills less predictable. And you need room for a large outdoor oil storage tank with the hassle of arranging periodic fuel deliveries.

Benefits of Heating Oil

• Powerful cold weather heating performance
• AFUE ratings matching natural gas
• No connection to gas line required

Before selecting an oil furnace, carefully consider the following drawbacks:

• Heating oil pricing fluctuates seasonally
• Upfront costs higher than natural gas
• Need space for outdoor tank in yard
• Arranging fuel tank refilling required
• More repairs and maintenance expected

Ideal Oil Furnace Setups

The extreme heating output makes heating oil perfect for frigid winter areas like the Northeast and Midwest regions. Rural homes without access to natural gas pipelines also tend towards oil furnaces out of necessity. Consider an oil furnace if you:

• Regularly experience sub-zero winter temperatures
• Have inexpensive or free access to fuel oil
• Don't mind maintaining the unit and filling the tank

Electric Furnaces

Like any appliances and devices in your home, electric furnaces use household electricity to generate heat. Lacking combustible fuel, they have fewer maintenance needs than gas or oil furnaces. Their ability to reach full heating capacity quickly also makes them faster to respond to thermostat setting changes.

However, electricity prices are rarely stable long term, and power outrages halt all heating until service is restored. Weigh these key pros and cons when considering an electric furnace:

Benefits

• Available anywhere with an electric hookup
• Fast heating response times
• Fewer repairs or need for service calls

Drawbacks

• Higher energy bills overall
• No heat when the power goes out
• May require backup generator

Their plug-and-heat functionality makes electric furnaces easiest to install in homes both rural and urban. But best suited for temperate climates without extreme wintertime lows or frequent heavy snow producing power interruptions.

Choosing Between Furnace Types

When deciding between a natural gas, oil or electric furnace for your home, start by matching the unit's strengths to your heating needs and location:

Climate Considerations

• Colder is better for heating oil furnaces
• Temperate is best for electric
• All climates suited for gas if available

Location Factors

• Natural gas great if existing line access
• Oil ideal for rural neighborhoods
• Electric furnaces work anywhere

Then explore the projected installation and lifetime ownership costs using current local energy rates. An experienced technician can assess your home infrastructure and provide pricing for different furnace types tailored to your specific needs.

Hybrid Heating Systems

Rather than limiting yourself to just one furnace fuel source, a hybrid heating system leverages dual technology for improved performance. Most commonly, an electric heat pump furnace will be paired an alternative furnace for supplemental heating. This balances the heat pump's impressive efficiency with a secondary fuel for the coldest days.

Pairing an electric furnace with one fueled by natural gas or heating oil also provides built-in heating redundancy. If the power goes out or primary heating system requires service, the secondary system helps prevent cold indoor air during winter.

Alternate Efficient Heating Options

Furnaces aren't necessarily your only choices for warming your rooms. Additional heating methods able to reduce your seasonal energy consumption include:

• Geothermal heat pumps leverage underground warmth for efficient heating and cooling.
• High performance wood pellet stoves cleanly burn renewable biomass fuels.
• Radiant floor heating uses tubing underneath flooring to gently heat interior spaces.
• Solar thermal technology harnesses heat from sunlight to offset furnace usage.

An HVAC professional can advise if these alternative setups may be right for your residential heating needs.

Get Professional Assistance

Don't go it alone when replacing your home's furnace. Consult qualified local heating companies before deciding which system best matches your expectations, infrastructure, and budget.

An established HVAC contractor will:

• Inspect your existing setup
• Consider layout, size and heating requirements
• Provide fair bids for recommended furnace solutions
• Manage all permits and professional installation tasks

Don't settle for the first bid. Get estimates from at least 3 highly reviewed providers to find the best combination of price and service quality for your next furnace.

Choosing and installing a new high-efficiency furnace for your home is a complex decision. Take time to thoroughly assess the climate, infrastructure, costs and capabilities before deciding between natural gas, heating oil or electric models. Leading HVAC installation pros have the insights and experience to point your home heating in the right direction. Connect with top-rated local experts for heating system estimates tailored specifically for your residential property.