The much higher efficiency of electric appliances will help you start saving money today, and even more over time! Here's how.
QuitCarbon clients often wonder about how their costs and energy use will change when they make the switch to electric appliances. The QuitCarbon App provides personalized home assessments and projects your costs and energy use over time.
Pricing Structure of Gas Versus Electric
You have no control over when you use gas.
There is no opportunity to change when you buy gas - if your furnace, water heater, or stove turns on, you are buying and burning right then.
The price of gas that a given consumer pays can vary significantly over the course of each year, and tends to go up as you buy less (because utility bills have fixed monthly charges + per-therm charges) - but it doesn't vary by time of day.
Electricity gives you control.
The price of electricity varies, sometimes dramatically, by location, time of day, and time of year.
There is substantial opportunity to control when you buy electricity throughout the day - such as when you charge your EV, and how you use your home batteries and electric home appliances like heat pump water heaters.
Thanks to apps and smart home devices, you don't even have to think about these things; your house's systems simply optimize their electricity use based on your needs and the cost of electricity.
This strategy is called demand response (DR) which allows homeowners to adjust their electricity usage during peak demand periods in exchange for financial incentives, helping to stabilize the power grid. By participating in DR programs, homeowners can reduce their energy consumption, such as by shifting the use of appliances or adjusting thermostat settings, which can lead to lower electricity bills. This collaborative effort between consumers and utilities not only enhances grid reliability but also supports the integration of renewable energy sources, making energy use more efficient overall.
Gas prices will rise far faster in the future than electricity prices.
You don't buy an appliance for just a month, you invest in it for 10+ years - so any consideration of power prices now misses the much, much larger and more important picture of what you'll spend over the 10+ year lifespan of the appliance.
Gas versus Electricity Cost Comparison
Here's a bit more information on energy and cost equivalence between gas and electric:
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One therm of gas is 100,000 BTU
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1 kWh of electricity is 3,412 BTU
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Therefore, 1 therm of gas is equal to about 29.3 kWh
If they produced the same amount of heat by using them in a water heater, those 29.3 kWh at $.35 / kWh would cost about $10.25 to produce the same amount of heat as a $2.35 therm. Or:
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$1 buys 2.85 kWh x 3412 BTU/kWh = 9,724 BTU of heat
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$1 buys .42 therms of gas = 42,000 BTU of heat
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Electricity is 4.32 times more expensive -- yikes!
But -- heat pumps are way more efficient than gas appliances. For example, a traditional gas tank water heater is only 60% efficient, meaning 40% of the heat it produces from burning gas goes up the chimney. A heat pump water heater, on the other hand, is about 350% efficient. Because it moves heat rather than produces it, it can transfer about 3.5 units of heat from the surrounding air into the water tank for every unit of energy it puts in. So:
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$1 buys 2.85 kWh x 3412 BTU/kWh * 350% efficiency = 34,034 BTU of heat
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$1 buys .42 therms of gas * 60% efficiency = 25,200 BTU of heat
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Electricity is about 25% less expensive!
There's some research coming out that shows that the 60% is actually a best-case scenario, and that many gas tanks lose substantial efficiency as they age; also, that heat pump water heaters may be performing significantly better than 350%, particularly in California's mild climate.
Gas furnaces are a little more efficient than water heaters -- about 80% -- but we estimate that you shouldn't pay more at today's rates. Also, the CPUC projects that gas prices will rise faster than electric in coming years, so savings should increase. Finally, if you're overproducing solar, that is electricity that is probably much less expensive (depends on your installation costs) than the $.35 / kWh grid electricity.