When Heating with Gas Costs More

May 25, 2021

HEET commissioned the Applied Economics Clinic to project heating costs in Massachusetts. The results predict that by 2030, heating with gas in Massachusetts will become more expensive than heating with efficient electric heat pumps.

Inflection Point: When Heating with Gas Costs More shows that rising costs mean gas customers are likely to flee from the gas system, making it a stranded asset. Remaining customers will be forced to shoulder a larger portion of the fixed-cost system. 

AEC’s analysis is based on the future cost of natural gas versus electricity in Massachusetts. To reach the state’s goal of net zero carbon emissions by 2050, we must move our buildings’ energy needs to electricity, then produce that electricity with renewables. 

The study compares annual heating bills for a gas furnace versus an electric heat pump in an average-sized home in Massachusetts. While gas is currently less expensive, the study finds that because the statewide replacement of gas mains increases the price of gas, and because air-source pumps are becoming more efficient, heat pumps becomes the cheaper option by 2030. Geothermal ground source heat pumps are already less expensive for customers.  

Gas furnaces have an average lifespan of 15 to 30 years. When households buy gas heating systems now, they will “end up paying rising energy costs over that lifespan.” 

In order to make lower energy bills accessible and meet state emissions mandates, the AEC recommends:  

  • Incentives for heat pump purchase. 
  • Subsidies for low-income and rental housing heating and insulation upgrades. 
  • Education and outreach to increase information availability and access.

The full report is posted online