Understanding Furnace Types: Choosing the Right Fuel

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All furnaces operate on a common principle, but their choice of fuel makes all the difference. When it comes to home heating, electric, natural gas, and oil furnaces are the three primary contenders. Your decision on which type to go with largely hinges on the climate in your region and your heating needs.

Electric Furnace

Cost: Electric furnace installation typically ranges from $1,600 to $6,900. However, it’s essential to note that electric furnaces are more prevalent in regions with mild winters, such as parts of the U.S. where temperatures don’t plummet to extreme lows.
Electric furnaces function as heat pumps or geothermal systems, where they circulate air over heated coils and then distribute this warmth throughout your home via ducts and vents. These units are rated based on their kilowatt consumption. Despite their efficiency, electric furnaces are known for their relatively high electricity consumption.

Natural Gas Furnace

Cost: Installing a gas furnace averages between $3,800 and $10,000, with some premium models reaching up to $12,000. Although newer gas furnaces boast enhanced energy efficiency, they often come with a higher upfront price tag. High-efficiency models, in particular, can cost anywhere from 50% to 100% more than standard variants.
Natural gas furnaces are preferred in regions that experience frigid winters because they tend to provide a cozier heat compared to alternative sources. For example, forced-air systems powered by natural gas can deliver temperatures ranging from 120 to 140 degrees Fahrenheit. This is notably warmer compared to around 85 to 95 degrees Fahrenheit produced by electric heat pumps.

Oil Furnace

Cost: Oil furnace installation ranges from $6,750 to $10,000 or even higher. Oil furnaces are most found in the Northeastern United States, where oil availability is relatively high. However, their cost is elevated due to the expense of importing oil and their relatively lower energy efficiency. Additionally, oil furnaces require more frequent maintenance, including regular oil filter replacements.

Despite their drawbacks, oil furnaces have their advantages. They don’t pose the risk of carbon monoxide leaks or explosions, setting them apart from gas furnaces in terms of safety. They also tend to have a longer lifespan, often lasting five to ten years more than their gas counterparts.
In summary, the choice between electric, natural gas, or oil furnaces hinges on factors like climate, efficiency, and upfront costs. To make an informed decision, consider your region’s weather patterns and heating requirements. Consulting with a heating professional can also provide valuable insights to ensure you select the most suitable furnace type for your home.

With the various types of furnaces available today, homeowners have more choices than ever. The decision usually starts with which fuel source makes the most sense for the home – gas, fuel oil or electricity. No matter which type is best for you, there’s a Carrier furnace designed to fit your needs.

types of furnaces

All of these heating system types provide warm comfort for your home, but the best choice is often based on geographic location, the heating and cooling needs of your home, and heating fuel pricing and availability in your area. Furnaces also vary by energy efficiency ratings, and in many parts of the country are a core component in a home’s air conditioning system. In the sections that follow, we will compare the different furnaces with respect to the advantages and disadvantages of each.


The gas vs electric furnace comparison obviously starts with fuel source, but there are some significant differences between the two in terms of installation and operating costs, expected lifetime and climates for which they are best suited.

Natural gas furnaces typically heat the home faster because they can generate warm air at higher temperatures than an electrical heat system. Because of this and due to generally lower costs for natural gas, these furnaces are best suited for colder, northern climates where the heating season is longer and more intense.

Keep in mind that other differences between gas and electric furnaces include installation and maintenance costs and expected lifespan. In these areas, electric models can have the advantage. Electric furnaces don’t require venting systems or gas hookups and can cost less to purchase and install. Gas furnaces also require more standard maintenance, so those costs will be higher as well. Electric units are often quieter than gas models and often can last longer too.

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Making the decision between gas vs oil heating often comes down to the availability of the fuel source. For example, in rural areas and some older neighborhoods, natural gas pipelines aren’t, making oil heating a good option. Both use internal combustion to create heat, and both are very effective options for colder climates. However, they do have several differences, that we will highlight here:

Natural gas furnaces typically have a lower initial cost for the furnace itself, and the gas is supplied through a pipeline infrastructure which may not be available in certain areas.

Oil burning furnaces convert more heat per BTU than other heating sources, however they typically have slightly lower AFUE efficiency ratings than natural gas models and they also require a storage tank for fuel which can add cost to an oil furnace installation.

Both types of furnaces require regular maintenance, but gas furnaces don’t have the soot and dirt buildup of oil furnaces which can add time and cost for professional cleaning.


Looking at the oil furnace vs electric furnace comparison, let’s start by analyzing upfront costs. Average cost, including furnace installation is about $400 – $600 more for an oil furnace.1 If you need to also install a tank for the fuel oil, add another roughly two thousand dollars for the oil furnace.1 Both types of furnaces are often installed as a central, forced air type of system.

In terms of comfort, fuel oil heated homes heat up faster because oil furnaces create higher temperatures than electric furnaces. And oil furnaces tend to be a better choice for colder climates, while electric furnaces are more commonly used in warmer climates with less need for heating.

Looking at long-term costs, fuel oil prices tend to fluctuate more than electricity. For 2020, the U.S. Energy Information Administration (EIA) was predicting the cost for heating with fuel oil vs electric heat to be very close – around $1200 per heating season.2 However, cost comparisons for the winter of 2014-2015 were quite different – an average of $960 for electric heat vs $1851 for heating oil.2


As we compare gas vs oil vs electric furnaces, there really is no clear winner for all situations. Each has its advantages and disadvantages. The best fit is the one that matches your climate as well as your personal expectations for comfort, initial and long-term costs, and available fuel sources in your area. Here is an overview of pros and cons of each:


Benefits: Low fuel costs
High energy efficiency / low operating costs
Warmer heating temperatures for colder climates
No fuel tank neede

Disadvantages: Requires pipeline infrastructure to deliver natural gas which might not be available in all areas.
Installation requires outside venting and gas hookup which may increase the initial cost.
Potential for natural gas leak or CO infiltration.


Benefits: Generates more heat per BTU than natural gas.
Fuel oil can be delivered to remote areas where gas lines are not available.

Disadvantages: Higher first cost for the furnace compared to natural gas. Higher fuel oil prices and more cost volatility Lower energy efficiency (AFUE) than natural gas models Needs more maintenance due to more dirt and soot buildup, oil filter changes, and chimney cleaning.


Benefits: Lower initial cost for furnace & installation
Longer average lifespan
Quiet operation
No potentially harmful gas byproducts

Disadvantages: Generates lower heating temperatures.
Less capable in colder climates
High AFUE (efficiency) means it’s efficient at converting fuel to heat – but doesn’t reflect how expensive it can be to rely totally on electric resistance heating.

CONTACT us, Still having trouble deciding which option is best for you. Carrier has you covered. Not only do we offer a comprehensive family of furnaces available for residential use, but we also have a nationwide network of experts ready to help determine the right option for your home.

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