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Your heating system is the largest energy user in your home, so it’s important that it be efficient, economical and reliable. That’s why more Americans use natural gas heating systems than any other kind.

A heating system’s energy efficiency is measured by its “Annual Fuel Utilization Efficiency” (AFUE). This ratio measures the amount of energy that goes into the system and comes out as usable heat.

Today’s natural gas systems have AFUE ratings ranging from 78 to 97 percent.

The table below shows the estimated space heating operating cost comparisons based on Department of Energy (DOE) energy costs published in May 2007. The analysis is based on a 2,072 square-foot house located in a 5000 Heating Degree Day location. The heating equipment has been selected from the latest Gas Appliance Manufacturers Association (GAMA) and Air Conditioning and Refrigeration Institute directories.

Average Home Heating Cost Analysis Calculated by AGA, based on DOE energy cost estimates
Home Heating Equipment	2007 Average Annual Operating Cost
94%-efficient natural gas furnace	$704.00
80%-efficient natural gas furnace	$826.00
84%-efficient natural oil furnace	$946.00
94%-efficient propane furnace	$1,079.00
80%-efficient propane furnace	$1,079.00
Electric 6.8 HSPF heat pump	$1,079.00
Electric resistance furnace	$1,512.00

Average Water Heating Cost Analysis and Lifetime Energy Savings Calculated by AGA, based on DOE energy cost estimates
Water Heating Equipment	2005 Average Annual Operating Cost
Natural gas - typical	$277.0
Electric - typical	$432.0
Consumer note: over the average life of a water heater, you would spend $1,400 more to use an electric water than a natural gas water heater.

These estimates by the American Gas Association are based on DOE's 2005 representative annual costs of energy, using equipment listed in the latest Gas Appliance Manufacturers Association and Air Conditioning and Refrigeration Institute equipment directories. The estimate is based on a 2,072 square-foot home located in a moderately cold temperature region, such as St. Louis, with updated energy-efficiency features that reflect the 2003 "International Energy Conservation Code." Homes with less insulation, more floor space and located in a colder climate can expect to have higher costs for appliances using all types of energy.