Gas Heat vs. Electric Heat in Phoenix: What It Actually Costs
Three ways to heat a Valley home, three very different operating costs. Here is how they compare and which one your house probably has.
Phoenix homes heat one of three ways: a natural gas furnace, a heat pump, or electric resistance strips. Heat pumps are typically the cheapest to operate in this mild climate, gas furnaces are competitive where gas service exists, and electric resistance heat is by far the most expensive — roughly three times a heat pump for the same delivered heat.
The three systems, plainly
Gas furnace. Burns natural gas to heat air directly. Modern units convert 80 to 96 percent of the fuel energy into delivered heat. Warm supply air, typically 120 degrees or more.
Heat pump. Moves heat from outdoor air into the house using the refrigeration cycle. Because it moves heat rather than creating it, it can deliver two to four units of heat per unit of electricity. Supply air is cooler, around 90 to 100 degrees, which feels different even though the house reaches the same temperature.
Electric resistance. Electricity through a heating element, exactly like a toaster. Perfectly efficient at converting electricity to heat — one unit in, one unit out — which sounds good and is actually the problem, because a heat pump beats one-to-one by a wide margin.
Which one do you have?
Homeowners are frequently unsure, and it is easy to determine.
- Is there a gas meter at the house, and does the indoor unit have a gas line and a flue pipe? That is a gas furnace.
- Does the outdoor unit run in winter when the heat is on? That is a heat pump.
- Does the thermostat have an EM HEAT or EMERGENCY HEAT setting? That indicates a heat pump with electric backup.
- No gas service, and the outdoor unit does not run in heating mode? That is likely electric resistance heat only.
The relative operating cost
| System | Relative cost to run | Notes |
|---|---|---|
| Heat pump | Lowest | Delivers 2–4 units of heat per unit of electricity in Valley conditions |
| Gas furnace (90%+) | Low to moderate | Depends heavily on gas rates; competitive where service exists |
| Gas furnace (80%) | Moderate | Older equipment wasting 20 percent up the flue |
| Heat pump on aux heat | High | Strip heat running when it should not — a configuration problem |
| Electric resistance only | Highest | Roughly three times heat pump cost for the same delivered heat |
The numbers move with utility rates, which change. What does not change is the ordering: moving heat beats making heat, and making heat with electricity is the most expensive way to do it.
Why the auxiliary heat trap costs so much
A heat pump with electric backup can quietly become an electric resistance system. If the heat pump itself fails — a seized reversing valve, a failed defrost board, low refrigerant — the thermostat falls back to strip heat and the house stays warm. Nothing feels wrong.
The bill tells the story two months later. This is one of the most common expensive HVAC problems in the Valley precisely because it produces no comfort complaint.
The second version is a configuration problem rather than a failure: auxiliary heat lockout never set, so strip heat engages on a mild morning simply because the setpoint jumped. Same result, cheaper fix.
Should you convert?
Converting from electric resistance to a heat pump is frequently worth it in Phoenix, and it is a straightforward conversion when there is already an outdoor unit — the air conditioner is replaced with a heat pump and the strips become backup rather than the primary source.
Converting from gas to a heat pump is a closer call. If the furnace works and is under ten years old, replacing functioning equipment rarely pays back. If the furnace is due anyway and you are also replacing the air conditioner, a heat pump replaces both with one system.
Converting from a heat pump to gas almost never makes sense here, because the mild Valley winter is exactly the condition where a heat pump performs best.
The things that move the bill more than fuel choice
Before optimizing fuel type, look at the boring items. A heat pump running auxiliary heat unnecessarily costs more than any fuel choice difference. Leaking attic ductwork loses heat in winter exactly as it loses cooling in summer. A filter that has not been changed since summer restricts airflow and makes a furnace trip on high limit.
Those three account for most of the surprising winter bills we investigate.
Frequently asked
Is gas or electric heat cheaper in Phoenix?
A heat pump is usually cheapest to run in the Valley because our mild winters keep it in its efficient range, delivering multiple units of heat per unit of electricity. Gas furnaces are competitive where gas service exists. Electric resistance heat is by far the most expensive.
Why is my electric bill so high in winter with a heat pump?
Almost always auxiliary electric strip heat running when it should not — either because the heat pump itself has failed and the system fell back to strips, or because the auxiliary heat lockout was never configured. Both are worth checking immediately.
How do I know if I have a heat pump or a furnace?
If the outdoor unit runs when the heat is on, it is a heat pump. If the indoor unit has a gas line and a flue and there is a gas meter at the house, it is a furnace. A thermostat with an EM HEAT setting indicates a heat pump with electric backup.