New Study Shows Natural Gas Appliances Superior for Saving Money, Reducing Emissions

Washington, DC - The American Gas Association (AGA) announced the findings of a new research study, Building for Efficiency: Home Appliance Cost and Emissions Comparison, at a press conference on Tuesday. The report compares the cost and greenhouse gas emissions of heating appliances in new construction homes. It shows that direct natural gas use for home heating is often the lowest cost and lowest emissions option for consumers.

"This report backs up what AGA has been saying for years - natural gas and innovative technologies like RNG are critical to delivering efficient, reliable and cost-effective energy to homes now and in the future," said AGA President and CEO Karen Harbert. "It shows the math behind appliance choices in America and demonstrates that builders and homeowners are choosing high-efficiency gas appliances where they can and that those choices are also leading to reduced greenhouse gas emissions and energy cost savings."

The report is based on publicly available tools and datasets, including models from the U.S. Department of Energy, U.S. Energy Information Administration, and National Renewable Energy Laboratory's Cambium Database, ensuring transparent and open modeling assumptions. It takes into consideration key factors affecting home energy performance-building design, heating, ventilation, and cooling systems, as well as regional climate conditions. The study examines existing and emerging home appliance options such as natural gas heat pumps and the impact of renewable natural gas.

High-efficiency natural gas products are already featured prominently in the market today, and consumers prefer these advanced gas heating appliances in new construction. Three-quarters of the new construction market installs high-efficiency condensing gas furnaces compared to only 8 percent of all compatible high-efficiency central split-unit electric heat pumps.

The study demonstrates that new homes fueled by natural gas save significantly on annual energy costs.

Homeowners choosing natural gas in a baseline household can expect to save on average $1,132 per year compared to their all-electric equivalents. Those who opt for advanced natural gas furnaces will see even greater savings, pocketing an extra $492 annually compared to most advanced cold climate all-electric homes.

The study finds that a typical electric household spends $1,403 more annually on heating costs than a home equipped with a natural gas heat pump. Natural gas heat pumps, which are an emerging appliance option for homes, are also less expensive to install than their cold-climate electric heat pump counterparts and can provide consistent monthly savings-especially during the colder months when electric bills skyrocket by $300 or more.

While cost savings are crucial, the emissions reduction benefits of natural gas are also significant. The study shows that new homes withhigh-efficiency natural gas appliances cut greenhouse gas emissions by 17% over 15 years compared to the typical all-electric household and meet or exceed emissions reductions from homes with a cold climate heat pump - at a much lower upfront and ongoing cost.

The study also highlights groundbreaking advancements in natural gas technologies, including natural gas heat pumps and hybrid systems, which can provide additional solutions for cost-effective emissions reduction. The results suggest renewable natural gas (RNG) offers further affordable emissions reductions, with the potential to offset 96% of the emissions associated with conventional natural gas at a fraction of the cost of full electrification. In 2022, RNG was half the price of electricity per MMBtu, positioning it as an affordable pathway for households looking to reduce their carbon footprint.

Read the full Building for Efficiency: Home Appliance Cost and Emissions Comparison report here.