How do gas and electricity get to your home?

Most gas customers receive natural gas through a series of dedicated lines that are connected to a larger gas pipeline. But, due to geological features and distance from gas pipelines, some homes can't be feasibly connected to natural gas. These homes may still be able to use gas energy through periodic deliveries of propane gas, which is stored in a tank on the property. Natural gas appliances must have special fittings installed to be operated with propane, and some gas appliances are not compatible.

Electricity is delivered to homes via a series of high-voltage lines, substations and transformers that extend from nearby power plants. Homes with solar panels, wind turbines, and other sources of renewable energy may also generate their own electricity, which can be used on-demand in the home, stored in a home battery, or sold back to the grid through the local utility.

Gas can't do it all

Gas energy has its benefits, but you don't need it to live a modern life. Electricity, on the other hand, is a must-have for most households.

A home with gas energy can use it to power the furnace, water heater, oven, range and clothes dryer. It can't power the lights, electronics, air conditioner or other appliances – you'll need electricity for that.

Using gas appliances vs. electric: Which is cheaper?

If you boil it down strictly to operating costs, gas is almost invariably cheaper than electricity for powering gas-compatible appliances. The full answer is a little more complicated, however.

Gas is a more efficient heating fuel than electricity, so if you're using gas, you're automatically making an eco-friendly choice. Natural gas and propane rates are also generally competitive with electricity rates, though it's important to note that rates for both gas and electricity are always changing and vary greatly by region. Natural gas can cost more than twice as much in some states as it does in gas-rich states, yet even in the more expensive states, gas still tends to be the more economical heating fuel.

To understand the cost implications of choosing gas or electric appliances in your specific area, you'll need to obtain rate information from your local utilities or energy retailers. If you live in a state with deregulated electricity or natural gas, there may be several companies offering various rates and plans, which can make this a time-consuming step.

To further complicate matters, electricity is sold by the kilowatt-hour (kWh) while gas is sold by therms, British Thermal Units (BTUs) or cubic feet. So, if you're trying to calculate the savings potential of choosing natural gas appliances, you'll need to estimate your gas usage for each appliance using calculators or charts provided by the appliance manufacturer. You'll then need to compare those estimates to the rates in your area using the same unit of measurement.

Read our articles on how to calculate your gas bill and how to calculate your electricity bill for help with converting units and calculating costs. These calculations can make for a lot of number crunching and research, but it's worth taking the time to estimate your potential savings as accurately as possible.

Although finding your potential utility cost savings is important to help you compare new homes, these cost calculations are even more important if you're seriously considering converting what type of power your appliances use. As you'll see in the next section, there are other costs involved in switching to gas or electric appliances.

The cost of conversion

Converting a home from all-electric to electric and gas and vice versa is a job that typically costs at least several hundred dollars, and in challenging electric-to-gas conversions, may even cost a few thousand. No two conversions are exactly alike, so you'll need to collect a few estimates before you know just what it will cost to make the switch.

When switching from all-electric to gas, there may need to be new gas lines installed, which could involve digging in your lawn and cutting holes in your walls. If your home isn't a candidate for natural gas and you opt for propane, installation of the tank is another significant added expense. Switching from gas and electric to electric-only is generally cheaper, but not necessarily cheap, as existing gas lines must be safely capped, and new circuits and wiring may need to be installed.

Because the upfront costs of these conversions can be so high, they often discourage homeowners from going ahead with the switch for the sole purpose of saving a little money each month. While it's true that converting certain appliances to natural gas can eventually pay for itself in utility savings, it could take several years to recoup the cost of installing new gas lines and buying gas appliances.

There may be other reasons why the conversion is worth the expense to you – it's better for the environment, for example, and some home cooks just can't get by without an open-flame burner – but if converting comes at a high cost, it might take quite a while before you start seeing net savings from your investment.

Whatever you choose, safety first

You may think that one of these energy sources is safer than the other, but as long as your home energy infrastructure is properly installed and in good working order, both sources are safe. There are some differences in the risks associated with each, however.

If you have natural gas, there is the possibility of deadly carbon monoxide leaks from malfunctioning appliances, and gas leaks could potentially create a risk of explosion by filling your home with combustible fumes. With electricity, the major risks are electrical shock and fires resulting from faulty wiring or appliances. Both come with their share of precautions and potential costs to make sure your home is safe.

Determining whether choosing natural gas energy is a smart financial move can be a difficult process, and that's not to mention the difficulties of actually making the conversion in an all-electric home. But if you're taking the long view about energy savings, working gas into your energy mix is likely to pay off eventually.

And as we'll see in future installments of this series, gas-powered appliances have perks that some homeowners just can't pass.