Gas vs Electric Commercial Heating | Useful Heat & Costs

Compare delivered useful heat and the full equipment decision

Commodity unit conversion alone cannot select a heating technology. Use lifecycle and sensitivity analysis appropriate to the facility instead of a universal claim that either fuel is cheaper.

Worked review: a cheaper input can still produce more expensive useful heat

Suppose two equipment options require different purchased-energy inputs to provide the same useful heat. Comparing only a gas price per therm with an electricity price per kWh ignores both the unit difference and the equipment’s performance. Have qualified engineering staff define the output requirement and the seasonal performance relevant to the premises.

Then apply consistent energy-unit conversions and the full applicable tariffs, including electricity demand charges where relevant and any fixed gas charges that would remain. Add installed cost, maintenance, service capacity, backup requirements and remaining asset life in an appropriate lifecycle model. An incentive should stay contingent until its requirements are verified. A procurement calculator can help with unit arithmetic; it cannot certify equipment suitability or a universal economic winner.

Compare useful heat with a building-specific design

DOE’s large-building boiler electrification guide addresses the design and operating context of commercial heating conversions. Specify the required heat output, temperatures, distribution system and backup needs before comparing fuels. A gas price per therm and electricity price per kWh require both an energy conversion and equipment-performance assumptions. Neither input price alone establishes the lower operating cost. DOE: large commercial building boiler electrification guide; EIA: natural gas volume, heat content and energy units.

Use a lifecycle boundary that includes retained costs

DOE’s boiler purchasing guidance considers sizing and lifecycle costs. Include installed work, service upgrades, maintenance, controls and expected asset life in the project review. Determine whether gas fixed charges remain for other equipment and whether electric demand charges change. Keep incentives contingent until eligibility is confirmed. Have an engineer assess suitability and a finance reviewer assess the model; this is not a universal fuel-switch recommendation. DOE FEMP: boiler purchasing, sizing and lifecycle analysis.

A capital project register that includes service constraints

List the engineer’s useful-heat requirement, equipment performance assumptions, distribution modifications, electrical capacity review and remaining gas uses. Keep energy, demand, maintenance, installation and financing assumptions separate. Show an operating-cost comparison and a lifecycle comparison rather than using the first as a substitute for the second. Obtain written program eligibility before counting an incentive and document the backup plan. A fuel-price scenario cannot establish whether the building’s distribution system or electrical service can support the design.

Use the appropriate planning tool

Gas unit converter: Use consistent energy units as part of the engineering model; this converter does not calculate seasonal equipment performance or lifecycle payback.