New AGA study: natural gas keeps energy bills and emissions lower in new construction

New analysis from the American Gas Association (AGA) finds that natural gas appliances continue to provide significant cost savings for American households while delivering comparable - and in some cases lower - greenhouse gas emissions than all-electric alternatives in new homes.

The updated Building for Efficiency: Home Appliance Cost and Emissions Comparison report evaluates natural gas and electric appliances across multiple scenarios in newly constructed homes, comparing affordability, efficiency and emissions using full fuel-cycle analysis. The study shows natural gas homes save up to $12,000 over 15 years vs. all-electric and underscores a simple reality: energy choices matter for household budgets and for long-term emissions outcomes.

"American families are looking for solutions that keep energy affordable, reliable and that lower emissions," said AGA Vice President of Energy Markets, Analysis and Standards Richard Meyer. "This analysis shows natural gas is not only delivering today - it is part of a smarter, more balanced path forward. The findings underscore the importance of policies that preserve energy choice and support a range of technologies to meet affordability, reliability and environmental goals."

Natural gas delivers meaningful savings for households

The study finds energy bills in natural gas homes cost less than comparable all-electric homes across all scenarios modeled:

• A baseline natural gas home costs $1,030 less per year than an equivalent all-electric home.
• Even when comparing high-efficiency technologies, an advanced natural gas home saves $515 annually compared to a cold-climate electric heat pump.
• Emerging technologies like natural gas heat pumps can deliver $657 in annual savings compared to electric heat pumps.

Lower emissions and lower costs are not mutually exclusive

Natural gas homes can reduce emissions while lowering costs:

• An advanced natural gas home can cut lifetime emissions by 8% compared to a typical all-electric home, even assuming aggressive electric grid emissions reductions.
• High-efficiency natural gas technologies can match or exceed emissions reductions from electric alternatives while delivering thousands of dollars in lifetime savings.
• The analysis evaluates emissions across the full fuel cycle, accounting for energy production, delivery and use - providing a more complete picture of real-world impacts.

Builders and consumers choose natural gas

Market data shows strong adoption of high-efficiency natural gas technologies:

• More than 75% of new natural gas homes install high-efficiency furnaces.
• In moderate to cold climates, natural gas heating is preferred over electric heat pumps by a 4-to-1 margin.
• These trends reflect consumer priorities around affordability, comfort and performance during peak winter demand.

About the study:

Building for Efficiency uses publicly available data and modeling tools, including the U.S. Department of Energy's EnergyPlus model, Energy Information Administration data and the National Laboratory of the Rockies's Cambium database, to compare costs and emissions in new single-family homes.

Read the full report here.