Electric resistance heating converts nearly 100% of the energy in the electricity to heat. However, most electricity is produced from coal, gas, or oil generators that convert only about 30% of the fuel's energy into electricity. Because of electricity generation and transmission losses, electric heat is often more expensive than heat produced in the home or business using combustion appliances, such as natural gas, propane, and oil furnaces.
If electricity is the only choice, heat pumps are preferable in most climates, as they easily cut electricity use by 50% when compared with electric resistance heating. The exception is in dry climates with either hot or mixed (hot and cold) temperatures (these climates are found in the non-coastal, non-mountainous part of California; the southern tip of Nevada; the southwest corner of Utah; southern and western Arizona; southern and eastern New Mexico; the southeast corner of Colorado; and western Texas). For these dry climates, there are so few heating days that the high cost of heating is not economically significant.
Electric resistance heating may also make sense for a home addition if it is not practical to extend the existing heating system to supply heat to the new addition.