Electric heating is a process in which electrical energy is converted directly to heat energy at around 100% efficiency, using rather cheap devices. Common applications include space heating, cooking, water heating and industrial processes. An electric heater is an electrical device that converts an electric current into heat. The heating element inside every electric heater is an electrical resistor, and works on the principle of Joule heating: an electric current passing through a resistor will convert that electrical energy into heat energy. Most modern electric heating devices use nichrome wire as the active element; the heating element, depicted on the right, uses nichrome wire supported by ceramic insulators.

Alternatively, a heat pump can achieve around 150% - 600% efficiency for heating, or COP 1.5 - 6.0 Coefficient of performance, because it uses electric power only for transferring existing thermal energy. The heat pump uses an electric motor to drive a reversed refrigeration cycle, that draws heat energy from an external source such as the ground or outside air (or the interior of a refrigerator) and directs that heat into the space to be warmed (in case of a fridge, the kitchen). This makes much better use of electric energy than direct electric heating, but requires much more expensive equipment, plus plumbing. Some heating systems can be operated in reverse for air conditioning so that the interior space is cooled and even hotter air or water is discharged outside or into the ground.