Best install setup?
at the moment, I run Proxmox with some VMs.
I thought I would install pfSense as another VM on Proxmox.
Is this a good idea?
I thought running a whole separate computer just for pfSense might use up too much electricity.
I could use a small Raspberry Pi, but I thought this might cause a bottleneck for packet traffic?
There are many people running pfSense virtuallised with no problems. You are relying on the security of the host OS though. The raspberry pi is arm based and pfSense is x86 only so that's a non-starter.
What bandwidth are you pushing? Do you intend to run packages?