Water Heater Cost Calculator -- Gas vs Electric

Water Heater Cost Calculator

Estimate your water heating costs by heater type. Compare gas, electric, tankless, and heat pump options side by side to find the most cost-effective choice for your household.

Household & Usage

Energy Rates

Water Temperatures

Efficiency (Energy Factor / UEF)

How Water Heater Costs Are Calculated

The energy required to heat water is determined by the amount of water, the temperature rise needed, and the heater's efficiency:

BTU/day = Gallons/day x 8.33 x (T_out - T_in)

Actual Energy = BTU/day / Energy Factor

Where 8.33 is the weight of one gallon of water in pounds, and the Energy Factor (EF) accounts for the heater's efficiency including standby losses and cycling. A higher EF means less energy wasted.

For gas heaters, energy is measured in therms (1 therm = 100,000 BTU). For electric heaters, energy is measured in kWh (1 kWh = 3,412 BTU). The annual cost is simply the energy consumed multiplied by your local utility rate.

Water Heater Types Reference

Prices are approximate US averages and vary by region and brand. Energy Factor (EF) values reflect the Uniform Energy Factor (UEF) standard used since 2015. Heat pump water heaters have EF values above 1.0 because they move heat rather than generate it directly.

Average Water Heater Operating Costs

Based on a 3-person household using ~50 gallons/day, inlet temp 55°F, outlet temp 120°F, electricity at $0.16/kWh, gas at $1.20/therm.

Tips for Reducing Water Heating Costs

• Lower the thermostat to 120°F. Each 10°F reduction can save 3-5% on water heating costs. Many heaters are set to 140°F by default -- unnecessarily high for most uses.
• Insulate the hot water tank. A tank insulation blanket ($20-$30) can reduce standby heat loss by 25-45%, saving $30-$50/year on older, poorly insulated models.
• Insulate hot water pipes. Insulating the first 6 feet of pipe from the heater reduces heat loss and lets you lower the thermostat further. Pipe insulation is cheap and easy to install.
• Use low-flow fixtures. Low-flow showerheads (2.0 GPM or less) and faucet aerators reduce hot water usage by 25-60% without a noticeable difference in pressure.
• Fix leaky faucets. A hot water faucet dripping at one drop per second wastes 1,600+ gallons per year -- equivalent to 64 showers.
• Run full loads in the dishwasher and washing machine. Partial loads waste both water and energy. Modern dishwashers use less hot water than hand-washing.
• Use cold water for laundry. About 90% of the energy used by a washing machine goes to heating water. Cold-water detergents work well for most loads.
• Install a timer on electric water heaters. Heating water only during off-peak hours can save money with time-of-use rate plans.
• Consider a drain-water heat recovery system. These devices capture heat from hot drain water to preheat cold water entering the heater, recovering 30-60% of heat energy.
• Upgrade to a heat pump water heater. If your electric tank heater is over 10 years old, a heat pump model can cut water heating costs by 50-60%. Federal tax credits may offset upfront costs.

Frequently Asked Questions

How much does it cost to run a water heater per month?

The average US household spends $30-$50 per month on water heating, which is typically 14-18% of total utility bills. Costs vary widely depending on the heater type, energy rates, household size, and climate. Gas tank heaters typically cost $20-$35/month, conventional electric tanks $40-$60/month, and high-efficiency heat pump water heaters $15-$25/month.

Is a gas or electric water heater cheaper to run?

Gas water heaters are usually cheaper to run because natural gas costs less per BTU than electricity in most US markets. A gas tank heater might cost $250-$400/year to operate, while a standard electric tank costs $450-$700/year. However, heat pump water heaters (which run on electricity) can be the cheapest overall option, costing as little as $150-$300/year due to their exceptional efficiency of 200-350%.

How much can I save with a tankless water heater?

Gas tankless water heaters can save 8-34% compared to a conventional gas tank, roughly $50-$150/year. Savings come from eliminating standby heat loss -- the energy wasted keeping a tank of water hot 24/7. The actual savings depend on how much hot water you use; smaller households see larger percentage savings because standby loss is a bigger portion of their total energy use.

What is an energy factor (EF) for water heaters?

The Energy Factor (EF), or newer Uniform Energy Factor (UEF), measures a water heater's overall efficiency by comparing useful energy output to total energy input. It accounts for recovery efficiency, standby losses, and cycling losses. Higher numbers are better. Gas tanks score 0.58-0.70, electric tanks 0.90-0.95, gas tankless 0.80-0.98, and heat pump water heaters 2.0-3.5 (above 1.0 because they move heat rather than create it).

How long does a water heater last?

Gas tank water heaters typically last 8-12 years, electric tanks 10-15 years, tankless heaters (gas or electric) 20+ years, and heat pump water heaters 13-15 years. Lifespan depends on water quality, maintenance, and usage. Annual flushing to remove sediment can extend any water heater's life. Tankless models last longer because they do not store water, which reduces corrosion.

What size water heater do I need?

For tank water heaters, the general guideline is 30-40 gallons for 1-2 people, 40-50 gallons for 2-3 people, 50-60 gallons for 3-4 people, and 60-80 gallons for 5+ people. For tankless water heaters, sizing is based on flow rate (GPM) and temperature rise needed. A household running two showers simultaneously needs about 5-6 GPM.

Are heat pump water heaters worth it?

Heat pump water heaters typically pay for themselves in 3-5 years through energy savings and can save $200-$400 per year compared to conventional electric tanks. Federal tax credits (up to $2,000 as of 2024) and utility rebates can significantly reduce the upfront cost. They work best in warm to moderate climates (40-90°F ambient temperature) and need about 1,000 cubic feet of space around them for airflow.

Does this calculator store my data?

No. All calculations run entirely in your browser. No data is sent to any server, and nothing is stored.

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Privacy & Limitations

Privacy: This calculator runs entirely in your browser. No personal data is transmitted or stored anywhere.

Limitations: Costs are estimates based on average usage patterns. Actual costs depend on local rates, seasonal variations, water heater age and condition, usage habits, and climate. Energy factors can degrade over time. Consult a licensed plumber for specific recommendations.

Water Heater Cost Calculator FAQ