Is a Gas Water Heater Cheaper to Run Than Electric?

About 20% of your household’s energy usage goes on heating the water. That’s a lot of money, and, naturally, you’d be looking for ways to lower your water heating expenses.

In general, gas water heaters are cheaper to run than electric units simply because natural gas is not as expensive as electricity. However, a gas appliance has a higher upfront cost and, in a lot of cases, a shorter lifespan.

Pros and Cons of Electric Water Heaters

Advantages of Electric Water Heater

  • Lower upfront cost

When it comes to the actual unit, electric water heaters are, in the majority of cases, more affordable than gas units.

The installation process of an electric water heater is generally simpler and quicker which affects the cost as well. 

Read: Why Gas Hot Water Heater Is Not Heating? – Troubleshooting Guide

  • Efficiency

In a gas water heater, a lot of heat is lost during the venting process. Electric units do not need to get rid of the combustion gases which makes them a lot more efficient – their EF numbers are usually higher than 2.0.

  • Availability

The majority of homes are tied to the electric grid. As a result, the buildings already have an available source of electricity which is not always the case with gas.

  • Safety

You would never have to deal with a gas leak, in case you have an electric water heater.

  • Easy operation and maintenance

You wouldn’t have to relight the pilot light or check the gas valve. All you should do to switch an electric water heater on is literally push a button.

Of course, proper maintenance is extremely important for any type of water heater. But when it comes to electric units, you wouldn’t have to think about inspecting the gas line and clearing the flue.

Read: Gas Water Heater Thermocouple Possible Issues

Disadvantages of Electric Water Heater

  • A higher recovery rate

The combustion process generates heat faster (and the actual heat is hotter). So, you would have to wait for a bit longer for your water to heat up, in case you have an electric water heater.

  • Operating costs

At the moment, the cost of electricity in the majority of states is higher than that of natural gas. Even though you wouldn’t have to pay as much for the actual unit, the operating costs of an electric water heater might be relatively high.

It goes without saying that electric units won’t be able to function if there is a power outage. However, a lot of gas units nowadays have electronic ignition that fully depends on electricity as well.

Read: Why Water Heater Is Leaking?

Do Electric Water Heaters Use a Lot of Electricity?

An electric water heater can consume anywhere between 400 and 3.000 kWh/year. The exact number is going to depend on the unit’s capacity, its energy efficiency, and the household’s water consumption.

By the way, tankless water heaters are about 24-34% more energy-efficient than the models with a tank (in households that use less than 41 gallons of hot water daily).

How Much Does It Cost to Run a 50 Gallon Electric Water Heater?

If you run a 50-gallon, 5.500-watt electric water heater for 3 hours every day (with a rate of $0.16 per kilowatt-hour), then you would be spending around $781 per year.

Read: Is Furnace And Water Heater The Same?

Pros and Cons of Gas Water Heaters

Advantages of Gas Water Heater

  • Lower energy costs

Even though quite a lot of heat from the gas water heater gets lost during the operation process, lower fuel costs will eventually balance out the heat loss.

That is because natural gas prices are consistently 2-3 times lower than electric prices (with rare exceptions).

  • Faster heating

An average electric water heater might take twice as long as the gas unit to heat up the same amount of water. If you have a large household, then it might be a better decision to go for a gas appliance that would be able to keep up with the hot water demand.

Disadvantages of Gas Water Heater

  • Higher upfront cost

Gas models are typically more expensive than electric water heaters. Moreover, you should be prepared to pay more for installation and maintenance.

  • Shorter lifespan

In general, electric units last longer than gas water heaters simply because the latter are subjected to more wear and tear due to the combustion process.

  • Complicated installation

Your gas unit needs to be connected to the gas line. You would also have to install a ventilation system if you don’t have one so that the combustion gases can safely get vented out of the house.

How Much Does It Cost to Run a 40 Gallon Gas Water Heater?

If you have a gas water heater with a tank, an EF rating of 0.67, and you tend to use about 40 gallons of hot water per day, then the unit is going to cost you approximately $240 to run annually.

What Is More Efficient Gas or Electric Hot Water Heater?

Electric water heaters are more efficient than gas units.

In an electric model, the heating rods are located in the water in a sealed tank – there is practically no loss of heat. A gas unit, in its turn, loses a lot of heat through the ventilation system. 

Is a Gas Water Heater Cheaper to Run Than Electric?

Gas water heaters are generally cheaper to run simply because natural gas costs less than electricity in the majority of states.

What Is the Cheapest Way to Heat Your Water?

Even though natural gas is cheap, electric water heaters are usually not as expensive as the appliances that need gas to operate.

Moreover, electric models are more energy-efficient, don’t require as much maintenance, and, in a lot of cases, last longer than gas water heaters.

Read: The Best Temperature For The Water Heater And Why?

Water Heater Installation and Replacement Cost

FactorsElectric Water HeaterGas Water Heater
Unit cost$300 – $1.100$400 – $1.800
Total cost with installationUp to $2.100Up to $2.800
Annual operating cost$440 – $580$225 – $350
Add-onsInstallation of electrical wiring – up to $3.75 per square foot.Installation of a new electrical circuit – $150-$200Installation of a gas line – $350-$750 (to run one from an existing connection), $500-$2.000 (to run a new line from the gas meter).Addition of an exhaust vent – $100-$600.

Are Tankless Water Heaters Cheaper?

Tankless water heaters tend to cost more than gas and electric units with a tank.

However, tankless models usually have a longer lifespan. Moreover, these units might save you money in the long run as the water is heated ‘on-demand’ and no energy gets wasted to keep the water in the tank hot.

Switching from Gas to Electric Water Heater

To switch from gas to electric, you would have to buy a new unit and reconfigure the electrical system.

In general, it will cost between $200 and $500 (without the unit’s cost) to convert to an electric water heater as you would have to install a new dedicated circuit and additional wiring. 

However, do bear in mind that you might have to upgrade your whole electrical panel, and that can cost up to $2.500.

Does Instant Water Heater Consume More Electricity?

Instant water heaters or tankless units require a lot of electricity when running. When these appliances are on, they might need up to 30 kW to be able to heat the water in a matter of seconds.

With that being said, tankless water heaters are still more energy-efficient than units with a tank.

These water heaters use electricity only when you are using the hot water (unlike the units with a tank that use energy to keep the water hot even when you don’t need it).

Instant water heaters can actually reduce your energy bills. Moreover, such units have a longer lifespan, so investing in such an appliance might be a smart financial decision. 

How Long Does a Water Heater Run Per Day?

On average, water heaters run from 3 to 5 hours per day. Of course, the exact time would depend on the number of people living in the household, the number of appliances that require hot water, the unit’s temperature setting, its efficiency, and so on.

The total operation time of a tankless unit would be a lot less – around 1-2 hours per day, while standby water heaters might end up running for more than 5 hours.

Does Turning Off Water Heater at Night Save Money?

You will not see any significant savings if you decide to turn your water heater off at night. 

In fact, you might even create more problems as there will be no hot water when you wake up (if you have a heater with a tank) and you’ll be putting unnecessary pressure on the unit every time you turn it on and off.