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Compare Electric vs Gas Water Heater Costs

About Electric Water Heaters

Electric water heaters rely on electricity to heat the water in your home. If you don’t have a gas line running to your home or other gas appliances, an electric water heater is your only option, unless you’re willing to pay the high cost of having a gas line installed.

Electric water heaters are available in tank or tankless models. Conventional storage tank models are less expensive, but they take up a lot of space in the home. Tankless electric water heaters are compact and energy efficient, but plan on spending significantly more upfront.

Tankless electric water heaters are best suited for warmer climates. In cold climates, a tankless electric model might not be sufficient to heat water to the right temperature for showering, washing dishes and washing clothes. Storage tank electric models can be used in any type of climate.

How Much Does an Electric Water Heater Cost?

Electric water heaters with a storage tank cost $300 to $700, plus another $300 to $500 for installation. Tankless electric water heaters are more expensive, running about $800 to $1,500 for the water heater and another $800 to $1,200 for installation.

Electric water heaters are less expensive upfront than gas water heaters, but they cost more to operate in most areas of the country because electricity tends to be more expensive than natural gas or propane. In many cases, the cost to operate an electric water heater is two or three times that of a gas water heater.

Installing an Electric Water Heater

Installing any kind of water heater can be complex. If you’re not sure how to do it, hire a professional. If you are going to tackle the job yourself, follow the manufacturer’s installation instructions. Make sure the electricity is off before you start.

Keep in mind that tankless models are more difficult to install than storage tank versions, particularly when switching from a tank model to tankless.

Electric Water Heater Pros

  • Less expensive - Electric water heaters are less expensive than gas heaters of the same size.
  • Easier to install - Electric water heaters are simpler install than gas water heaters (but again, the process is not easy if you don’t know what you’re doing). Electric water heaters can be installed in tight spaces because they don’t require ventilation.
  • Safer - With gas heaters, there’s always the risk of a gas leak or explosion. It happens very rarely, but it’s not a concern at all with electric models.
  • Longer life expectancy - Electric water heaters have fewer parts, so they tend to last longer than gas heaters.
Water Heater Installation Cost

Electric Water Heater Cons

  • Higher energy costs - In almost every region of the country, it is cheaper to heat your home’s water with natural gas or propane.
  • Slow to heat - Electric water heaters take significantly longer to heat the water in your tank. Most gas models can heat an entire tank full of water to 90 degrees in an hour’s time. Electric models can only heat about 25 gallons per hour to 90 degrees.

About Gas Water Heaters

Gas water heaters use natural gas or propane to heat the water in your home. In order to install a gas water heater, you’ll need a gas line running to your home. Most people who have a gas line choose to install a gas water heater because it costs less to operate. But if you don’t have a gas line, installing a gas water heater will be a pricey endeavor.

As with electric water heaters, you can opt for a conventional storage tank gas water heater or a tankless model.

How Much Does a Gas Water Heater Cost?

Gas water heaters are more expensive upfront than electric water heaters. Gas storage tank models usually cost anywhere from $400 to $1,000, plus another $500 to $700 for installation. Gas tankless models cost $800 to $2,000, plus another $1,000 to $1,500 for installation. If you don’t have a gas line or your current gas line needs to be extended to the water heater, tack on thousands to the total price.

Replacing a gas-powered storage tank water heater with a tankless model saves the average family $70 to $120 per year in energy costs. However, due to the much higher cost of the water heater and installation, it could take 20 years to recoup your investment. In some cases, the water heater won’t last 20 years.

Installing a Gas Water Heater

The primary difference between installing a gas water heater and an electric water heater is that gas models require venting to direct harmful gases out of the home. Improper venting can lead to serious injuries or death, so the project should only be tackled by those with experience. Most manufacturers strongly recommend hiring a professional.

If you’re going to install the water heater yourself, check with the local building department first. Some cities and towns place restrictions on where in the home a gas water heater can be installed. When you’re finished with the job, always ask the building department to inspect your work for safety.

Gas Water Heater Pros

  • Heats faster - Often, gas water heaters are about twice as fast as electric water heaters. You’ll be far less likely to run out of hot water.
  • Lower energy bills - Electric water heaters are actually more efficient, but because electricity is more expensive than natural gas in most areas, gas water heaters are less expensive to operate.
  • May work during power outage - If your gas water heater is ignited with a pilot light, rather than an electric ignition, you will have hot water even if you lose power.

Gas Water Heater Cons

  • More expensive - Gas water heaters not only cost more upfront, but they’re also more expensive to install and maintain.
  • Difficult to install - Again, gas water heaters require a ventilation system. If you’re installing a gas water heater for the first time, you’ll need to install PVC pipes that vent up through the roof. If you’re replacing a gas water heater, these lines often require maintenance or repairs.

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