Compare Electric vs Gas Water Heater Costs

Summary: Electric vs Gas Water Heater Average Costs

Electric water heaters range in cost as little as $300 to as much as $1,500, not including installation costs. Gas water heaters average in cost from around $400 to as high as $2,000, not including labor fees. Installation typically costs about as much as the water heater.

Below are some example hot water heater installation prices by location:

Cost of an Electric Hot Water Heater

Electric water heater costs depend on the size of the unit, whether it has a storage tank, and the difficulty of installation. Though electric heaters typically have lower upfront costs than gas models, they cost more to operate in most places.

• An electric water heater with a storage tank has an average cost between $300 and $700, plus an additional $300 to $500 for installation.
• A tankless electric water heater has an average cost between $800 and $1,500, plus an additional $800 to $1,200 for installation.

Cost of a Gas Hot Water Heater

Gas water heater costs also depend on whether it has a storage tank, the unit's size, and the difficulty of the installation. While gas models cost more upfront, they generally offer lower operational costs in comparison to electric heaters.

• A gas water heater with a tank has an average cost between $400 and $1,000 for the unit and between $500 and $700 for installation.
• A tankless gas water heater has an average cost between $800 and $2,000 for the unit and between $1,000 and $1,500 for installation.

If your current gas line needs to be extended or you do not have a gas line, expect to pay more for the cost of that labor. Prices vary depending on the difficult of extension or installation.

Energy Efficiency

You want a water heater that offers the best possible energy efficiency for your budget and needs. The easiest way to do this is to use the yellow Energy Guide label found on most appliances. In the top left corner your will find the capacity first hour rating (FHR). The goal is to find a unit with an FHR that matches within one or two gallons of your peak hour demand. You may also use this calculator to figure out the energy cost of current or potential water heaters.

Pros and Cons of a Gas Water Heater

A gas water heater runs on natural gas or propane and requires a gas line running to the home. Gas units offer lower operational costs, but can be expensive to install if you do not have a gas line.

Gas Water Heater Pros

• Energy savings: Gas water heaters are usually more energy efficient, with long-term operational costs off-setting the upfront cost of the unit.
• Faster heating: Ideal for large families, gas water heaters heat more water per hour in comparison to electric. On average, a 50-gallon tank can be heated in a single hour, whereas electric models would take two or three.
• Operation: Since gas models don't need electricity, they work even in the event of a power outage.

Gas Water Heater Cons

• Heat loss: The water in a gas unit is heated at all times, which leads to more heat loss through the walls of the storage tank (if you have a storage tank).
• Leaks: If the water heater is not properly maintained, you risk a gas leak, which could lead to an explosion or poisoning.
• Upfront cost: While gas is cheaper to operate, the water heaters themselves typically cost more.

Pros and Cons of an Electric Water Heater

Electric water heaters run off electricity and are a great option if you do not have a gas line or do not want to pay the high cost of installing one.

Electric Water Heater Pros

• Options: There are many electric water heaters available with multiple tank sizes.
• Periodic use: Electric models only heat the water when you need to heat it, instead of constantly heating.
• Space: Since electric heaters do not need a release exhaust, the require less space than gas models.

Electric Water Heater Cons

• Long-term cost: Though electric water heaters offer lower upfront costs, the long-term cost of maintaining and using the heater is far higher compared to gas.
• Recovery rate: Electric water heaters only heat water as needed, so the recovery rate is lower than that of gas. Homes with large families may have to wait longer for the water to heat up.

Additional Cost Savings

Around 18 percent of your home's energy use comes from water heating, which often means higher costs. Luckily, there are always additional steps you can take to help reduce water usage and save on expenses over the life of your water heater.

• Fix leaks: Acting on leaks as soon as you notice them is incredibly important. Even a slow leak of 12 drips per minute wastes almost two gallons of water a day. This drip calculator from the American Water Works Association (AWWA) shows you just how much damage leaks can do.
• Heat traps: Installing heat traps on your tank can save you between $15 and $30 on your water heating bill. Some newer tanks include heat traps, but you may have to have them professionally installed.
• Low-flow fixtures: Putting in low-flow fixtures is a great way to cut down on costs and water usage, with water savings coming in at 25 to 60 percent.

References:

• Water Heater Buyer’s Guide: Gas vs. Electric Water Heater
• Choosing a New Appliance: Electric vs. Gas Water Heaters
• Gas vs Electric Water Heater

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