Electric vs. Gas
water heaters
Across the United States as a whole, around:
60% of homes have gas water heaters
40% of homes have electric water heaters
The numbers are shifting ever more towards electric heaters, as they are increasingly efficient and consumers are ever more financially savvy and environmentally-conscious.
Gas heaters use energy from burning natural gas to heat water, whereas an electric heater uses a coiled electrical element. The cost of running each type depends on the cost of natural gas and electricity in your area. A key factor is also the recovery rate, which determines how quickly a tank can refill with hot water. For a full break down of the the costs, check out the average cost of a water heater page.
An increasingly popular type of heater is a tankless heater (for more information, see our guide on What is a Tankless Water Heater), which heats water as and when you need it. These tend to be electric, although there are some gas options available.
This guide will discuss the different aspects of gas and electric water heaters to help you decide which one is best for you. We’ll walk through the different costs (upfront and ongoing), performance concerns, and how you can choose the best heater for you based on your own home’s circumstances.
HOW DO THEY WORK?
Both types of water heater use a heating element to heat water and then a tank to store it – in the case of a point-of-use or tankless system, the water is heated by the element and then sent straight to the faucet or shower. However, there are a couple of key differences between the two.
ELECTRIC
On an electric heater, there is a separate thermostat, meaning that when the water reaches the desired temperature, the heating element switches off, before restarting when the water drops below the threshold.
GAS
On a gas model, this is built into the gas control valve; they also have a heat limiting device.
Gas water heaters require a flue to vent gas and circulate heat. A gas heater will also require a thermocouple, which is a device to shut off the gas in case of an emergency.
COST
DIFFERENCES
A general rule of thumb is that gas water heaters tend to be slightly more expensive than their equivalent electrical version. The most popular gas water heaters cost between $250 and $1,500.
By contrast, the most popular electric water heaters cost around $500. There are more expensive electric models available, such as electric heat pump systems, which can cost as much as $3,500.
A further cost to consider is that of installation. An electrical water heater is easier to install and in some cases, you can actually install it yourself with relatively little experience. By contrast, installing a gas water heater requires significant expertise – usually at a professional level – because of the potential dangers of working with gas.
To install a gas water heater, it will cost between $1,000 and $3,000 whereas an electric water heater will cost $620 to $1,020 if you hire a professional to do it. This is often the unseen cost of a water heater since very few people calculate it as part of the purchase price.
For more information, see our guides on The Average Cost of an Electric Water Heater and The Average Cost of a Gas Water Heater.
PERFORMANCE
When it comes to judging the performance of gas and electric water heaters, there are two key metrics to think about.
The first of these is the recovery rate – the speed at which the water tank can reheat itself after usage.
The second is the first-hour rating – the amount of hot water a tank can deliver within the first hour.
Effectively, these two figures tell you how much hot water you can get when you need it, and how soon afterward it can do it again.
RECOVERY RATE
When it comes to recovery rate, a gas heater is much faster than an electric heater.
A gas heater can heat a 50-gallon tank in about an hour. For an electric heater working with the same-sized tank, you can expect a recovery rate of a couple to several hours.
FIRST HOUR RATING
The first hour rating refers to how much water a tank can produce within the first hour of usage. As shown above, this is a critical statistic because it takes at least an hour for a tank to fully reheat. In general, the larger the tank, the higher the first hour rating.
Because of the different levels of efficiency (see the Efficiency section below for more information), an electrical heater will be more efficient in reaching the first hour rating.
POWER OUTAGE
In the event of a power outage, a gas heater will continue to work, whereas an electric heater will not. It is far more common to have a power outage (particularly in poor weather, when you need hot water) than it is to lose the gas connection.
Reliability is a key feature of performance, and a gas heater is less likely to cut out, making it more reliable.
EFFICIENCY
By definition, a tank water heater system is inefficient – the idea of heating up water constantly means that you are wasting energy. This is why a tankless water heater is the most efficient style of water heater. However, storage tanks are becoming more and more efficient, with better insulation meaning that less energy is required to keep water warm.
There is a big difference between energy efficiency when it comes to gas and electric heating.
GAS
A gas heating unit will run at around 60% efficiency, meaning every unit of energy you pay for wastes 40% of its energy.
For a conventional gas storage element, the 13-year cost is $5,394.
ELECTRIC
By contrast, an electric heater runs at about 90% efficiency. The difference in the 13-year cost of running these devices can be huge.
For an electric heat pump storage element, you will pay $4,125.
The roughly $1,200 difference equates to a $100 difference per month.
LIFESPAN
The warranty and lifespan of a water heater is also a crucial piece of information on the overall price. Electrical heaters tend to last longer than gas heaters.
Gas heaters tend to last around ten years before they require replacement.
Electric heaters last somewhere around 12 years.
By contrast, a tankless water heater can go closer to 20 years before it needs to be replaced. Again, all of these need to be factored in when calculating the price.
WARRANTY
Warranties on electric water heaters tend to be longer than gas heaters. A warranty effectively guarantees the minimum lifespan of a water heater. Use this in your calculations when determining which will be cheaper.
The lifespan varies significantly from model to model, so be sure to research the differences thoroughly before purchase (see our guides on the Best Tank Water Heater, the Best Electric Water Heater, and the Best Gas Water Heater for more information).
HOW TO CHOOSE BETWEEN THE
TWO
So, reviewing all of the differences, how can you decide which one is right for you and your home? There are three key issues that are dependent on your own specific circumstances.
What is already installed in your home?
If you don’t have gas installed in your home, then it is unlikely that you will want to have a whole system put in place just for heating water. If you don’t have gas power, then the decision is made – go with electric.
What is your budget?
Your budget will shape which type of water heater you use. As a general rule, the cheaper the upfront cost of a heater, the more expensive it will be to run in the long-term. Excluding installation, a gas water heater will cost between $50 and $100 more than an electric model. For tankless water heaters, an electric heater is about half the cost of a gas heater.
What is the cost of electricity vs. gas?
This final factor is absolutely crucial in determining the cost of running a water heater. You will need to research your local energy prices in advance of making a purchase. You can also do a quick calculation to work out which will be cheaper in the long run.
1
Work out the annual running costs of the different models
2
Multiply it by 10
(the number of years it will likely last)
3
Then add in the cost of the model
(to show which one will be cheaper over time)
This will give you an accurate representation of your long-term usage.
Ultimately, then the type of fuel you use to heat water depends very much on your family’s needs. A large family will most likely need the power from a gas heating system unless they have an extremely large-capacity tank.
If you are more environmentally-conscious, then the 98%+ efficiency rating of an electric heater will most likely be a key point – not to mention the financial efficiency that it brings. In a totally new build, you may think about a tankless option, further diminishing waste.
Whatever you choose, make sure you do your research; that way you can be confident that, while the decision was tricky, it was the right one for you.