Home Energy Savings | September 26, 2016

Which is More Energy Efficient? Gas vs. Electric Water Heaters

Water heater energy usage

Most of us turn on the faucet and don’t pay much attention to how the hot water arrives — until, of course, it doesn’t. We take the mighty hot water heater in our homes for granted.

But ignoring your hot water heater might mean passing up an opportunity to gain some hot water heater energy savings. Water heater energy usage makes up about 18 percent of the average utility bill, after all. You can find hot water heater energy savings a few different ways — taking shorter showers, for instance. But knowing how to choose a hot water heater that is energy efficient from the beginning is the best way to lower your energy costs from the first time that heater kicks on.

Other than actual equipment cost, you might not have thought too much about selecting a water heater. But, to get hot water heater energy savings, there are some factors to consider before you purchase. For example, calculating the best size water heater to fit your space and average usage, and conducting a water heater energy usage comparison between heater styles can make a big difference. Not to worry, though. We’ll explore the different types of hot water heaters — here, we’ll compare gas vs. electric water heaters; but check our other piece, which will examine tankless vs. traditional water heaters.

How to choose a hot water heater

First, some basics for selecting a water heater. A single-family tank water heater has a reservoir of hot water ranging from 20 to 80 gallons. When someone turns on the hot water faucet, the hot water is released from the top of the tank and piped to where it’s needed in the house. The hot water in the tank is replaced with cold water entering the bottom of the tank to ensure the tank is always full.

  1. Determine how much water your household needs.
    A family of four, for instance, might take several showers, run the dishwasher and wash a few loads of laundry — all in one day. While this might total 100 gallons of water use, that doesn’t mean the water heater needs a 100-gallon capacity. Be as accurate as possible with this estimate. After all, is there anything worse than taking a shower and running out of hot water? Well, that can happen if sizing a hot water heater has been done incorrectly for your household.
  2. Calculate your desired FHR.
    Consumer Reports advises that when sizing a hot water heater, you keep in mind the first-hour rating (FHR) for a tank water heater when doing a water heater energy usage comparison. This information indicates how much hot water can be delivered in the first hour. Then, depending on the specific model, you can look at the time the heater requires to return to its full FHR. Energy.gov offers a formula to help with sizing a water heater for your needs.
  3. Pay attention to comparisons between energy efficient water heaters.
    Consumer Reports says that new federal efficiency standards mean that today’s water heaters have improved hot water heater energy savings, overall. Heaters with fewer than 55 gallons should see about a four percent efficiency boost, thanks to the standards, the consumer organization says; water heaters larger than 55 gallons, meanwhile, might cut a utility bill by 25-50 percent, depending on the technology of the heater.

Energy efficient water heaters

When doing a water heater energy usage comparison, Energy.gov recommends using the ubiquitous yellow Energy Guide label found on appliances to identify energy efficient water heaters. The FHR rating is in the top left corner on water heater labels and is noted as “capacity (first hour rating).” When doing a water heater energy usage comparison, Energy.gov recommends looking for models with FHRs that match within one or two gallons of your peak hour demand. The daily peak hour demand is the one-hour hot water need for your household.

Do you currently have an energy efficient water heater? That depends on its age. The older your hot water heater, the more likely you’re losing hot water energy heater savings. Consumer Reports suggests that if your water heater has a 12-year warranty and you’ve been using it for 15, it’s likely time to look for one of the more energy-efficient options to maximize hot water heater energy savings. The Department of Energy has changed the regulations on hot water heaters that make today’s models more likely to offer savings.


Another consideration when selecting a water heater is the type of energy it uses. While solar and tankless versions are increasingly energy efficient, water heaters that use natural gas or electricity are still the most common. Let’s take a look at gas vs. electric water heaters because they are so common.

Gas vs. electric hot water heaters

For the most part, the choice boils down to understanding gas vs. electric water heater operating costs. Michael Bluejay, aka “Mr. Electricity,” has spent his career analyzing energy use, including hot water heater energy savings and the differences between gas vs. electric water heaters.

In a gas vs. electric water heater operating cost analysis, he says, gas is almost always cheaper than electric. Bluejay says gas water heaters typically cost about $30 a month to run, while electric water heaters run closer to $42 a month, depending on utility rates, of course. This analysis of gas vs. electric water heater operating costs is based partially on the fact that natural gas is typically less expensive than electricity, and assumes that you already have access to natural gas in your home. Having to put in a natural gas line would add expense and mean that it would take much longer to realize any potential hot water heater energy savings.

That said, Bluejay notes the following where electric heaters come out ahead in comparison of electric vs. gas water heaters:

  1. Electric heaters are less expensive to purchase.
  2. Electric heaters are easier to install.
  3. Electric heaters are generally safer since they don’t have any fuel that could leak or explode and have no combustible byproducts.
  4. Electric tank heaters operate more efficiently than gas heaters because gas heaters lose heat through venting.


Lower your energy costs with a more energy efficient water heater

Now you should know how to choose a hot water heater if replacing your current model with a modern, more energy efficient water heater makes sense. Bottom line, if your utility bill is higher than you’d like, it’s worth taking a look at your hot water heater to see if it needs to be replaced. When it comes to lowering your energy bill, every little bit can help.

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