• Category:
    Home Energy Savings
  • Published:
    September 26, 2016
  • Updated:
    August 28, 2020

Gas vs. Electric Water Heaters: Which Is More Energy-Efficient?

Other than equipment costs, 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, what size water heater do you need? What types of hot-water heaters are there? And how should water heater energy use be factored into your decision-making?

Here, we’ll cover everything you need to know about gas vs. electric water heater cost, sizing and efficiency.

Understanding 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 tend to take the 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% of the average utility bill, after all. You can find hot-water heater energy savings a few different ways. But knowing how to choose a hot-water heater that’s energy-efficient from the beginning is the best way to lower your energy costs from the first time that heater kicks on.

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 the type of fuel source in your home.

The fuel source that powers your home can help you decide which type of hot-water heater to get. Although some homes are fitted for natural gas, 1 in 4 U.S. homes is all electric. Additionally, those living in rural areas may have difficulty accessing natural gas. If your home is limited to just electricity, the choice between an electric vs. gas water heater has been made for you unless you’re willing and able to put in a gas line.

How to tell if your water heater is gas or electric

how can I tell if my water heater is gas or electric

To tell if your water heater is gas or electric, start by removing your water heater’s access panel. If you see a pilot light, or blue flame, behind the access panel, you have a gas water heater. Another difference between gas and electric water heaters is that a gas water heater will have pipes connected to it, whereas an electric heater will have a supply cord.

2. Decide what size water heater you need.

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. Saving water in the bathroom is helpful — water conservation is always important — but no one wants to be taking a shower when it runs out of hot water. That can happen if sizing a hot-water heater has been done incorrectly for your household.

3. Calculate your desired first-hour rating (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. For example, if your shower energy consumption is high, you might decide to opt for a unit with a higher FHR. Energy.gov provides a formula to help with sizing a water heater for your needs.

4. 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 4% 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%, depending on the technology of the heater.

Energy-efficient water heaters

When doing a water heater energy usage comparison, Energy.gov recommends using the 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 1 or 2 gallons of your peak hour demand. The peak hour demand is how much hot water your household needs during the hour it uses hot water the most on a daily basis.

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 heater energy 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. Additionally, there are many other energy-efficient appliances that can help you cut down on energy usage.

energy efficient water heater

Another consideration when selecting a water heater is the type of energy it uses. While solar and tankless versions can improve home sustainability, water heaters that use natural gas or electricity are still the most common. But are electric water heaters efficient? What about gas units? Let’s take a look at gas vs. electric water heaters to find out.

Gas vs. electric hot-water heater cost and efficiency

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 and understanding energy use, including hot-water heater energy savings and the differences between gas vs. electric water heaters.

The difference between gas and electric water heaters

Before selecting a water heater, it’s important to know the differences between gas and electric water heaters. For example, take operating costs. After analyzing gas vs. electric water heater operating costs, Bluejay says that gas is almost always cheaper than electric, assuming that you already have natural gas piped into your home.

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. But there’s a catch if your home doesn’t already have natural gas. Having to put in a gas line would add expense, and that means it would take much longer to realize any potential hot-water heater energy savings.

To find out what water heater energy use is costing you now, Energy.gov provides a water heater energy cost calculator for both gas and electric units.

Switching from a gas to an electric water heater

According to Bluejay, switching from a gas to an electric water heater could be your best option. He asserts many ways that electric models come out ahead when comparing electric vs. gas water heaters:

  1. Electric water heaters are less expensive to purchase. Although it ultimately depends on the size, quality and efficiency of your unit, electric water heaters generally have lower upfront costs than gas heaters.
  2. Electric water heaters are easier to install. Installing a gas water heater involves working with gas lines, which can be both dangerous and expensive.
  3. Electric water heaters are generally safer. Electric water heaters are not only efficient but also don’t have any fuel that could leak or explode. And they have no combustible byproducts.
  4. Electric water heaters require less space. Unlike electric heaters, gas water heaters can be dangerous to operate in small spaces that allow gas to build up.
  5. Electric tank heaters operate more efficiently than gas heaters. Gas heaters lose some of the heat they produce through venting, making them less efficient.


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. 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. And be sure to read our post that examines tankless vs. traditional water heaters and their energy-saving benefits. After all, when it comes to lowering your energy bill, every little bit can help.

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Comments ( 32 )

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Russ McPherson - 9/16/2021

I installed a timer on our elec. water heater when we bought this home. It is set for an hour before we need showers for 2 hours and 2 hous before we start to prepare dinner. This fits our daily schedule.

Shivam Miglani - 12/1/2020

It’s a helpful blog.

Sara - 9/24/2020

Gas heater compared to electric heaters are quite inefficient due to loss of heat from exhaust gasses as well as walls of the storage tank. Whereas, electric heaters are far more energy efficient, but the savings in actual energy consumption are mitigated by the higher costs of electricity as opposed to gas. However it would be best to consult with a residential plumber before you install or switch your water heater. Modern gas heaters quipped with top of the line condensing units are highly efficient, thereby I would recommend to go for a gas heater. It would be best to consult with a residential plumber before you install or switch your water heater.

Syed sayeeduddin - 9/13/2020

Thanks for detail information

Sam - 9/10/2020

Very helpful

Ray Paulk - 9/10/2020

I’m an Engineer and also a licensed Electrician. I “have” to test everything which flowed into my home hot water heating system!

Years ago I installed a 40-gal electric HW heater in my home of 3 women and 2 men. I set up a separate watt-hour meter to monitor just the HW heater so I could tell the actual cost to supply HW to my home. Initially, with the factory settings (top and bottom at 160 deg), my average monthly cost for HW was about $60/month. I then adjusted the top thermostat to a temp we wanted at the faucets (130 deg), and the bottom lower to a temp where the top element could bump up the temp to 130 when it left the tank. I think the bottom element was about 115 degrees. This cut my cost to about $35 per month. Unfortunately 2 top element controls failed. Guess they didn’t like to cycle that much.

I then installed electronic PID temp controls on both the top and bottom elements using an in-the-flow thermocouple for the top controller, and a side-of-tank contact sensor for the bottom controller. Both controllers used solid state relays to switch the power to the elements (4,500 matts each). This cut the cost to about $10 per month! Unfortunately, I had about $1,000 worth of controls to get the savings. I did try phase-angle fired relays to switch the power. This brought my cost to $0, this was kinda ficticious as the savings were due to the relays switching off before the peak voltage which is where the watt-hour meters pick up their readings.

In my current home, my hot water was heated with an immersion tankless heater. But I kenp running out of HW, so I had a 40-gal storage tank added. This allowed me to get a hot shower after the 3-women, but no real oil savings.

I then replaced the storage tank with a hybrid, heat-pump electric HW heater. I still rum the water thru the boiler to preheat during the winter months. This allows me to shut down the boiler during the summer months. Testing after that showed both a reduction in my oil consumption and my electric cost went down. It apparantly cost more to run the boiler than to heat the how water with the heat pump.

I now have solar panels that provide 100% of my electricity needs for 7 months out of the year. This makes having an electric HW heater a no-brainer.

I also find electric HW heaters last a lot longer than gas or oil…. no flame to degrade the tank. An electric HW heater should last at least 20 years and can go 30-35 years. The gas or oil tend to have a life of about 12 years.

William Corn - 9/10/2020

I have two houses, one with electric and the other with gas. Both are 40 gallon units. I’ve always been a fan of the gas units, because back when I grew up, they were notorious for never running out of hot water. However, I have learned differently with the later model units. And…The location in the house can also be an issue. One of my homes, the one I grew up in, was originally built with a gas water heater. About 25 years ago a remodel, involving a room addition required the conversion to electric, because there was no feasible route for the vent stack. I was very disappointed at the time, because my experience prior to that was that electrics just couldn’t keep up with demand. To my surprise, that one and the one that replaced it about 6 years ago were just as capable of keeping up with demand as a gas unit.

Michele L - Wolcott - 9/10/2020

Thank you for this timely newsletter. We are looking to install a new water heater this month. I think we will be staying with electric. I like the info you provided on FHR. Never knew that! I learned a lot!

Adnan Pepic - 3/29/2020

Thank you for this information. I am in the process of deciding if I should switch from an electric water heater to a gas water heater and this information was helpfu.

Jhon Martin - 3/1/2020

Nice blog. It will surely help beginners update their knowledge. The efforts you have put in to create the posts are quite interesting. Looking forward to seeing you soon in a new post.

However, you may feel that they are at a loss when confronted with a wide variety of oil filled heater available these days.

Michael Benedict - 1/26/2020

Thanks for this amazing article. There are a few things one should keep in mind while buying water heaters in India.

We should consider factors like capacity, tank material, geyser size, warranty, price, etc.

Essentially, a smart choice is to buy a geyser with a thermostat.


Constellation - 6/5/2019

You’re welcome! We’re glad you liked it. Feel free to share it with friends and family so that they can save energy too!

Elijah Barkman - 2/27/2019

Nice Blog!! The content you have shared is very elaborative and informative. Thanks a lot for sharing such a great piece of knowledge with us.

    Constellation Community Team - 3/8/2019

    Hi Elijah, we’re happy to help!

John - 12/17/2018

“Electric heaters are less expensive to purchase.”
Wrong. Within the same brand and same capacity, there are the same, give or take a few dollars.

    Constellation Community Team - 1/23/2019

    Hi John, through our research, we’ve found that water heaters with the same water capacity differ in price from electricity to natural gas. We appreciate your feedback!

Albert - 10/16/2018

It’s a great benefit to read your post. The post was very good. Information like to be useful

    Constellation Community Team - 1/23/2019

    Hi Albert, that’s great to hear! Thanks for visiting.

alborz24service - 10/7/2018

Thanks , It was very good and comprehensive.

    Constellation Community Team - 11/7/2018

    Glad to be of help!

Jill - 9/5/2018

Thanks, this is helpful. But, what about noise as a factor? Just moved into a house with older gas powervent that I’m seeking to replace. It is vented outside my bedroom window, and practically SCREAMS when it is running (and no, doesn’t work during a power outage). I feel sorry for my neighbors. I am seriously considering replacing it with an electric unit because of the noise factor.

    Constellation Community Team - 11/6/2018

    Hi Jill, That’s a great element to factor in. We intended to primarily focus on the energy side of gas vs electric water heaters — but if the noise of your current gas water heater is affecting your quality of life, choosing an electric water heater might be best for you!

Phil - 9/2/2018

Why would you EVER need to heat HOT WATER? LOL!

    Constellation Community Team - 11/6/2018

    Ha ha! Fair point, Phil.

Stef Gibson - 6/29/2018

Nice blog post. Thanks for sharing useful information

    Constellation Community Team - 7/16/2018

    Hi Stef,
    We’re happy to help! Thank you.

Danielle - 5/17/2018

What about for a household like mine that has solar panels?!

    Constellation Community Team - 6/15/2018

    Hi Danielle,
    Solar panels only produce electricity, so if you do not have a natural gas hookup, electric water heaters will most likely be your best bet.

Alan - 5/8/2018

The part about gas heaters working without electricity is no longer valid with the newer power vented gas heaters.


    Constellation Community Team - 6/15/2018

    Hi Alan,
    that’s a great point! This fact may differ between energy users, since many households still use an older gas heater that does not have power-vented gas heaters.

Chuy - 12/4/2017

That side to side comparison of gas vs electric is really missing the CO2 emissions, given that you can power the electric one without adding to the green house effect. We should start taking that more in consideration, in my humble opinion, because it should not be about finding the cheapest way to do something, but about finding the more efficient way and then making that cheaper.

    Constellation Community Team - 2/28/2018

    Chuy, thank you for your input, we’ve taken it to heart! We will be sure to factor in CO2 emissions when researching our future appliance posts.

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