Choosing between a gas and electric water heater isn’t just about installation cost — it’s about long-term operating expenses.
Water heating accounts for roughly 15–20% of total household energy use in the U.S., making it one of the largest utility expenses after heating and cooling.
So which option is cheaper to run: gas or electric?
Let’s compare the real numbers.
Quick Answer: Which Is Cheaper?
In most U.S. states, gas water heaters cost less to operate than traditional electric models.
Average monthly operating cost:
Gas water heater: $20–$35 per month
Electric water heater: $35–$60 per month
However, the gap depends heavily on local energy rates.
How Water Heater Costs Are Calculated
Water heater operating cost depends on:
- Energy source (gas or electricity)
- Energy rate (therm or kWh cost)
- Household hot water usage
- Heater efficiency rating
Electric models typically use 4,000–5,500 watts when heating.
Gas units use therms, often costing less per unit of heat.
Gas Water Heater Costs
Average monthly gas usage for water heating:
15–30 therms
If natural gas costs $1.20 per therm:
20 therms × $1.20 = $24 per month
Gas heaters often heat water faster and cost less per BTU.
(👉 Average Natural Gas Bill Per Month in the U.S.)
Electric Water Heater Costs
Electric heaters use roughly:
300–500 kWh per month
At $0.16 per kWh:
400 kWh × $0.16 = $64 per month
Electric rates vary significantly by state.
(👉 Average Electricity Cost per kWh by State)
Efficiency Comparison
Electric water heaters are nearly 100% efficient at converting electricity to heat.
Gas water heaters lose some energy through venting.
However, because gas energy costs less per unit, it often remains cheaper overall.
Heat pump water heaters are a different category and significantly more efficient.
Installation & Upfront Costs
Electric water heaters:
- Lower installation cost
- Simpler setup
- No gas line required
Gas water heaters:
- Higher installation cost
- Require ventilation
- May need gas line access
Operating costs often offset higher installation expenses over time.
Which Option Is Better Long-Term?
Gas may be better if:
- You already have a gas connection
- Natural gas rates are low
- Household hot water usage is high
Electric may be better if:
- You don’t have gas access
- Electricity rates are competitive
- You install a heat pump model
Frequently Asked Questions
Is gas always cheaper than electric?
Not always. It depends on local energy rates.
How much does it cost to heat water per month?
Typically between $20 and $60 per month, depending on energy source.
Are electric water heaters more efficient?
Yes in terms of energy conversion, but gas may still cost less overall.
What uses more energy: gas or electric?
Electric water heaters often consume more energy in kWh terms, but gas may consume more total BTUs.
Final Thoughts
Gas water heaters typically cost less to operate than electric models in most U.S. regions. However, the true cost depends on your local energy rates and household usage.
Understanding both electricity and natural gas pricing in your state is essential before making a decision.
For a complete breakdown of utility expenses, explore our full utility cost guide.
