Gas wins
$3,850 cheaper
Gas
$5,391
Electric
$9,241
Break-even
Year 2
Gas wins
Saves $3,850 over 12 years · breaks even in year 2
$5,391
$9,241
Cumulative cost over time — crossover at year 2
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Result
Gas runs ~$341/year vs electric ~$695/year. The $400 higher gas install is recovered in ~1.1 years, then gas pulls ahead by ~$355 every year after.
Inputs
Result
At $0.10/kWh electric runs ~$434/year, so the yearly gap shrinks to ~$94. Gas still wins, but break-even stretches to ~4.3 years — a much closer race.
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Result
When gas hits $3/therm, gas running cost jumps to ~$682/year — above electric’s ~$434. Electric is now cheaper both up front and yearly, so it dominates outright.
For a typical 64-gallon-per-day household in 2026, a gas water heater costs about $1,300 installed and ~$340/year to run, while a standard electric resistance unit costs about $900 installed but ~$695/year to run. Gas costs $400 more up front but saves roughly $355/year, breaking even in about 1–2 years and saving ~$3,850 over a 12-year lifespan. Electric only wins where electricity is cheap (under ~$0.11/kWh) or natural gas is expensive (over ~$2.50/therm).
In most of the US in 2026, a gas water heater is cheaper to own despite a higher install cost, because natural gas energy costs 40–60% less than electricity per unit of heat delivered. A typical household spends ~$340/year running a gas tank vs ~$695/year for a standard electric resistance tank. Gas costs about $400 more to install but recovers that gap in 1–2 years. The exception: regions with cheap hydro electricity (under $0.11/kWh) or expensive natural gas (over $2.50/therm), where electric can win — and heat pump water heaters beat both on running cost.
| Fuel | Installed | Running / year | 12-Year Total |
|---|---|---|---|
| Gas (natural) | $1,300 | ~$340 | ~$5,400 |
| Electric resistance | $900 | ~$695 | ~$9,240 |
| Heat pump (HPWH) | $3,500 | ~$150 | ~$5,300 |
Annual running cost depends on hot-water use, energy rates, and efficiency. For a 64-gallon-per-day household heating water by 70°F, a gas tank (60% efficiency) burns ~227 therms/year — about $340 at $1.50/therm. A standard electric tank (92% efficiency) draws ~4,345 kWh/year — about $695 at $0.16/kWh. Electric is more efficient at the tank but electricity costs far more per delivered BTU, so gas wins on running cost in most markets. The calculator above lets you plug in your exact usage and local rates.
Break-even is the year when the cheaper-to-run option overtakes the cheaper-to-buy option on cumulative cost. Gas costs more up front but less per year, so its cumulative line starts higher and then crosses below electric. With typical numbers ($400 higher gas install, $355/year gas savings) the crossover lands at about year 1.1 — so gas is ahead from year 2 onward. Where electricity is cheap, the yearly savings shrink and break-even can stretch to 4–6 years; if it lands beyond the unit’s lifespan, the cheaper-to-install option wins overall.
Switching from gas to standard electric resistance rarely pays off on running cost — you would trade ~$340/year for ~$695/year. The switch only makes sense for a heat pump water heater (HPWH), which uses 60–70% less electricity than resistance and can run cheaper than gas (~$150–$200/year) while removing combustion from the home. HPWH install runs $3,000–$5,500, with HEEHRA rebates up to $1,750 for income-qualified households in 2026. Switching also adds a 240V circuit cost ($500–$1,200) if none exists.
Yes — the more hot water you use, the bigger the gas advantage, because running cost scales with usage while install cost is fixed. A low-use 1–2 person home (40 gal/day) sees a smaller yearly gap, so a cheap electric install can stay ahead longer. A high-use 4–5 person home (80+ gal/day) burns through the install gap in well under a year and saves $5,000+ over the heater’s life by choosing gas. Right-sizing the tank matters too: an oversized tank wastes 8–15% on standby heat loss regardless of fuel.
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Last Updated: Jun 16, 2026
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