Electric vs Gas Water Heater

Which type of fuel is best when it comes to powering a water heater: electric, natural gas, or propane?

Each fuel format supports both storage tank and tankless water heating systems, and each has their own pros and cons. Often, the real answer lies with understanding some specific details about your water usage habits, local energy prices, and the future of fossil fuels.

Let’s take a look at the pros and cons of electric vs gas water heaters.

Base price

One of the most obvious points of comparison between the newest gas water immersion heaters and electric systems is their retail price.

Electric water heaters

All things being equal, electric water heaters are almost always cheaper than gas systems. Across more traditional storage tank models and newer electric heaters, electric models tend to have simpler designs and fewer internal components, which helps keep the base price down.

Gas water heaters

Unlike electric heat, combusting gas results in byproducts that are unsafe when left to collect in the air around a heater. Because of this gas heaters need venting systems to transport leftover gasses outside of the home. This, plus some slightly more complex hardware, means that gas water heaters can retail for between one-third and a half more than equivalent electric units.

Winner: Electric water heaters

Running costs

When comparing how much electric and gas heaters cost to run, it’s important to take a wide look, bearing in mind the potential prices of installation, maintenance, and utility bills.

Electric water heaters

Because they don’t need venting and are usually much smaller than gas heaters, electric systems are easier to install, and are much more suited to DIY fitting. While a certified professional is always recommended to avoid potential installation mistakes and prevent voiding any warranty conditions, setting up your own heater can help save a considerable amount of money.

Electric heaters also have higher average expected lifespans in comparison to gas heaters, thanks to slightly higher reliability. Many technicians claim that, when they do go wrong, electric tankless heaters are easier to diagnose and fix.

Where electric heaters fall down on running costs is month-to-month energy bills. The majority of regions across North America enjoy lower gas than electricity prices, so there can be a monthly premium on electric systems.

Gas water heaters

Gas water heaters should always be installed by a certified professional, who can make sure that gas pipes are correctly connected and vents are operating as an efficient exhaust system. Additionally, most gas heaters need an annual service/tune-up—something that doesn’t necessarily need to happen with electric systems.

Add these service costs to the higher risk of breakdown and repair that comes with a gas heater, and you get a sizable bill over electric options. However, gas heater owners can recoup much of those costs with their lower monthly bills, which are less than half that of electricity in some areas.

Winner: Tie

Heating power & capacity

If you take the time to work out your home’s hot water needs and choose an appropriately-sized heater, then both gas and electric systems should be able to provide enough heating power in the vast majority of situations.

Electric water heaters

At low to mid-range capacities, both storage tank and tankless electric heating systems can produce an equivalent volume of hot water to gas heaters. Electric tank systems are available with equivalent tank sizes to gas, and tankless heaters should be installed with large circuit breaks that allow them to deploy large amounts of energy to quickly heat up water.

Gas water heaters

When used in large homes with very high hot water demands—or in cold climates where the temperature of incoming water is low—gas heaters beat electric units. Because gas systems can generate more heating power, they’re able to heat a large volume of water, or deploy more energy to bring near-freezing water up to temperature.

Winner: Gas water heaters (tied for most homes)

Energy efficiency

When it comes to the efficiency of a heater, the real comparison is not between electric and gas, but between traditional tanks and new tankless systems. No tank heater can compete with a tankless unit when it comes to efficiently deploying energy.

Electric water heaters

The newest electric tankless water heaters are among the most energy-efficient appliances inside our homes, with energy factors of over 99% in the best products. This means that practically all of the energy drawn by the heater is successfully transferred to the heating element and surrounding water.

Tanked electric systems are similarly efficient when it comes to deploying power, but they waste far more energy by creating hot water that’s not used. Because tank systems don’t work on demand, they often spend time heating unneeded water.

Gas water heaters

Gas tank water heaters are usually considered the least energy-efficient of all water heating systems. Not only do they waste energy by sometimes heating unneeded water, but they also lose heat through their venting systems.

This is something that tankless heaters also struggle with, meaning that the average tankless gas heater is about 10% less efficient than an equivalent electric model. While that’s not quite enough to offset high electricity prices for most people, it does reduce the difference in running costs somewhat.

If you’re looking to boost the efficiency of a gas heater, look for devices that contain condensing technology. Condensing heaters are able to capture heat lost through the exhaust system and redeploy it using a secondary heat exchanger.

This extra heat is usually used to preheat water before it reaches the primary heating element. As a result, the difference between incoming and outgoing water temperature is lowered, and overall efficiency can be increased above 90% in tankless models.

Winner: Electric water heaters (and condensing gas tankless systems)


Electric heaters are usually cheaper to purchase, install, and maintain than gas heaters. But the lower price of gas means that natural gas and propane heaters tend to be cheaper to run on a monthly basis.

Gas heaters can also generate more power for homes with lots of bathrooms or in cold climates. However, they can’t match the efficiency of the best electric systems.

As a result, if you focus on heating capabilities and short-term costs, a gas heater wins in most situations. Look at factors such as environmentally friendliness, future-proofing, and long-term costs, on the other hand, and electric heaters emerge as the clear winner.

Diego Martinez

Diego Martinez, with a Bachelor’s in Mechanical Engineering from MIT, has been a leading figure in maintenance and facilities management for 16 years. He joined our editorial team in 2020, sharing his expertise in preventative maintenance, system optimization, and energy efficiency. Diego’s previous roles include engineering manager in manufacturing and consulting for facility management. He has provided practical advice and problem-solving strategies for maintenance issues. He is an enthusiastic cyclist and volunteers in community tech education programs.

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