Which Is Better for Your Home: A Gas or Electric Water Heater?

Gemma Johnstone
Written by Gemma Johnstone
Updated February 1, 2022
Mother and son washing dishes together
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Gas and electric water heaters have key differences you'll want to consider before making a purchase

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If you’ve ever had to go without hot water in your home, you’ll know how important having a well-functioning water heater is. If it’s time to replace your existing water heater, you may wonder whether you should stick with the type you already have or go with something else. 

Gas and electric are the main types of water heaters available, and they have some key differences in terms of their operation, costs, and efficiency. Understanding more about their pros and cons will help you decide which type of water heater is better for your home.

What’s the Difference Between a Gas Water Heater and an Electric Water Heater?

Gas and electric water heaters both supply hot water to your home. The gas variety provides the heat by burning fuel provided through a gas line and the electric type generates the heat through electric resistance coils. Electric water heaters are usually a little smaller than their gas counterparts.

Electric vs. Gas Water Heaters: Which Is Better?

Gas and electric water heaters both have their own distinct advantages, but which is better will depend on the home they are being used in and what the user considers to be important.

Gas vs. Electric Water Heater Costs

On average, when purchasing a gas water heater, you’ll spend around $100 to $200 more than you would on a similar quality electric version. However, even though the upfront cost is more, gas water heaters usually cost less to operate. This means your annual bills could be significantly lower, resulting in bigger savings over time. Of course, this can vary, as there are some areas of the country where natural gas is more expensive than others.

Be aware that both gas and electric water heater unit costs also vary dramatically. You can pay anything from as low as a few hundred dollars up to more than $2,000. So it pays to do your research.

Energy-Efficiency Information

The U.S. Department of Energy states that water heaters account for around 18% of the average home’s energy use. Of course, you can reduce your bills by simply cutting back on water, but the type of water heater can also make a big difference when it comes to energy efficiency.

Look for an energy factor (EF) rating. Selecting a higher EF rating means you’ll have a more energy-efficient unit. Certain units can be particularly energy-efficient, including electric heat pump and tankless systems. While they can be much more energy-efficient than a standard water heater, they’re more expensive to buy and install. Plus, they don’t work well in areas that experience extreme changes in temperatures. 

Also referred to as point-of-use (POU) water heaters, tankless water heater systems are available in electric and gas models. They’re more energy-efficient than standard tank-based systems that continually heat your water. So much so that the average household can save up to 35% in energy.

Tankless water heating systems aren’t without their drawbacks, though. These systems can cost up to $3,000 and have more complicated installations. It’s also easier to run out of hot water with these types of systems. 

Electric tankless units are less expensive than gas ones, but you’ll probably see more savings over time on your monthly bills..

Ease of Installation: Electric Water Heaters

Electric water heaters beat gas varieties when it comes to the installation process. Plus, they take up less space than a gas tank will. However, since electric work is required, it’s best to leave installation up to a professional.

Gas water heaters need a local water heater contractor to install them—dealing with gas lines and venting are significant safety concerns and not simple tasks.

If you haven’t had a gas water heater before, the installation process is even more complicated and expensive. It requires the running of a new gas line and the installation of proper venting. A straight swap may cost around $500 for the installation, but putting in a gas heater from scratch could end up costing you as much as $2,000. So unless you have a particular need, swapping out an electric system for a gas one isn’t recommended.

Durability: Tie

Although gas water heaters may need more maintenance over the years, there isn’t a great deal of difference in terms of their longevity. A well-maintained gas unit should last at least 10 years, and you may get a couple more years out of your electric system.

Tankless water heater systems can last at least 20 years. So although there are higher upfront costs for the unit and installation, you could get considerably more use out of the system. This is worth considering when making a final decision.

Whichever system you opt for, it’s good practice to have an annual maintenance check to help ensure your tank lasts as long as possible.

Water Heating Speed: Gas Water Heaters

This may be splitting hairs, as the difference isn't substantial, but gas units usually produce heat more quickly than their comparable electric counterparts. This means the amount of hot water the system can provide in a given period (the recovery rate) is typically more for gas systems. They also perform better in their first hour of use (first hour rating).

Safety Considerations for Gas and Electric Water Heaters

Gas water heating systems carry greater risks than electric. Gas leaks, or even explosions, are a possibility, and you might want to install carbon monoxide detectors for peace of mind.

Environmental Impact: Electric Water Heaters

Electric water heaters are usually the more environmentally friendly option. They’re more energy-efficient and can use renewable energy sources such as solar, wind, or hydroelectric.

Frequent Power Outages: Gas Water Heaters

If you live in a region that experiences frequent power outages, opting for a gas water heater could be a sensible precaution.

Limited Space: Electric Water Heaters

Electric water heaters are usually considerably smaller than gas units with a similar specification. This makes them a better choice if you have a small home, or plan to install the unit in a tight space.

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