Choosing the right type of water heater can make a surprising difference in your home’s energy bills and comfort, and I bet it's something you haven't thought about a lot. Gas and electric models each offer unique benefits, from efficiency to installation flexibility. Whether you're looking to reduce monthly costs or simplify maintenance, understanding the pros and cons of each type can help you make the best choice for your needs.

Gas Water Heaters: Pros and Cons

  • Fast Heating: Gas models tend to heat water quickly, making them great for larger households with high hot water demands.
  • Lower Operating Costs: Natural gas is often cheaper than electricity in many areas, which can lead to lower monthly bills.
  • Power Outage Performance: Since gas units don’t rely on electricity, this fuel source can keep running during power outages—a dream to keep the host water supply flowing in storm-prone areas.
  • Higher Installation Costs: The initial setup for gas heaters often includes venting and possibly gas line modifications, which can raise installation expenses.
  • More Maintenance: Gas heaters can require more maintenance especially around venting to ensure safe exhaust and preventing gas leaks. But if you already have other gas appliances, it doesn't add much work.

Electric Water Heaters: Pros and Cons

  • Lower Installation Costs: Installation is typically easier and cheaper since it doesn’t require venting.
  • Efficiency: Electric units are generally more energy-efficient, converting almost all energy into heat, making them eco-friendlier.
  • Consistent Performance: With no pilot light or burners, electric water heaters tend to have simpler, more reliable performance with fewer parts to maintain.
  • Higher Operating Costs in Some Areas: Depending on your local electricity rates, operating an electric heater will reflect that. If you are eager to get off of fossil fuel reliance, or if you already use solar panels, an electric hot water heater is a good option.
  • Slower Recovery Rate: Electric models can take longer to heat water after it’s depleted, so they might struggle to keep up with larger household demands with high hot water needs. This can be more annoying in climates where the starting temperature is very cold water.
Wrapping a water heater in fiberglass insulation.
Protect your hot water heater during the winter by wrapping it in insulation. Credit: © USA Today Network

Comparing Costs of Ownership

While both options heat water effectively, their lifetime costs can differ based on fuel prices, maintenance, and household water usage. Typically, gas heaters have lower monthly costs in areas where natural gas is cheaper than electricity, but maintenance and installation costs can tip the scale slightly. If you already have low electric bills, this investment shouldn't add too much to your costs over time.

Upfront Costs

Upfront, electric water heaters generally have a lower price tag and simpler installation process, especially if there’s already a 240-volt connection in place. In contrast, gas models tend to cost a bit more, particularly if your home doesn’t already have a venting system or a nearby gas line. The cost of installation can really add up if your home needs extensive retrofitting to accommodate a gas water heater. In those cases, electric systems can save you hundreds in initial costs.

Operating Costs: Gas vs. Electric

Operating costs come down to your local utility rates. In areas with low natural gas prices, a gas water heater may be more economical month-to-month, especially for families with high hot water usage. Electric models will be less expensive to operate, particularly if your area has invested in renewable energy sources that offer lower energy costs. Electric appliances also continue to see rapid technology advancements. In the case of a water heating unit, a heat pump electric model, or high-efficiency tankless heaters which can drastically reduce monthly energy use.

Water lines on a tankless hot water heater.
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When it's time to upgrade a water heater, what should homeowners consider?

Choosing between gas and electric hot water heater may depend on the specific needs of your home, your current setup, and the long-term costs. If you’re replacing an existing gas heater, the natural choice might be to stick with gas to avoid installation changes. But, if you’re open to retrofitting or want a simpler setup, switching to electric could bring lower initial costs and reduce the need for regular maintenance. Energy efficiency is a big factor too—and you can consider a tankless water heater in gas or electric to have hot water on demand which can save money by bypassing storing a large tank at temp in a cold climate.