Water Heater Operating Costs

Operating cost comparisons by type of water heater

Water heaters have been changing a lot this past year (2009-2010). With the federal tax credit in place, manufacturers of water heaters have begun to product more efficient water heaters. The chart below lists the estimated cost to operate a water heater based on the type of water heater that it is.

Water Heater Type	Efficiency (EF)	Installed Cost	Federal Tax Credit	Yearly Energy Cost	Expected Life (years)	Yearly Cost to Operate*
Gas (Natural)	.60	$700	$0	$350	8	$437
Electric	.90	$700	$0	$513	8	$600
Tankless Gas	.82	$3000	$1000	$256	10	$456
Heat Pump Gas Water Heaters	95%	$5000	$1500	$190	8	$627
Heat Pump Electric Water Heaters	2.0	$3000	$1000	$190	8	$440
Solar Water Heating	1.20	$6,000	$2000	$175	15	$441

* These numbers assume you take advantage of the tax credit.

What is the best deal today?

If your current heater is electric

If you have an electric water heater that needs replacing, an electric heat pump water heater is your best value for the long run. You will save $160 per year with an electric heat pump water heater versus a standard electric water heater. If you don't mind the upfront cost, a solar water heater is an equally good value.

If your current heater is natural gas

If you currently have a natural gas water heater, then replacing it with the same type is a good move. If you would like to be self sustaining and contribute less to your utility company, then a Solar or a Heat Pump Water Heater is also a good value.