Gas Vs Electric Water Heater Monthly Cost Comparison (State-By-State)

Every time we talk about water heating costs, we come across the question “Electric vs gas water heater cost; which is cheaper?”. It’s pretty much unavoidable. To put the debate if it is cheaper to heat water with gas or electricity to rest, we have made a full comparison of yearly and monthly gas vs electric water heater costs.

How to definitely say that households that use either gas water heating pay lower bills than households that use electric water heaters?

We have to look at the data. We can’t just go by an individual household saying “Well, I get a $20 monthly water heating bill because I use gas. Electric heater would probably be $30+ per month”. That’s just one household.

To adequately calculate the yearly gas vs electric water heater costs, we need to look at all the water heating bills paid across the US. And, luckily, we actually have this data. Namely, the US Energy Information Administration releases Residential Energy Consumption Survey (RECS) data. This includes, among numerous other data, all the water heating bills paid in the US by 118.2 million households (the latest RECS datasets).

Based on this data, we will look into how much do households with gas water heaters pay for heating water, and how much do households with electric water heaters pay for heating water. We will compare the gas vs electric monthly water heater costs state-by-state since the financial viability of gas vs electric water heating depends heavily on the price of natural gas and electricity, and this differs state by state.

Note: We are not talking about the gas vs electric water heater environmental impact. We are simply calculating the financial viability for either gas or electric water heating. It’s about the water heating bill, not the planet.

Let’s take a structured approach here. Here is the breakdown that will give us a definitive answer as far as the fuel choice for water heating is concerned:

1. First, we will look at the average US yearly water heating costs by fuel (gas, electricity, propane, fuel oil/kerosene) and look at gas vs electric water heating costs for 1, 2, 3, 4, 5, and 6-family homes.
2. Then we will compare the yearly electric vs gas heating bills state-by-state. You will see if households with electric water heaters pay more for water heating than households with gas water heaters (we take average water heater yearly bills from US regions provided by RECS datasets).
3. Finally, we are going to calculate the electric vs gas water heating monthly cost state-by-state. With this, you will have a look into how much per month you should be paying for water heating in your state.

Let’s start with the water heating cost statistics that we find in the government’s RECS datasets:

US Average Water Heating Costs For 118.2 Million Households

According to the latest RECS datasets available here (we are pulling this data), there are 118.2 million households in the US. Collectively, we pay $34.89 billion annually just for water heating.

Here is the breakdown of how many households have gas vs how many have electric heating, and how much we pay for heating water:

• 40.9 million households (34.6%) use electricity for heating water (electric boilers, tankless electric water heaters). Collectively, these households pay $21.02 billion in water heating bills annually. On average, that comes to $381/year per household (or $31.75 monthly water heating bill).
• 57.7 million households (48.8%) use natural gas for heating water (gas boilers, gas tankless water heaters). Collectively, these households pay $11.10 billion in water heating bills annually. On average, that comes to $197/year per household (or $16.42 monthly water heating bill).
• 5.0 million households (4.2%) use propane for heating water. Collectively, these households pay $1.68 billion in water heating bills annually. On average, that comes to $394/year per household (or $32.83 monthly water heating bill).
• 5.8 million households (4.9%) use fuel oil or kerosene for heating water. Collectively, these households pay $1.09 billion in water heating bills annually. On average, that comes to $382/year per household (or $31.83 monthly water heating bill).

From these data, we quickly see that:

• Gas and electric water heating are both cheaper than propane or fuel oil/kerosene water heating.
• On average, gas water heating is way cheaper ($197/year) than electric water heating ($381/year).

Now, we need to take into account that these are absolute averages for all households across the US. The monthly water heating bill will depend on several key factors, including:

• Price of electricity and natural gas. This varies state-by-state and even city-by-city. That’s why we looked into RECS data to check the gas vs electric heater financial viability on a state-by-state basis (based on the data available from the RECS census).
• Hot water usage. Obviously, 2-family homes will use less hot water than 5-family homes; and will pay less for either electricity or gas.
• Size of a water heater (secondary importance). We have 30-gallon, 50-gallon, and 80-gallon water heating boilers. All the electric boils will use the same heating element – 4500-watt tubular heater – and will thus have the same heating expenses.
• Type of water heater. As we know, both gas and electric tankless water heaters’ yearly costs should be lower than gas and electric conventional storage-based water heaters. That’s because tankless units are more efficient than conventional heaters.

Before we look at state-by-state data, it is useful to keep in mind how hot water usage and cost differ for 1, 2, 3, 4, 5, and 6+ family homes. Here is the data:

• Average US 1-family home will pay $330 annually for electric water heating vs $107 annually for gas water heating.
• Average US 2-family home will pay $402 annually for electric water heating vs $170 annually for gas water heating.
• Average US 3-family home will pay $357 annually for electric water heating vs $232 annually for gas water heating.
• Average US 4-family home will pay $408 annually for electric water heating vs $284 annually for gas water heating.
• Average US 5-family home will pay $439 annually for electric water heating vs $482 annually for gas water heating.
• Average US 6+ family home will pay $450 annually for electric water heating vs $444 annually for gas water heating.

As you can see, the difference between electric vs gas water heating for 1, 2, 3, and 4 family homes is quite big (even $200/year) in favor of cheaper gas heating. For 5 and 6 family homes, the electric and gas water heating yearly costs are pretty much neck-a-neck.

Alright, we know that the financial viability of gas vs electric water heating comes down to the prices of gas and electricity. These vary from state-to-state. That’s why we used US regional RECS data to calculate the average water heating cost for electric vs gas heating on a state-by-state basis. Here are the yearly costs comparisons:

Yearly Gas Vs Electric Water Heating Costs State-By-State

As we can see from this chart, gas water heating is always preferable over electric water heating. Some states may have lower electricity prices while other states have lower gas prices. Regardless of these prices, however, the average US household in each state will benefit financially by opting for the gas water heater.

Let’s look at the state-by-state monthly water heating costs as well:

Monthly Gas Vs Electric Water Heating Costs State-By-State

Again, we see that gas vs electric water heating monthly cost is, on a state-by-state average, always lower if we use natural gas for heating water.

The monthly state-by-state water heating cost ranges:

• From $17.17 to $20.42 per month for gas water heating.
• From $24.92 to $34.33 per month for electric water heating.

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All in all, we have seen that using gas water heaters will reduce the yearly and monthly water heating costs compared to electric water heating. In every state, the monthly heating bills are lower if you are using gas-powered water heaters.

However, it needs to be pointed out that the initial cost of gas water heaters is usually much higher than the initial cost of electric water heaters (heaters + installation + labor costs). On top of that, we also need to take the environmental factor into account. Generally, using electricity is more eco-friendly than heating water with gas.

You can also check:

• Full water heating costs analysis here.
• Average therms per month usage for space, water heating, as well as running other appliances here.
• Electric water heater electricity (kWh/month) usage and costs here.

With all of these water heating cost calculations, we hope that the dilemma between gas vs electric water heating costs is put to rest. Using the statistical analysis with the RECS databases for utility bill payments across the US, we see that gas water heaters have a lower monthly operating cost.