Water Heating Cost Calculator
What hot water costs on each type of heater
Compare a heat pump water heater, an electric resistance tank, a gas tank and a tankless unit side by side on the same household demand — annual running cost, ten-year cost, and how long a switch takes to pay back.
All four, same demand
| Water heater | Efficiency | Fuel per year | Per year | 10 years |
|---|
The demand behind it
- Hot water drawn per day
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- Temperature rise
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- Useful heat needed per year
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- Share of a typical household energy bill
Show the working
How this is calculated
Every assumption is listed so you can disagree with it. If a figure here is wrong, tell us and we will fix it.
The model
Every option has to deliver the same useful heat, so that is calculated once and then divided by each appliance's efficiency:
gallons/day = people × gallons per person BTU/year = gallons/day × 365 × 8.34 × (setpoint − incoming) fuel/year = BTU/year / (energy per unit × efficiency)
8.34 is the weight in pounds of a US gallon of water, and water takes one BTU per pound per degree Fahrenheit — so that expression is just mass times temperature rise.
The efficiency figures
- Heat pump water heater — a COP of 2.4 to 3.5 depending on the air around it. It is a refrigerator running backwards: it moves heat rather than making it, which is why it beats resistance by a factor of three. It also cools and dehumidifies the space it sits in, which is a bonus in a humid basement and a penalty in a heated one.
- Electric resistance — effectively 100% at the tank, but that is the ceiling. Every kWh in gives one kWh of heat and no more.
- Gas tank — around 62% once standby loss up the flue is counted. The burner is efficient; the tank sitting hot all day between draws is not.
- Gas tankless — around 82%, because there is no tank to keep hot. The gain over a gas tank is real but smaller than the marketing suggests, and it comes with a higher installed cost and often a gas line upgrade.
Why the answer flips
Which option wins is decided almost entirely by your local price ratio between electricity and gas, not by the appliances. Where electricity is cheap relative to gas, a heat pump water heater wins outright. Where gas is very cheap, gas can still win on running cost even against a COP of 3. Put your own two prices in before believing any general claim about this, including ours.
What this leaves out
No standby loss modelling beyond what is baked into the efficiency figures, no recovery-rate or first-hour-rating check (a heat pump unit reheats more slowly, which matters for back-to-back showers), no maintenance, and no equipment lifespan difference. It also ignores the space and clearance a heat pump unit needs, and the noise it makes — both real constraints in a finished basement.
Sources
The constants and default values above come from these public sources. Every one is free to read and none of them are ours — check the figures against them.
- DOE — Sizing a New Water Heater First-hour rating and the daily hot water demand figures behind our per-person defaults.
- ENERGY STAR — Water Heaters Uniform Energy Factor ratings for specific models, which is where the efficiency figures come from.
- DOE — Heat Pump Water Heaters How they work, the space and air-volume they need, and their cold-space limitations.
- EIA — Electricity and Natural Gas Prices Current residential rates for both fuels — the ratio decides the answer.
Built by Vano Gelashvili
Vano Gelashvili is a software developer who builds the calculators on this site. He is not an HVAC engineer, and says so on every page: what he brings is the arithmetic, worked openly against published data.