Water Heater Cost Calculator
Annual water heating cost from household size, water temperature and energy price, comparing electric, gas and heat-pump units by their Uniform Energy Factor.
Water Heater Cost Calculator: with the default inputs, annual running cost is $662.
About 20 gallons a person is typical; the DOE test procedure uses a 64.3-gallon day for a high-use household.
The all-in rate from your bill, not just the supply charge.
One therm is 100,000 Btu, roughly 97 cubic feet.
- Per month
- $55.16
- Efficiency factor used
- 0.92
- Heat delivered to the water (kWh/year)
- 3,582The useful energy. Divide by the UEF to get what you actually buy.
- Energy you buy each year
- 3,894 kWh
- Electric resistance would cost
- $662
- Natural gas would cost
- $296
- Heat pump would cost
- $174
- Heat pump saving vs electric resistance
- $488
- Heat-pump payback
- 2.5 years at $488 a year saved, before any rebate.
Assumptions
- Water is 8.33 lb per gallon with a specific heat of 1 Btu per pound per °F.
- Uniform Energy Factor already includes standby losses, so tank size does not affect the cost calculation.
- Typical UEFs are for a 50-gallon unit in the DOE medium draw bin; enter your own from the EnergyGuide label for accuracy.
- Inlet temperature is treated as constant year-round.
- Rebates, tax credits, maintenance and installation are excluded from running cost.
| Type | UEF | Energy bought per year | Annual cost | vs your choice |
|---|---|---|---|---|
| Electric resistance | 0.92 | 3,894 kWh | $662 | $0 |
| Natural gas storage | 0.64 | 191 therms | $296 | -$366 |
| Heat pump (hybrid electric) | 3.5 | 1,023 kWh | $174 | -$488 |
Typical factors for a 50-gallon unit. Your own EnergyGuide label overrides the one for the type you selected.
How this is worked out
The formula
heat needed (Btu/year) = gallons per day × 365 × 8.33 lb/gal × 1 Btu/(lb·°F) × (thermostat − inlet, °F) energy purchased = heat needed ÷ UEF electric cost = (Btu ÷ 3,412.14) ÷ UEF × price per kWh gas cost = (Btu ÷ 100,000) ÷ UEF × price per therm
Open How it’s calculated above to see this worked through with your own numbers.
What you enter
- Water heater type
- Choose one of 3 options.Electric resistance (typical UEF 0.92) · Natural gas storage (typical UEF 0.64) · Heat pump (hybrid electric) (typical UEF 3.5)
- People in the household
- A number.from 1 to 12 · whole numbers only · defaults to 3
- Hot water per person
- About 20 gallons a person is typical; the DOE test procedure uses a 64.3-gallon day for a high-use household.from 1 to 80 · defaults to 20
- Electricity price
- The all-in rate from your bill, not just the supply charge.in dollars · from 0 to 2 · defaults to 0.17
- Natural gas price
- One therm is 100,000 Btu, roughly 97 cubic feet.in dollars · from 0 to 10 · defaults to 1.55
- Thermostat setting(under More options)
- The DOE test uses 125 °F. 120 °F is the usual recommendation; below about 120 raises legionella risk.in °F, °C · from 90 to 170 · defaults to 125
- Incoming cold water(under More options)
- The DOE test uses 58 °F. Northern winters run colder, which raises the bill.in °F, °C · from 33 to 90 · defaults to 58
- Your unit's UEF(under More options)
- From the yellow EnergyGuide label. Leave at 0 to use the typical factor for the type you chose.from 0 to 6 · defaults to 0
- Tank size(under More options)
- Used for the sizing check only — standby loss is already inside the UEF.from 0 to 200 · defaults to 50
- Extra cost of a heat-pump unit(under More options)
- Installed price difference versus a plain electric tank, before rebates.in dollars · 0 or more · defaults to 1200
What you get back
- Annual running costmain answer
- Per month
- Efficiency factor used
- Heat delivered to the water (kWh/year)
- The useful energy. Divide by the UEF to get what you actually buy.
- Energy you buy each year
- Electric resistance would cost
- Natural gas would cost
- Heat pump would cost
- Heat pump saving vs electric resistance
- Heat-pump payback
What this assumes
- Water is 8.33 lb per gallon with a specific heat of 1 Btu per pound per °F.
- Uniform Energy Factor already includes standby losses, so tank size does not affect the cost calculation.
- Typical UEFs are for a 50-gallon unit in the DOE medium draw bin; enter your own from the EnergyGuide label for accuracy.
- Inlet temperature is treated as constant year-round.
- Rebates, tax credits, maintenance and installation are excluded from running cost.
About this calculator
Water heating is typically the second-largest energy use in a US home after space conditioning, and unlike heating it runs all year. This calculator works out what yours costs from first principles — the heat the water actually needs, divided by how efficiently your unit delivers it — and prices the same household on all three common technologies.
The physics, briefly
Raising a pound of water by one degree Fahrenheit takes one Btu. A gallon weighs 8.33 pounds. So a household using 60 gallons a day and lifting it from 58 °F to 125 °F needs 60 × 365 × 8.33 × 67 ≈ 12.2 million Btu a year, which is about 3,580 kWh of heat. What you pay for is that number divided by the Uniform Energy Factor of your heater.
Uniform Energy Factor
UEF is the DOE's rating from a standardised 24-hour draw test, and it already includes standby losses from the tank, so tank size does not enter the cost arithmetic separately. Typical values for a 50-gallon unit:
- Electric resistance: 0.92. Electricity into the tank is nearly all delivered to the water; the losses are standby.
- Natural gas storage: 0.64. A third of the fuel goes up the flue.
- Heat pump: 3.5. Greater than 1 because it moves heat rather than making it — it pumps heat out of the room air into the tank.
That last number is the whole story. A heat-pump water heater uses roughly a quarter of the electricity of a resistance tank, which is why it usually beats gas on running cost even where gas is cheap.
How to use it
Pick the type, set the household size, and — this is the input that matters most — put in your actual energy price from the bill, including delivery charges, not the headline supply rate. Under More options you can enter the exact UEF from the yellow EnergyGuide label on your unit, adjust the thermostat and incoming water temperature, and set the installed price premium for a heat pump so the payback figure means something.
Reading the results
Annual running cost is fuel only: no maintenance, no replacement, no standby losses beyond what the UEF captures. The comparison table prices the identical hot-water demand on all three types, which is the honest way to compare — an efficiency rating alone tells you nothing until it meets your energy prices.
Heat-pump payback divides the installed price premium by the annual saving. It ignores rebates and tax credits, which are often substantial and can cut the payback in half.
What this does not model
Well or seasonal inlet temperatures (a northern winter can drop the inlet to 40 °F and add a fifth to the bill), recirculation loops, solar pre-heat, tankless units with no standby loss at all, and the fact that a heat-pump water heater cools and dehumidifies the space it sits in — a bonus in a hot garage, a penalty in a heated basement.
Frequently asked questions
▸How much does it cost to run a water heater per year?
For a three-person household lifting 60 gallons a day from 58 °F to 125 °F, roughly $660 on an electric resistance tank at 17 cents a kWh, about $300 on natural gas at $1.55 a therm, and around $175 on a heat pump.
▸What is a Uniform Energy Factor?
The DOE's efficiency rating from a standard 24-hour draw test: useful heat delivered divided by energy consumed, standby losses included. A UEF above 1 is only possible for heat pumps, which move heat rather than generate it.
▸Is a heat pump water heater worth it?
Usually, on running cost — it uses about a quarter of the electricity of a resistance tank. Whether the installed premium pays back depends on your electricity price, available rebates, and whether the unit sits somewhere you do not mind being cooled.
▸What temperature should my water heater be set to?
120 °F is the usual recommendation: hot enough to suppress legionella, cool enough to limit scalding and standing losses. The DOE efficiency test runs at 125 °F.
▸Does a bigger tank cost more to run?
Only slightly, and the UEF already accounts for it — the test measures standby loss for the unit as sold. Tank size mainly decides whether you run out of hot water, not what you pay.
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