Gas or electric, and what the answer really turns on

The cost guide prices tanks by size, not fuel

The cost guide we cite, in an archived copy dated August 8, 2025, quotes the installed price of a fifty-gallon tank as $700–$3,100^[1] — by capacity, not by fuel. So this site cannot say whether a gas or an electric fifty-gallon tank costs more to buy. What it can price separately is the work around the appliance.

For gas that work is the exhaust path. Reusing a sound flue has no separate price in the guide we cite; creating one where none exists is $500–$1,500^[1], comparable to the conversion line itself ($400–$2,000+). For electric it is the supply: a new dedicated circuit at $250–$900^[1]. A house that already has the right one of those for the fuel it already burns is the cheap case.

The efficiency numbers look decisive and are not comparable

Federal minimum efficiency is written per product class. A fifty-gallon gas storage heater in the medium usage bin has to reach 0.56^[2]; the equivalent electric resistance heater has to reach 0.92^[2] (our evaluation of each class’s formula at fifty gallons). Read casually, that says electric is far better.

It is the wrong comparison, because the two ratings are measured at different points in the chain. Both describe how much of the energy arriving at the appliance ends up in the water. An electric element is close to perfect at that, because resistance heating in a tank has almost nowhere else for the energy to go; a gas burner sends part of its heat up the flue by design, because the flue is also how the combustion products leave. Comparing the ratings alone ignores what each fuel costs.

Putting the fuels on one axis fixes it. A kilowatthour carries 3,412 British thermal units^[3] and a cubic foot of gas about 1,037^[4], so both prices convert to dollars per million Btu. Divide that by the efficiency floor and you have the cost of heat actually delivered into the water, which is the only figure the two fuels can be compared on.

What the delivered price says

At national average residential prices — 18.44¢ a kilowatthour (May 2026, marked preliminary by EIA)^[5] and $15.34 per thousand cubic feet of gas (2025 annual average)^[6] — the purchased energy costs $54.04 and $14.79 per million Btu respectively. Dividing each by its efficiency floor (medium-usage bin, fifty-gallon tank) gives $58.74 and $26.41 per million Btu of heat delivered into the water: electric resistance costs about 2.2 times what gas costs for the same hot shower.

The state detail matters more than the national figure, and it runs one way. On these floors, across all 45 states with an annual residential gas price in the release this site uses, there is not one where electric resistance is cheaper to run than gas. What changes is the size of the gap: 1.10 times in Florida, where electricity is cheap and gas is not, and 4.03 times in Alaska. If you have gas at the house and a working flue, an electric resistance tank is the more expensive choice on these floors in every one of those states. The running-cost tool, which rates a fifty-gallon tank in the low-usage bin, shows the electric tank slightly cheaper in Florida ($618 against $621 a year) at its default 64 gallons a day, an assumed figure.

Then there is the third option that ruins the tidy conclusion. A heat pump water heater does not make heat, it moves it, and federal guidance puts it at 2 to 3 times as efficient as resistance^[7]. Run the same arithmetic with the minimum for a sixty-five-gallon heat pump and the delivered cost falls to $26.36 per million Btu at national prices — level with gas rather than double it. State by state it is genuinely close: a heat pump is cheaper to run than a gas storage heater in 19 of those 45 states and dearer in the other 26; the running-cost tool, which uses a derived figure for a fifty-gallon heat pump, finds it cheaper in 32. That is the one comparison on this page that cannot be settled nationally, and the heat pump page works through what it costs to buy into.

Published annual running costs (historical estimates, archived copy of the cost guide dated August 8, 2025) land in the same place from the other direction: $250–$420 a year for a gas tank^[1] against $530–$600 for an electric one^[1]. Two independent routes to the same conclusion is worth more than either alone, and where they disagree this site says so rather than quietly picking the friendlier one.

Switching fuel is where the money actually goes

A running-cost gap of a few hundred dollars a year invites the obvious question. Converting electric to gas is published at $400–$2,000^[1], and that upper figure carries a plus sign in the source: the top of that band is open-ended, not capped, and this site treats the published number as the top of the range while saying plainly that the real top is unbounded. Going the other way, gas to electric, is published at $250–$1,000^[1] with the same open-ended top.

Neither figure is the whole conversion. Electric to gas may add a first-time flue and a larger gas supply line at $350–$750^[1]. Gas to electric adds the circuit, and where the service cannot carry the new load, a panel at $850–$1,700^[1]. Stack the usual electric-to-gas case — conversion, first-time flue and larger gas line, $1,250–$4,250 in the cost guide we cite — and it can cost more than the water heater. At national prices the running-cost tool puts an electric tank at $751 a year and a gas tank at $374 (64 gallons a day assumed), a $377 gap that repays the $2,750 midpoint of that stack in about 7 years, inside the 10 to 15 years federal guidance gives a storage tank^[8]. Run it with your own state price before deciding.

Which is why the honest advice is narrow. If both fuels are already present and serviceable at the appliance, choose on the delivered price above. If only one is present, compare the conversion stack with your own running-cost gap over the appliance’s life before deciding. The one moment a conversion genuinely deserves a hearing is when the old appliance has already failed and the flue or the circuit is being rebuilt anyway — the cheapest time to change type is the moment you were paying for the work regardless.

What this comparison does not know

The energy prices here are state averages across every residential customer and every tariff in the state. Yours is on your bill and will differ, sometimes considerably, and neither figure includes the fixed monthly charge you pay for having the connection at all — which is precisely the charge that decides whether dropping a gas connection entirely is worth anything. For propane this site uses the U.S. price from EIA’s weekly series, $2.674 a gallon for the week ending March 30, 2026^[9], so every state shows the same number; at $29.24 per million Btu purchased it sits between the other two.

The efficiency figures are floors, not ratings. They are what an appliance is forbidden to be worse than, and a real unit may beat its floor, which narrows or widens the gap above in whichever direction your two candidates happen to sit. If you have the EnergyGuide label for the appliances you are actually choosing between, the running-cost tool takes your own number in place of the floor, and that answer is better than this page. Finally, in the EIA release this site uses, 6 states and jurisdictions have no annual residential gas price, so they are absent from every count above rather than filled in from a neighbour. That release revised Louisiana and Mississippi by one cent from EIA’s July 31, 2026 release and added an Oklahoma figure. EIA’s page moves on at its next release (due October 30, 2026), and this site keeps the September 30 figures until it re-checks them.

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