Gas or electric, and what the answer really turns on

The purchase price is not where they differ

A published cost guide quotes the installed price of a fifty-gallon tank as $700–$3,100^[1] — by capacity, not by fuel. That is worth pausing on rather than skipping past. The source does not split its tank prices by fuel because the split is not where the money is; two fifty-gallon heaters of different fuels land in the same band, and the number that separates two real quotes is the work around the appliance rather than the appliance.

For gas that work is the exhaust path. Reusing a sound flue costs almost nothing; creating one where none exists is $500–$1,500^[1], which is the single largest line in most fuel-switch quotes. 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, and it is the case almost everybody is actually in.

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]. Read casually, that says electric is far better, and every year somebody buys an electric tank on exactly that reading.

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. The losses that make electricity expensive happened before it reached the house, and they are already priced into the number on your bill. Comparing the ratings alone compares the appliances while ignoring what the 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^[5] and $15.34 per thousand cubic feet of gas^[6] — the purchased energy costs $54.04 and $14.79 per million Btu respectively. Dividing each by its efficiency floor 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. Across all 44 states with a published annual residential gas price, 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 expensive choice everywhere, and no amount of appliance shopping closes that gap.

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 large heat pump unit 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 18 of those 44 states and dearer in the other 26. 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 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, and the answer is usually no. 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 frequently adds 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 realistic case in either direction and the conversion costs more than the water heater, which means it is repaid over a decade or more by an appliance that will not last that much longer than the payback.

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, the conversion cost almost always outweighs the running-cost gap, and the right move is to replace like for like and spend the difference on a better appliance. 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. Propane is a special case: it is published only as a single national weekly series at $2.674 a gallon^[8], so every state shows the same number, and at $29.24 per million Btu purchased it sits between the other two rather than beside gas where people expect it.

The efficiency figures are floors, not ratings. They are what an appliance is forbidden to be worse than, and a good unit beats its floor — sometimes by a lot, 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, 7 states and jurisdictions publish no annual residential gas price at all, so they are absent from every count above rather than filled in from a neighbour.

Questions people actually ask