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Electric vs Gas Water Heaters: How do they Compare?

Jennifer Hansen
Last Updated on
by Jennifer Hansen

Suppose you’re fortunate enough to live in an area that has access to both natural gas and electricity. In that case, you have an essential choice: what’s better when comparing an electric vs. gas tankless water heater? Even if you don’t live in an area with access to natural gas, you can purchase a propane-powered water heater if you have a strong preference.

In this article, we’ll go over things like the benefits of both gas and electric tankless water heaters, the drawbacks, how tankless heaters work, and which variety might be best for you.

Tankless Water Heaters Overview

Tankless-Water-Heater

Tankless water heaters are fundamentally different from tank-style water heaters in that they prepare hot water on-demand. When your shower, faucet, or appliance draws hot water, it pulls cold water in through the unit. The cold water passes through a heating element that brings it up to the desired temperature before the water makes its way to you.

As you might imagine, this makes tankless heaters very energy-efficient. Instead of keeping a tank of hot water warm and ready like tank-style water heaters, a tankless unit only works when you need it. This is great if you’re away from your house often, you use very little water, or you have high demand that can exhaust a traditional water heater.

Additionally, tankless heaters often last much longer than tank-style heaters. They’re easy to service and maintain, and they have fewer issues with sediment build-up, too. With proper maintenance, you can expect a tankless water heater to last up to twice as long as a traditional tank-style heater.

That being said, tankless heaters have some drawbacks, too. Tankless water heaters have flow limits: just like a typical water heater, they can only handle so much water at a given time. If you run multiple showers or appliances all at once, a small tankless heater may not be able to keep up.

Tankless water heaters also have a higher upfront cost than tank-style water heaters. They’ll save you money in the long run, so they’re a great choice if you plan to live in your house for several years, but the initial investment may not be worth it if you don’t plan to stay. If you need several tankless heaters to keep up with your flow needs, the initial cost may be even higher.

Gas vs. Electric Tankless Water Heaters

If you’ve decided that a tankless heater is what you need, your next step is to choose between gas and electric. If you don’t have easy access to natural gas and don’t want to deal with maintaining a propane tank, this decision will be an easy one for you! We’ve laid out the essential pros and cons of gas and electric water heaters below.

Yearly Operational/Maintenance Cost: It Depends

The yearly cost gas vs. electric tankless water heater metric goes to electric as a general rule. While gas-powered tankless units are becoming more efficient all the time, gas burners tend to waste much more heat than similar electricity-powered units.

However, the final cost should come down to how much gas and electricity cost in your area. While gas is less efficient than electricity, it can also be much cheaper. If you live in an area with costly natural gas and propane, an electric tankless heater may be a no brainer.

However, if you can obtain propane cheaply in your area or your home has access to natural gas, it’s often better to opt for that instead. Propane can be expensive, but it’s twice as efficient as natural gas. Which one you decide to use will probably come down to upfront cost and whether you want to maintain a propane tank on your property.

Higher upfront cost aside, a tankless heater, whether electric or gas, costs much less to operate than a tank-style unit. For an average household, the costs are as follows:

  • Gas tankless water heater: $200-$600 per year
  • Electric water heater: $75-$300 per year

Keep in mind that, while gas-powered tankless water heaters tend to cost more to operate, they also tend to be larger. Electric tankless heaters tend to be much smaller and more limited in terms of flow. To get the same amount of output as a gas-powered tankless water heater, you might need to invest in multiple electric tankless heaters, which would increase your yearly energy costs.

Size/Capacity: Gas

If you’re looking for a tankless water heater to provide for your entire house, you’ll most likely end up purchasing a gas-powered unit. Electric tankless heaters are more efficient than gas-powered units, yes, but because they don’t heat water as fast, they’re much more limited in terms of flow. This is compounded further the more you turn up the temperature of your tankless water heater.

For example, the largest gas powered tankless heaters can handle upwards of ten gallons per minute. In contrast, electrical units can’t handle much more than five (with a few notable exceptions — see the “incoming temperature” section below).

You can work around this by purchasing multiple tankless water heaters, but this will raise the total price. It may take longer for you to start seeing a return on your investment if you have multiple units, too.

Incoming Temperature: It Depends

The exception to tankless heater efficiency is when it comes to incoming water temperature. Incoming water temperature refers to how hot or cold your water is when it enters your house from a well or the street. In warm climates, your water might already be close to room temperature, but in cold climates, it could be close to freezing.

Gas-powered tankless water heater units are much better at handling cold temperatures since gas tends to heat water much faster. However, if you live in a warm climate, you may not need a gas heater, since an electric tankless heater can handle a much higher volume of water.

To put this in perspective, recall that we listed the relative maximum of electric tankless water heaters at about five gallons per minute. However, in warm regions, the same tankless heater may be able to handle eight or more gallons per minute instead. As such, which unit you end up choosing depends heavily upon where you live.

Efficiency: Electric

If you’re concerned about the environment, then without question, an electric tankless water heater is a better choice. Gas tankless water heaters give off greenhouse gases that are a by-product of the heating process. While current-generation gas tankless heaters have up to 96% energy efficiency, they’ll never compete with electric models (which are always 100% efficient).

The addition of solar power to your electric tankless water heater can make it even more efficient (and, in sunny regions, even more cost-effective than gas-powered units).

Installation and Maintenance: Electric

Because electric tankless water heaters don’t require additional venting, they’re much easier to install than gas-powered tankless heaters, with one notable exception: your home must be able to support the increased electrical demand. If not, you may need to have a professional rewire parts of your home, which can make the installation process nearly as invasive as a gas-powered unit.

There is one notable exception to gas-powered tankless heater installations, too: outdoor units. Ventless tankless water heaters can be installed on the exterior of your home, meaning you don’t need to cut into your walls or roof to install a venting system. These heaters are much less expensive to install, but you will still have to run new gas lines to the system, so an electric tankless model is usually still cheaper.

Maintaining an electric unit is much easier, too, since you don’t have a gas burner or pilot light to worry about. Unfortunately, the total life cycle of an electric tankless heater is much shorter than a gas-powered unit, with electrical units lasting for 7-10 years and gas-powered units lasting up to 20 years.

Purchase Cost: It Depends

If we’re looking at the base prices of tankless water heaters, electric heaters will have the advantage. Point-of-use electric tankless water heater units are exceptionally inexpensive, and small units can cost as little as $75. However, the bigger your unit gets, the more expensive it becomes, and this is true for both electric and gas units.

The approximate price tiers for some electric and gas tankless water units based on size are listed below. Keep in mind that they are measured differently, though — electric units are measured in kilowatts, while gas units are measured in British thermal units (BTUs). Electric units also tend to be smaller than gas units across the board.

Converting kilowatts to BTUs requires a bit of math, but it’s generally accepted that 1 kilowatt equals about 3,412 BTUs per hour. As such, the electric tankless heaters have also been converted to BTUs to make it easier to compare them.

Electric tankless water heater purchase costs:

  • < 6 kW = $100-$225 (~20,000 BTUs)
  • 15-18 kW = $365-$550 (~50,000-60,000 BTUs)
  • 32-36 kW = $435-$800 (~110,000-120,000 BTUs)

Gas tankless water heater purchase costs:

  • 120,000-140,000 BTUs = $500-$1,200
  • 190,000-199,000 BTUs = $1,000-$2,200

As you can see, electric tankless water heaters are cheaper on average, but only because they’re smaller. If you’re looking to choose based on a price versus output ratio, gas tankless units quickly become cheaper, especially once you start purchasing multiple electric tankless heaters.

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About Jennifer Hansen
Jennifer Hansen
Jennifer is a mother of 2 and has always been a careful shopper, determined to make the best buying decisions for her family. She loves researching the marketplace to find the right products for her household. She leads a small but mighty team of writers in bringing you WaterFilterSpot.
Jennifer Hansen
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