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Water Heater Operating Costs

Water heaters have been changing a lot this past year (2009-2010). With the federal tax credit in place, manufacturers of water heaters have begun to produce more efficient water heaters. The chart below lists the estimated cost to operate a water heater based on the type of water heater that it is.

Water Heater Type Fuel Source Efficiency (EF) Installed Cost Tax Credits Yearly Energy Costs Expected Life (years) Yearly Cost to Operate*
Heat Pump Electric Electric 2.35 $1999 $600 $159 12 $275
Solar w/electric Sun/Electric 3.0 $6499 $5440 $175 15 $245
Tankless Hybrid Gas .98 $2599 $780 $254 20 $345
Natural Gas Gas .62 $715 $75** $323 10 $387
Electric Electric .92 $649 $0 $450 8 $531

*These numbers assume you take advantage of all tax credit options.

**Southwest Gas rebate for high efficiency gas water heaters. (.62 energy factor or greater)

What is the best deal today?

If your current heater is electric

If you have an electric water heater that needs replacing, an electric heat pump water heater is your best value for the long run. You will save $160 per year with an electric heat pump water heater versus a standard electric water heater. If you don't mind the upfront cost, a solar water heater is an equally good value.

If your current heater is natural gas

If you currently have a natural gas water heater, then replacing it with the same type is a good move. If you would like to be self sustaining and contribute less to your utility company, then a Solar or a Heat Pump Water Heater is also a good value.