How much does it cost to run a water heater?

Monthly cost by state

These figures assume a household that uses 20,075 gallons of hot water a year, the amount in the federal efficiency test, priced at the U.S. Energy Information Administration's latest state averages.

Our estimates. Electricity: EIA average residential price by state, January to August 2026. Gas: EIA average residential natural gas price for 2025 (*2024 for Connecticut and Maryland, where 2025 isn't published). Annual figures and a comparison of the two fuels are in gas vs electric water heater.

How we worked it out

The Department of Energy's Federal Energy Management Program (FEMP) lists a standard electric tank (UEF 0.95) as using about 3,437 kWh a year to make 20,075 gallons of hot water, and an ENERGY STAR heat pump model (UEF 3.3) about 984 kWh. For gas, we took the same amount of heat delivered to the water and divided by 0.58, the federal minimum UEF for a 40 gallon medium-draw gas tank under 10 CFR 430.32. That comes to about 192 therms a year.

Then we multiplied by energy prices. EIA reports gas in dollars per thousand cubic feet; it says to divide by 10.37 to get dollars per therm. At U.S. averages (18.19 cents per kWh and $15.34 per thousand cubic feet, about $1.48 a therm), that gives $625 for standard electric, $179 for a heat pump and $284 for gas.

Work out your own cost

Find the price per kWh or per therm on your utility bill (use the total including delivery charges, divided by usage), then:

• Standard electric tank: 3,437 × your price per kWh
• Heat pump water heater: 984 × your price per kWh
• Gas tank: 192 × your price per therm

Scale it to your household. Those figures assume about 55 gallons of hot water a day. A household that uses half that will pay roughly half; a bigger household will pay more.

What it costs per hour of heating

When an electric element is on, it draws its rated wattage. A 4,500 watt element uses 4.5 kWh for each hour it runs, about 82 cents an hour at the U.S. average price. On a typical tank the two elements take turns rather than running together, as Rheem's spec sheets note. A 40,000 Btu gas burner uses 0.4 therm an hour, about 59 cents at the U.S. average. The heater only runs when it's reheating water or making up heat lost from the tank.

What drives the cost up

• How much hot water you use. EPA WaterSense says a standard showerhead uses 2.5 gallons a minute and a WaterSense model no more than 2.0, hot and cold combined. Long showers and hot laundry loads add up fastest.
• The thermostat setting. The Department of Energy recommends 120°F, which it calls safe for most of the population (see what temperature a water heater should be).
• Heat lost from the tank and pipes. DOE says insulating a tank that's warm to the touch can save 7% to 16% a year on water heating, and insulating hot water pipes another 3% to 4%.
• Cold incoming water. A. O. Smith notes the heater works harder in January than in July, so winter costs are higher.
• Leaks. DOE says one drip per second wastes 1,661 gallons of water a year and can cost up to $35. A leak on the hot side of the plumbing also keeps the heater running; A. O. Smith says the burner may run almost all the time while you get little hot water.

How to lower the bill

The Department of Energy lists four ways to cut water heating costs: use less hot water, turn the thermostat down, insulate the tank and pipes, and buy a more efficient model. Its other tips include low-flow showerheads and faucet aerators, heat traps on the pipes at the heater (most new heaters have them built in) and fixing leaky faucets. For a replacement, DOE says that where temperatures stay between 40°F and 90°F year-round, a heat pump water heater could save more than $300 a year (see heat pump water heater pros and cons).

Maintenance helps too. Sediment on the tank bottom or lime on electric elements slows heating; A. O. Smith recommends draining and flushing a tank at least once a year (see how to flush a water heater).

When the bill jumps for no reason

If water heating costs climb without a change in how you use hot water, look for a problem. A hot-side leak keeps the heater running. An electric element shorted to ground can heat nonstop until the high-limit trips, which Bradford White says is the usual cause of a reset button that keeps tripping (see reset button keeps tripping). A relief valve that drips sends heated water down the drain (see relief valve leaking). And an old tank loses efficiency as sediment builds up; see signs your water heater is going bad.

Electricity prices vary a lot across the areas we serve: EIA's 2026 averages run from about 13 cents per kWh in Idaho to about 30 cents in Massachusetts.