Quick answer: Electric units cost less to buy, are simpler and cheaper to install, and are safer and easier to maintain — but usually cost more per month to run and reheat slower. Gas units cost more up front and need proper venting, but typically heat faster and cost less to run where natural gas is cheap. The deciding factor is usually what your home is already set up for.
The biggest mistake I see is people shopping on sticker price alone. The unit is only part of the cost — the bigger question is what fuel your house already supports, because switching fuel types is where the real money goes.
Side-by-side
| Factor | Electric | Gas (natural gas / propane) |
|---|---|---|
| Unit cost | Lower | Higher |
| Install cost | Lower (just electrical) | Higher (needs venting; gas line) |
| Monthly running cost | Often higher | Often lower where gas is cheap |
| Recovery speed | Slower | Faster |
| Efficiency | Very high (few losses) | Lower (flue heat loss) |
| Works in a power outage? | No | Some models (standing pilot) |
| Maintenance / safety | Simplest, no combustion | Needs venting + combustion safety |
| Best for | Homes without gas; smaller demand | Homes on gas; high demand; fast recovery |
The honest deciding factor: what’s already there
- Already on gas → replacing gas with gas is the cheapest path. You keep the existing venting and gas line.
- All-electric home → going gas means adding a gas line and venting — hundreds to over a thousand dollars. Usually not worth it just for lower monthly bills.
- No natural gas on your street → electric (or a heat-pump electric unit) is almost always the answer.
See the full install-cost breakdown: Cost to Replace a Water Heater →
Running cost reality
Gas is often cheaper per month where natural gas prices are low, which is much of the country. But high-efficiency heat-pump electric units have changed the math — they can be cheaper to run than gas in some regions. If your monthly bill is the priority, check your local gas vs. electric rates before deciding.
Don’t forget recovery speed
This is the one homeowners underestimate. Gas reheats faster — if you have a big household and back-to-back hot-water demand, a gas tank (or a properly sized tankless) keeps up better than a same-size electric tank. Comparing tank vs tankless too? Read this →
A plumber’s bottom line
- Already on gas, high demand → gas.
- All-electric home, or no gas line → electric (look hard at a heat-pump model for running cost).
- Don’t switch fuel types just to chase a lower monthly bill — the conversion cost usually eats the savings for years.
- In hard-water areas, plan to flush it yearly. Hard water signs & fixes →
Ready to shop? Best Water Heaters → · Best Tankless →
Frequently asked questions
Is gas or electric cheaper to run?
Gas is often cheaper per month where natural gas is inexpensive, but high-efficiency heat-pump electric units can beat gas in some areas. Check your local rates.
Can I replace a gas water heater with electric?
Yes, but you may need an electrical upgrade, and you lose the faster gas recovery. Going the other way is pricier because it needs a gas line and venting.
Which lasts longer?
Lifespan is similar (~8–12 years for tanks of either type); water quality and maintenance matter more than fuel.
Does an electric water heater work in a power outage?
No — it needs electricity. Some gas units with a standing pilot will still produce hot water during an outage.
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