Most US homes with natural gas service use natural gas water heaters. Homes without natural gas service often use propane (LP) — typically homes in rural areas, second homes, or homes where extending the natural gas main is impractical. The water heater hardware is largely identical; the gas valve and orifice are tuned for the specific fuel.
Operating cost comparison
| Fuel | Cost per therm | 50-gal annual cost (3-person home) |
|---|---|---|
| Natural gas (typical 2026) | $1.20-1.80 | $200-300 |
| Propane (typical 2026) | $2.80-4.20 | $450-600 |
Propane typically costs 2-3× natural gas per BTU. Over the lifetime of a water heater, this adds up substantially — for a 12-year-life tank, propane operating cost premium over natural gas can exceed the entire unit cost.
When propane makes sense
- No natural gas service available (running gas line is prohibitive)
- Property already has propane for other appliances (range, generator, pool heat)
- Off-grid scenarios where propane delivery is established
- Cabin / second home with seasonal use (propane more flexible than NG bill maintenance)
When electric beats propane economics
For households without natural gas service, electric water heaters (especially heat pump electric with IRA credit) usually beat propane on operating cost in 2026:
- Propane 50-gal annual: $450-600
- Heat pump electric 50-gal annual: $130-200
- Resistance electric 50-gal annual: $420-650 (similar to propane)
If you have propane service and a heat pump install location, switching to heat pump electric saves $250-400/year operating cost vs continuing with propane.
Hardware differences
- Gas valve: propane uses different orifice size; valve is "LP-rated"
- Conversion kits available on most major brands — convert NG to LP or vice versa
- Operating pressure: NG 7" WC; LP 11" WC inlet pressure
- Burner orifice diameter: smaller on LP (higher pressure, less volume needed)
Conversion kits
If you\'re moving between fuels (e.g., extending natural gas service to a previously-propane property), conversion kits are available:
- Rheem, AO Smith, Bradford White conversion kits: $40-80
- Includes new orifices, gas valve calibration components
- Should be installed by licensed gas-fitting professional
- Always verify the unit is rated convertible (some models are NG-only or LP-only)
Pricing — propane-specific water heaters
Same unit cost as natural gas equivalents. Propane availability:
- Rheem Performance 50-gal LP: ~$649-849
- AO Smith Signature 50-gal LP: ~$749-949
- Bradford White RG250T6X (LP): ~$899-1,099
Brands sometimes special-order LP versions; verify availability at your retailer before ordering.
Combustion air requirements (same for both)
- 50 cubic feet per 1,000 BTU input
- 40-gal at 30k BTU: 1,500 cu ft room or louvered combustion air openings
- 75-gal at 76k BTU: 3,800 cu ft room or engineered combustion air supply
Bottom line
Use natural gas water heater if you have natural gas service. Use propane if natural gas isn\'t available AND you have established propane infrastructure. For most no-natural-gas properties, switching to electric heat pump water heater (with IRA $2,000 credit) beats continuing with propane on operating cost. Hardware is largely identical between NG and LP; conversion kits available on most major brands.