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Enter your current water heater details and local utility rates to see your exact annual cost — then compare what you'd save by upgrading to a modern efficient unit.
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Water Heater Energy Costs — Common Questions
How much does it cost to run a water heater per year?
A standard 50-gallon gas tank (UEF 0.60) costs $280–$380/year at average US rates. A 50-gallon electric tank (UEF 0.90) costs $550–$650/year. A heat pump water heater (UEF 3.5) costs only $160–$220/year — saving up to $430 annually vs. a standard electric tank.
What is UEF and how is it different from EF?
UEF (Uniform Energy Factor) replaced the older EF (Energy Factor) rating in 2017. UEF is more accurate because it accounts for standby heat loss, cycling losses, and recovery efficiency under standardized test conditions. If your unit has an EF rating, it will be slightly lower than an equivalent modern UEF — roughly EF × 0.92 ≈ UEF for electric tanks.
Is it cheaper to run a gas or electric water heater?
At national average rates (gas $1.20/therm, electric $0.16/kWh), a gas tank costs roughly half as much to run annually as a standard electric tank. However, a heat pump electric water heater costs 30–40% less to run than a gas tank, because it moves heat rather than generating it.
How long does a water heater take to pay for itself?
Payback period depends on the price difference between old and new units, and the annual savings. A heat pump water heater typically pays back in 3–5 years vs. a standard electric tank replacement. Federal tax credits (30%, up to $2,000 through 2032) cut that to 2–4 years.