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Water Heater Cost Calculator
Compare what a gas tank, a tankless, a condensing tankless, an electric tank and a heat pump water heater would cost to install and to run in your home. It uses the US Department of Energy’s installed costs and efficiency ratings, your state’s energy prices, and shows which one pays back and which costs least over its life. There is no federal tax credit, because 25C ended after 2025.
What it calculates. For a US home replacing its water heater, the installed cost, the yearly energy cost, payback against a like-for-like replacement, the cost per year of life and the carbon of five options: a standard gas tank, a non-condensing gas tankless, a condensing gas tankless, a standard electric tank and a heat pump (hybrid) water heater.
Hot water. Every option heats the same water: 38, 55 or 84 gallons a day from 58°F to 125°F. These are the daily volumes and temperatures of the federal test behind every efficiency label (10 CFR 430, appendix E). Typical use is 55 gallons. You can enter your own daily volume under More options.
Efficiency. Energy used = heat needed ÷ the water heater’s uniform energy factor (UEF). The defaults are the efficiency levels the Department of Energy analysed in its 2024 rules: gas tank 0.58, tankless 0.81, condensing tankless 0.87, electric tank 0.92 and heat pump 3.35 at typical use.
Installed cost. DOE’s national average for each type: equipment, labor, permits and removal of the old unit, from the technical support documents for its April 2024 and December 2024 final rules, restated to August 2026 dollars with the consumer price index.
Prices. Electricity: each state’s January–July 2026 average (EIA). Natural gas: each state’s 2025 annual residential price (EIA; 2024 where EIA withholds 2025). Propane: the average of EIA’s weekly survey prices over the 2025–26 heating season; the US average where EIA has no state figure.
Payback, life and carbon. Payback = extra installed cost over a like-for-like replacement ÷ yearly saving. Cost per year of life = installed cost ÷ DOE’s average lifetime (14.4 years for a gas tank, 15.1 for an electric or heat pump tank, 20 for tankless) + yearly running cost. Carbon: gas or propane burned × the EPA emission factor, or electricity × your state’s EPA eGRID factor.
What it leaves out. Your incoming water temperature (colder in the North in winter), a heat pump water heater’s effect on room heating and cooling, gas-line and venting upgrades when switching from a tank to tankless, maintenance, and price changes over time.
More options: prices, hot water, rebates
Installed cost, yearly running cost, payback and life of a gas tank, tankless, condensing tankless, electric tank and heat pump water heater for a US home, with the carbon of each. Installed costs, efficiency and lifetimes: US Department of Energy (2024). Prices: EIA. Grid carbon: EPA eGRID. No federal 25C credit after 2025. Reads MasterBrain V3 live.
Pick your state and what you have now
Results compare five water heaters: the installed price, the yearly running cost, payback against a like-for-like replacement, how long each lasts and its carbon.
Results are estimates, not a quote. Every option is compared on the same hot water use, heated from 58°F to 125°F (the federal test conditions); real energy use depends on your incoming water temperature, which is colder in the North in winter, and on how you use hot water. Installed costs are national averages from the US Department of Energy’s 2024 analysis; real quotes vary widely, and switching from a tank to tankless can need gas-line and venting work not included here. Prices are state averages and change. A heat pump water heater cools the space it sits in. The federal 25C credit does not apply to equipment placed in service after 31 December 2025; this is not tax advice. Check every figure against your quotes and bills.
Most people choose a new water heater in a hurry, when the old one fails. The choice matters for the next 15 to 20 years of energy bills. A tankless unit costs more to install and saves less than many quotes suggest. A heat pump water heater costs about the same as a tankless one and, if you heat water with electricity now, saves far more.
This page compares all five common types with the Department of Energy’s own cost and efficiency figures and your state’s energy prices, so you can see the numbers before the installer arrives.
On the Department of Energy’s national averages, in today’s dollars, a new gas tank water heater costs about $1,570 installed, a gas tankless about $2,235 ($2,472 for a condensing model) and a heat pump water heater about $2,164. At typical use, tankless cuts a gas tank’s running cost by $41–$277 a year depending on the state, so it takes 2.4 to 16 years to pay back. A heat pump water heater saves $317–$1,185 a year against an electric tank and pays back in 1 to 3.6 years.
Water heater running cost by state
The table shows the yearly energy cost of a standard gas tank, a non-condensing gas tankless and a heat pump water heater in every state, at typical use (55 gallons a day) and today’s prices. The last column is what a heat pump water heater saves, or costs, against a gas tank each year. States are sorted by that saving. Your state’s electricity and gas prices are in the calculator above; installation is separate: see the next section.
| State | Gas tank | Gas tankless | Heat pump | Heat pump vs gas tank |
|---|---|---|---|---|
| Hawaii | $976 | $699 | $449 | saves $527 |
| Florida | $475 | $340 | $148 | saves $326 |
| Georgia | $380 | $272 | $149 | saves $231 |
| Arkansas | $359 | $257 | $132 | saves $227 |
| Texas | $362 | $259 | $156 | saves $206 |
| Arizona | $346 | $248 | $150 | saves $196 |
| Louisiana | $324 | $232 | $129 | saves $194 |
| Washington | $328 | $235 | $140 | saves $189 |
| Massachusetts | $467 | $334 | $292 | saves $174 |
| Alabama | $327 | $234 | $160 | saves $167 |
| Mississippi | $310 | $222 | $147 | saves $163 |
| Oregon | $311 | $223 | $149 | saves $162 |
| North Carolina | $306 | $219 | $145 | saves $161 |
| South Carolina | $315 | $226 | $154 | saves $160 |
| Virginia | $313 | $224 | $163 | saves $150 |
| Missouri | $278 | $199 | $135 | saves $143 |
| Oklahoma | $268 | $192 | $132 | saves $136 |
| Kansas | $276 | $198 | $147 | saves $128 |
| Kentucky | $265 | $190 | $138 | saves $127 |
| Delaware | $297 | $213 | $173 | saves $124 |
| Rhode Island | $403 | $289 | $283 | saves $120 |
| Nevada | $245 | $175 | $131 | saves $114 |
| West Virginia | $257 | $184 | $150 | saves $107 |
| Vermont | $335 | $240 | $232 | saves $103 |
| Maryland | $301 | $215 | $207 | saves $94 |
| California | $410 | $294 | $322 | saves $88 |
| Nebraska | $212 | $152 | $125 | saves $87 |
| New Hampshire | $347 | $248 | $260 | saves $87 |
| Tennessee | $221 | $158 | $134 | saves $86 |
| Wyoming | $219 | $157 | $135 | saves $83 |
| Ohio | $258 | $185 | $181 | saves $77 |
| Pennsylvania | $280 | $201 | $204 | saves $76 |
| District of Columbia | $311 | $222 | $239 | saves $72 |
| Utah | $190 | $136 | $128 | saves $62 |
| Maine | $353 | $253 | $291 | saves $62 |
| Iowa | $198 | $141 | $138 | saves $60 |
| North Dakota | $177 | $127 | $120 | saves $57 |
| Indiana | $214 | $153 | $165 | saves $49 |
| Minnesota | $204 | $146 | $158 | saves $47 |
| Colorado | $208 | $149 | $162 | saves $46 |
| South Dakota | $184 | $131 | $141 | saves $43 |
| New York | $327 | $234 | $285 | saves $43 |
| Connecticut | $313 | $224 | $271 | saves $42 |
| New Mexico | $183 | $131 | $146 | saves $37 |
| Montana | $167 | $120 | $135 | saves $32 |
| New Jersey | $265 | $190 | $233 | saves $32 |
| Illinois | $210 | $150 | $186 | saves $23 |
| Idaho | $143 | $103 | $126 | saves $18 |
| Wisconsin | $200 | $143 | $184 | saves $16 |
| Michigan | $203 | $146 | $209 | costs $5 more |
| Alaska | $241 | $173 | $263 | costs $21 more |
A heat pump water heater costs less to run than a gas tank in every state except Michigan and Alaska, where gas is cheap and electricity is not. Against an electric tank, which uses about 3,500 kWh a year at typical use, the heat pump water heater’s roughly 970 kWh saves money everywhere.
How much a water heater costs to install in 2026
The Department of Energy estimated the average installed cost of each type of water heater when it set new efficiency standards in 2024. The figures include the equipment, labor, permits and removing the old unit, averaged over replacements, new owners and new homes. In today’s dollars, at typical use:
| Type | Installed cost | Efficiency (UEF) | Average life |
|---|---|---|---|
| Electric tank (standard) | $1,026 | 0.92 | 15.1 years |
| Gas tank (standard) | $1,570 | 0.58 | 14.4 years |
| Heat pump water heater | $2,164 | 3.35 | 15.1 years |
| Gas tankless (non-condensing) | $2,235 | 0.81 | 20 years |
| Gas tankless (condensing) | $2,472 | 0.87 | 20 years |
These are national averages, and real quotes vary widely with your region, the installer and your home. Two costs are often missing from them. Switching from a tank to tankless can need a bigger gas line and new venting. A heat pump water heater needs space and airflow around it, and DOE’s own figure already includes extra work for some installs. Ask for both to be priced separately on any quote.
Is a tankless water heater worth it?
On running cost alone, often not. A tankless water heater wastes less heat than a tank, which keeps its water hot all day, but at typical use the saving is modest: $41 to $277 a year against a gas tank, depending on your state’s gas price. Its extra installed cost of about $665 then takes between 2.4 years (where gas is expensive) and 16 years to pay back.
Tankless units have two other advantages. They do not run out of hot water, and the Department of Energy puts their average life at 20 years against 14.4 for a gas tank, so the higher price is spread over more years. In the Ohio example below, a tankless costs about the same per year of life as a condensing tankless and less than a new gas tank.
Condensing tankless models (UEF around 0.87 to 0.96) recover heat from the exhaust and save a little more, but cost more again. The Department of Energy expects about 70 percent of tankless units sold in 2030 to be condensing.
Electric tankless heaters are a different case. They need a lot of power, about 17 kW (72 amps at 240 volts) for one 2.5 gpm shower heated from 58°F to 105°F, and save little over an electric tank, because DOE says both are already highly efficient. Our guide to electric tankless water heaters sizes one for your home and lists each model’s breaker and panel needs.
Tankless models to compare
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If tankless suits your home, these are widely sold gas models from established makers, as listed on Amazon in October 2026. Specifications are the makers’ own; check the UEF on the EnergyGuide label and enter it in the calculator. Every one needs a licensed installer, and the installed costs above already include labor.
- Max flow 11.1 GPM
- UEF 0.98 (ENERGY STAR certified)
- Max flow 8.4 GPM at a 35°F rise
- UEF 0.93 (maker's figure)
Higher flow serves more showers at once but costs more: Rheem rates its 8.4 GPM model for 3 to 4 showers running together. Heat pump water heaters were not sold on Amazon when we checked, so buy one through a plumber or a home improvement store and compare quotes.
Heat pump water heaters: the biggest saving
A heat pump water heater moves heat from the surrounding air into the water instead of making it, so it uses about a third to a quarter of the electricity of a standard electric tank. At typical use it needs about 970 kWh a year against about 3,530 kWh. That saves $317 to $1,185 a year depending on your electricity price, and pays back the extra installed cost of about $1,140 in 1 to 3.6 years. If you have an electric tank now, a heat pump water heater is almost always the cheapest option over its life.
Against a gas tank, it is cheaper to run in every state except Michigan and Alaska, but the saving is smaller and the payback longer, from about a year in Hawaii to decades where gas is cheapest. Before buying one, check three things: it needs space (DOE counts extra installation work for some homes), it cools the room it sits in (useful in a garage in the South, less so in a heated basement in winter), and its compressor makes some noise, so it suits a space you do not sit in. For heating and cooling the whole home, see the heat pump installation cost calculator.
Whatever heats your water, using less of it saves too. For 16 minutes of showering a day, swapping a standard 2.5 gpm shower head for a 1.75 gpm WaterSense one cuts about 4,380 gallons a year, worth about $44 in water heating with a gas tank or $98 with an electric one at US average prices. Our guide to low-flow shower heads works it out for your state and water heater.
Insulating the hot water pipes helps too: the Department of Energy says it can reduce heat loss, let you lower the water heater setting and save an additional 3% to 4% a year on water heating. Our guide to heat tape and pipe insulation covers which insulation to use, and keeping pipes from freezing.
The federal water heater tax credit has ended
Until the end of 2025 the energy efficient home improvement credit (section 25C) covered 30 percent of a heat pump water heater’s cost, up to $2,000 a year. Public Law 119-21, signed on 4 July 2025, ended it early. In the IRS’s words, “The credit will not be allowed for any property placed in service after December 31, 2025.” A water heater installed in 2026 gets no federal credit. Many states and utilities still offer rebates; enter yours under More options.
How the calculator works
- Hot water heat. Gallons a day × 8.24 lb per gallon × 67°F (58°F in, 125°F out) × 365 days. At typical use that is 11.1 MMBtu a year.
- Energy used. That heat ÷ each water heater’s UEF. Electric options are converted at 293.07 kWh per MMBtu.
- Running cost. Energy × your state’s price: electricity per kWh, natural gas per therm, or propane per gallon.
- Installed cost. DOE’s national average, restated to today’s dollars, minus any heat pump rebate you enter.
- Payback. Extra installed cost over a new unit of the type you have now ÷ the yearly saving.
- Cost per year of life. Installed cost ÷ DOE’s average lifetime + running cost, so options that last longer are compared fairly.
Worked example: an Ohio home
An Ohio home with a gas tank and typical hot water use, at 18.70¢ per kWh and $1.35 per therm:
| Option | Installed | Running cost a year | Payback vs a new gas tank | Cost per year of life | CO₂ a year |
|---|---|---|---|---|---|
| Gas tank (like-for-like) | $1,570 | $258 | — | $367 | 1.01 t |
| Gas tankless | $2,235 | $185 | 9.1 years | $296 | 0.73 t |
| Condensing tankless | $2,472 | $172 | 10.5 years | $296 | 0.68 t |
| Electric tank | $1,026 | $660 | no payback | $728 | 1.71 t |
| Heat pump water heater | $2,164 | $181 | 7.8 years | $325 | 0.47 t |
Both tankless options cost the least per year of life here, because they last about 20 years. The heat pump water heater pays back fastest and cuts carbon the most. An electric tank is cheapest to buy and most expensive to run.
The carbon side
The calculator compares the CO₂ from burning gas or propane (EPA emission factors) with the CO₂ from the electricity each electric option uses on your state’s grid (EPA eGRID). In Ohio, a heat pump water heater emits about 0.47 tonnes of CO₂ a year at typical use, against 1.01 tonnes for a gas tank and 1.71 for an electric tank. The cleaner your grid, the larger the cut. For your whole household’s footprint, try the personal carbon footprint calculator.
Data sources and updates
| Input | Source | Vintage |
|---|---|---|
| Installed cost, efficiency (UEF), lifetime: tanks and heat pump | US DOE, technical support document for consumer water heaters (final rule), Tables 8.2.8 and 3.2.12 | April 2024; 2022 $ |
| Installed cost, efficiency, lifetime: tankless | US DOE, technical support document for gas-fired instantaneous water heaters (final rule), Table 8.2.7 | December 2024; 2023 $ |
| Daily hot water, test temperatures | 10 CFR 430, subpart B, appendix E (uniform test method) | Current |
| Natural gas prices | EIA Natural Gas Navigator, residential | 2025 annual (2024 for six states) |
| Propane prices | EIA State Heating Oil and Propane Program | 2025–26 heating season |
| Electricity prices | EIA Electric Power Monthly, Table 5.6.B | January–July 2026 |
| Dollar restatement | BLS Consumer Price Index (CPI-U) | August 2026 |
| 25C credit | IRS FAQ on Public Law 119-21 | Ended 31 Dec 2025 |
| Carbon | EPA GHG Emission Factors Hub; EPA eGRID | 2025; eGRID2023 |
Every figure is stored in the GreenCalculus MasterBrain with its exact source cell; the calculator reads the live values and shows each one under View calculation detail. Prices are refreshed when EIA publishes new data.
Frequently asked questions
On the Department of Energy’s national averages, a gas tankless water heater costs about $2,235 installed in today’s dollars, and a condensing model about $2,472. That covers the unit, labor, permits and removing the old one. Switching from a tank to tankless can cost more, because it often needs a bigger gas line and new venting.
On running cost alone it saves $41 to $277 a year against a gas tank at typical use, depending on your state’s gas price, so its extra cost of about $665 takes 2.4 to 16 years to pay back. It also gives endless hot water and lasts about 20 years against 14.4 for a gas tank, which makes it competitive per year of life.
About $2,164 installed on the Department of Energy’s national average, in today’s dollars. At typical use it needs about 970 kWh of electricity a year, against about 3,530 kWh for a standard electric tank, which saves $317 to $1,185 a year depending on your state.
In most states, yes. At typical use a heat pump water heater costs less to run than a non-condensing gas tankless in 32 of the 50 states and DC. Where gas is cheap and electricity expensive, such as Michigan, Illinois or New York, gas tankless is cheaper to run.
No. The section 25C credit covered 30% of a heat pump water heater’s cost, up to $2,000, but Public Law 119-21 ended it for equipment placed in service after 31 December 2025. Many states and utilities still offer rebates.
A like-for-like gas tank costs about $1,570 installed on the Department of Energy’s national average, in today’s dollars, and a standard electric tank about $1,026. Real quotes vary with your region, the installer and your home.
The Department of Energy puts the average life at 14.4 years for a gas tank, 15.1 years for an electric tank (including heat pump water heaters) and 20 years for a gas tankless water heater.
Installed costs, efficiency ratings and lifetimes come from the US Department of Energy’s 2024 technical support documents for its water heater standards. Daily hot water volumes and temperatures come from the federal test procedure. Energy prices come from EIA, dollar restatement from the BLS consumer price index, and carbon from EPA emission factors and eGRID.
Methodology notes and limitations
Same hot water for every option. All five are compared at the federal test conditions (58°F in, 125°F out). Your incoming water is colder in the North in winter, which raises every option’s energy use by a similar share.
National installed costs. DOE’s figures are national averages from its 2024 analysis of the market, projected to 2030 and stated in 2022 or 2023 dollars, then restated with CPI. They are not quotes, and gas-line or venting upgrades for a tank-to-tankless switch are not included.
Rated efficiency. UEF is measured in a lab. A heat pump water heater’s real efficiency depends on the air temperature around it, and it slightly cools that space.
Today’s prices. Running costs use current prices with no change over time.
Not financial or tax advice. Check every figure against your quotes, your utility bills and current rebates.