Understanding your result
The headline is the cost per month, with the cost per year and the hot water use in the sub-line. The stats give the cost per day and per year and the energy used per day. The table shows the heater and its UEF, the gallons, the temperature rise, the heat delivered into the water, the energy used, and the cost per day, month, year and over a typical 12-year tank life.
The 12-year row is the one to weigh against the purchase price. A standard electric tank’s energy over its life comes to about $8,000 for the default household; a heat pump water heater’s to about $2,200. The notes show what a heat pump water heater would save over an electric tank and what turning down a hot setting would save.
The gallons per day come from the daily hot water use calculator. The price of the heater itself comes from the replacement cost calculator, and the upgrade payback calculator takes both to give the payback of a more efficient unit. The fuel cost per million BTU calculator compares the fuels in general.
How we calculate this
The UEF is the US Department of Energy’s uniform energy factor from the 2017 test procedure, which measures delivered hot water against energy used over a 24-hour simulated-use test and therefore includes standby losses. The typical values used when you leave the field at zero are 0.65 for gas and propane tanks, 0.93 for condensing gas tankless and electric tanks, and 3.5 for heat pump water heaters. The fuel energy contents are the EIA figures on the fuel energy content and cost page, and the ratings with their federal minimums are on the efficiency ratings table.
The assumptions behind the numbers
| Assumption | Value | Where it comes from |
|---|---|---|
| Hot water per day | 64 gal | A family of four (the DOE high-use draw pattern is 84, medium 55) |
| Groundwater, setting | 55 °F, 120 °F | Typical mid-US; DOE recommended setting |
| UEF by type | Gas and propane tank 0.65; gas tankless 0.93; electric tank 0.93; heat pump 3.5 | Typical values in the DOE and AHRI directories |
| Prices | $1.50 per therm, $2.70 per gallon propane, $0.17 per kWh | EIA residential averages, 2025 |
| Tank life | 12 years | Typical tank water heater life (DOE Energy Saver: 10 to 15 years) |
Assumptions last reviewed October 8, 2026.
The calculator does not model a heat pump water heater’s lower performance in a cold basement or the space heat it takes from the room, a tankless unit’s standby electronics, recirculation pumps, or time-of-use electricity rates that make overnight heating cheaper. The guide to water heater running costs covers these, and the guide to comparing fuels per million BTU puts water heating next to space heating.
Two worked examples
A gas tank for a family of four
64 gallons a day, 55 to 120 °F, gas tank at UEF 0.65, gas at $1.50 per therm.
- Heat into the water: 64 × 8.34 × 65 = 34,694 BTU a day
- Gas used: 34,694 ÷ 0.65 = 53,376 BTU = 0.53 therms
- Cost: $24.34 a month, $0.80 a day, $292 a year, about $3,500 over 12 years
A condensing tankless unit at 0.93 would use 0.37 therms a day for the same water, about $17 a month, a saving of about $7 a month.
Electric tank against heat pump
The same 64 gallons a day at 17 cents per kWh: a standard electric tank at UEF 0.93 against a heat pump water heater at 3.5.
- Electric tank: 34,694 ÷ 0.93 ÷ 3,412 = 10.93 kWh a day, $56.50 a month, $678 a year
- Heat pump: 34,694 ÷ 3.5 ÷ 3,412 = 2.91 kWh a day, $15.01 a month, $180 a year
- Saving: about $498 a year
At that saving, the $800 to $2,500 extra cost of a heat pump water heater pays back in two to five years, and sooner with a rebate. This is one of the clearest energy upgrades available to households that heat water with electricity.
Where to find your inputs
UEF. On the yellow EnergyGuide label or the model’s specification; older labels show EF, which is a little different but close enough for an estimate.
Gallons per day. From the daily hot water use calculator, or 15 to 25 gallons per person as a rough figure.
Groundwater and setting. Measure cold tap water; read the dial on the heater.
Price. All-in price per therm, gallon or kWh from your bills.
Common mistakes
- Comparing by purchase price. Over 12 years the energy costs several times the heater.
- Ignoring standby losses. UEF includes them; old EF ratings and nameplates may not.
- A setting of 140 °F. It uses a quarter more energy than 120 °F for the same gallons.
- Expecting tankless to transform a gas bill. The saving is real but modest.
- A heat pump water heater in a cold room. Below about 40 °F it falls back on its element.
- Forgetting time-of-use rates. Heating water overnight can halve the electric cost.
Questions people ask
- How much does it cost to run a water heater?
- For a family using 64 gallons a day heated from 55 to 120 °F, about $24 a month with a gas tank at 0.65 UEF and $1.50 per therm, about $57 a month with a standard electric tank at 0.93 UEF and 17 cents per kWh, and about $15 a month with a heat pump water heater at a UEF of 3.5. That is $292, $678 and $180 a year respectively. Hot water is typically the second largest energy use in a home after heating and cooling.
- What is UEF on a water heater?
- Uniform energy factor, the US Department of Energy's efficiency rating for water heaters since 2017. It is the energy delivered as hot water divided by the energy consumed over a 24-hour test with a set draw pattern, so it includes standby losses from the tank. Typical values are 0.6 to 0.7 for gas tanks, 0.8 to 0.95 for gas tankless, about 0.92 to 0.95 for electric tanks and 3 to 4 for heat pump water heaters.
- Is a heat pump water heater worth it?
- Usually, if you heat water with electricity. A heat pump water heater uses about a quarter of the electricity of a standard electric tank, which on a family's hot water saves about $500 a year at 17 cents per kWh. It costs more to buy, about $1,500 to $4,000 installed against $700 to $1,500, and often qualifies for rebates, so the payback is typically two to five years. It needs space and a room that stays above about 40 to 50 °F.
- Does turning the water heater down save money?
- Yes. The energy is proportional to the temperature rise, so turning a heater from 140 to 120 °F with 55 °F groundwater cuts the rise from 85 to 65 °F, about 24% less energy for the same gallons, and less standby loss as well. The US Department of Energy recommends 120 °F for most homes, which also reduces scalding risk. Dishwashers heat their own water, so they do not need a hotter tank.
- Is a tankless water heater cheaper to run than a tank?
- Somewhat, for gas. A condensing gas tankless unit at a UEF of about 0.93 uses about 30% less gas than a tank at 0.65 for the same hot water, because it has no tank losing heat all day. For the 64-gallon family that is about $7 a month at 2025 gas prices. The saving rarely pays back the higher installation cost of a tank-to-tankless conversion on its own; long life and endless hot water are the other reasons people choose them.
- How long do water heaters last?
- Tank water heaters typically last 8 to 12 years, longer with soft water and annual flushing; tankless units 15 to 20 years; heat pump water heaters 10 to 15. The calculator's 12-year total is a tank's life, and over that period the energy costs two to five times the price of the heater, which is why the efficiency choice matters more than the purchase price.