Propane Vs. Electric Water Heater Operation Costs

Figuring out the yearly operating expense of a water heater involves consideration of the heater’s efficiency and the expense of the fuel needed to conduct it. When you attempt to compare two water heaters that use different fuel resources, the mathematics gets tricky in a hurry. When you throw at the escalating cost of gas, a direct contrast involving a propane water heater and an electric one becomes even more challenging to sort out.

Energy Factor

A water heater Energy Factor is a measure you can use to directly compare 1 heater’s energy efficiency with another’s — the higher the Energy Variable amount, the more efficient the heater — and a heater’s Energy Factor score is a substantial index of the unit’s relative general operating cost. The amount, which is derived from an evaluation specified by the Department of Energy, takes into consideration heat losses inside the heater and its own piping, as well as the heater’s ability to transport heat to the water in its tank. Propane water heaters normally have Energy Factors between.5 and .65, while electrical heaters have Energy Factors around.9. The Energy Factor doesn’t take into consideration the cost of fuel or electricity, so although it is a fantastic first step in determining a heater’s operating cost, it can’t be used alone to compare the operating cost of gas and electrical heaters.

Recovery Efficiency

Recovery efficiency, which is accounted for in the Energy Factor, measures the heater’s capacity to heat water quickly. Propane water heaters generally offer higher recovery efficacy than electric water heaters. That usually means that a propane heater should save less warm water in order to keep up with demand, which means you might require a bigger tank than you’d with an electrical heater. A bigger tank means less energy dedicated to keeping a huge volume of water warm, which translates into reduced operating costs.

Fuel and Energy Cost

Traditionally, the cost of running a propane water heater has compared favorably to the cost of an electrical heater despite the electrical heater’s higher Energy Factor, thanks to the comparatively large cost of electricity. At the time of publication, gas shortages have driven up the expense of the gas, making a propane heater substantially more expensive to operate than it has been previously. As of early February 2014, the national average cost of home improvement was $3.89 per gallon.


To calculate the yearly operating cost of a propane water heater, you need to split 41,045 by the heater Energy Factor and multiply the result by 365, and the fuel cost a British thermal unit. For a heater with an Energy Factor of.6 and a propane cost of $3.89 per gallon, or $.00004251 per Btu, that works out to $1,061 per year. The calculation to get an electrical heater is similar, except you replace 41,045 with 12.03 and the gas cost with the cost of electricity per kilowatt/hour. An electrical heater with an Energy Factor of.9 and a power cost of $.12 kWh could have an yearly operating cost of $585.

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