How Much Does It Really Cost to Operate a Water Heater?
The master tradesman at Austin Plumbing, Heating, Air & Electric did the math, and we’re here to give you a trustworthy, side-by-side comparison of the most popular water heaters: tank vs. tankless and gas vs. electric. This guide breaks down exactly how much each water heater costs per hour of operation, how long you can shower without running out of hot water, and what it costs to keep each type running over an 8-year span. Go here if your looking for the cost to install a water heater.
If you’ve ever wondered about the real cost of running your water heater, we’ve got you covered with transparent, data-backed answers.
Why Understanding Water Heater Operating Costs Saves You Money
Choosing the right water heater can save you thousands of dollars over its lifespan. With so many options—electric, gas, tankless, and tank-style—it’s crucial to understand the long-term operating costs. Here, we’ll cover energy usage, maintenance, and repair expenses, so you can make an informed decision.
Gas vs. Electric Water Heaters: A True Cost Comparison
Below is a side-by-side comparison that highlights the key operating costs of gas, electric, and tankless water heaters. You’ll see cost per hour of operation, maximum shower time, and the total 8-year cost of ownership.
| Water Heater | Cost per Hour of Operation | Maximum Shower Duration | 8-Year Energy Cost | 8-Year Repair Cost | Total 8-Year Cost |
| 50-Gallon Electric | $2.69 | 23 minutes | $3,912.80 | $600 | $4,512.80 |
| 50-Gallon Electric (160°F with Mixing Valve) | $1.71 | 38 minutes | $3,130.24 | $600 | $3,730.24 |
| 40-Gallon Gas | $1.18 | 21.9 minutes | $1,722.80 | $350 | $2,072.80 |
| 50-Gallon Gas | $1.18 | 29.9 minutes | $1,722.80 | $350 | $2,072.80 |
| 50-Gallon Gas (160°F with Mixing Valve) | $0.75 | 48 minutes | $1,378.24 | $350 | $1,728.24 |
| 75-Gallon Gas | $1.18 | 45 minutes | $1,722.80 | $400 | $2,122.80 |
| 200k BTU Tankless | $1.03 | Unlimited | $1,518.40 | $0 | $1,518.40 |
* Based on We Energies energy rates in Wisconsin, a 2.5 GPM showerhead, and a shower temperature of 105°F, typical for most homes.
How Much Does it Cost Per Hour to Run a Water Heater?
- Electric water heaters are more expensive to operate than gas heaters due to higher electricity rates. A 50-gallon electric heater costs $2.69/hour, while a 50-gallon gas heater costs only $1.18/hour.
- Mixing valves can help reduce the cost per hour by increasing the efficiency of hot water use, extending available hot water by mixing hotter water at 160°F with cooler water to achieve 120°F.
How Long Can You Shower Before Running Out of Hot Water?
- For those who enjoy long showers, a 50-gallon electric water heater offers 23 minutes of continuous hot water, while a 50-gallon gas heater with a mixing valve can provide up to 48 minutes of hot water.
- 200k BTU tankless water heaters offer unlimited hot water, making them a perfect option for homes with higher hot water demands.
What Are the Long-Term Costs of Water Heaters Over 8 Years?
When factoring in both energy costs and repairs, here’s what you can expect over 8 years:
- Electric Heaters: Higher energy costs contribute to an 8-year cost of $4,512.80 for a 50-gallon electric heater.
- Gas Heaters: Thanks to lower natural gas prices, a 50-gallon gas heater costs $2,072.80 over 8 years.
- 200k BTU Tankless Heaters: With zero repair costs and lower energy usage, tankless heaters will cost you only $1,518.40 over the same period.
Choose the Best Water Heater for Your Home
Here’s a quick summary to help you decide:
- If you need unlimited hot water and long-term savings, a 200k BTU tankless system is your best bet.
- Looking for a cost-effective upfront option? A gas tank heater offers lower operating costs than electric heaters.
- If your home uses electricity exclusively, be prepared for higher running costs over time.
Make the Smart Choice and Start Saving on Energy Costs
At Austin Plumbing, Heating, Air & Electric, we’re committed to helping you make informed decisions about your home’s water heater. By understanding the true operating costs, you can select the option that fits your budget and lifestyle.
Contact Us for a Water Heater Consultation Today!
Ready to make the switch and start saving? Whether you need a new water heater installation or a system upgrade, we’re here to help you find the right solution. Call us today at (262) 367-3808 or Book Online to schedule a vist with one of our experts!
The Master Tradesman Shows His Math:
At Austin Plumbing, Heating, Air & Electric, we take pride in providing accurate, data-backed information to help you make informed decisions about your home’s water heater. Below is the detailed math and assumptions behind the cost comparisons presented in this blog. This section offers full transparency into how we calculated the hourly operating costs, maximum shower durations, and the 8-year cost of ownership for each water heater.
Energy Rates Assumed:
- Electricity: $0.17 per kWh (based on current rates from We Energies in Wisconsin).
- Natural Gas: $1.50 per Therm (based on current natural gas rates from We Energies in Wisconsin).
Hot Water Usage Assumptions:
- Shower Temperature: 105°F (this is the average shower temperature most people prefer).
- Incoming Water Temperature: 50°F (based on the groundwater temperature in Wisconsin).
- Flow Rate: 2.5 GPM (gallons per minute) for a standard showerhead.
- Daily Hot Water Usage: Assumed to be 30 minutes of hot water usage per day.
Formulas Used in Calculations:
- Hourly Cost of Electric Water Heater: The formula for calculating the hourly cost of an electric water heater is:Power Output (in kW) × Cost per kWh ÷ Efficiency.
For example, a 50-gallon electric heater typically has a 4,500-watt heating element (4.5 kW), and the efficiency is assumed to be 90%.
Hourly Cost = (4.5 kW × $0.17 per kWh) ÷ 0.90 = $0.85 per hour of use.
Multiply this by the hours of usage (daily or annually) to get the total operating cost.
- Hourly Cost of Gas Water Heater: The formula for calculating the hourly cost of a gas water heater is:BTU Output × Cost per Therm ÷ 100,000 BTUs per Therm × 1 ÷ Efficiency.
For a 40-gallon gas heater, with an output of 40,000 BTUs/hour and 80% efficiency:
Hourly Cost = (40,000 BTUs × $1.50 per Therm) ÷ 100,000 ÷ 0.80 = $0.75 per hour of use.
- Cost Per Shower (with Mixing Valve): A mixing valve increases the temperature of stored water to 160°F, then mixes it down to 120°F. This creates more usable hot water and reduces the cost per minute of operation.The mixing ratio is calculated as:
(160°F – 50°F) ÷ (120°F – 50°F) = 1.57.
This means that for every gallon of 160°F water, you get 1.57 gallons of 120°F water. The cost per minute is reduced accordingly, and the shower time increases.
- Shower Duration (in minutes):
- Electric 50-gallon Water Heater: Shower Duration = Total Gallons of Hot Water ÷ Flow Rate = 50 gallons ÷ 2.5 GPM = 20 minutes.However, since only a portion of the water comes from the hot water tank (mixed with cold), the actual shower duration extends to approximately 23 minutes.
- Gas 50-gallon with Mixing Valve: With the mixing valve, the 50-gallon tank provides 1.57 times more water at the usable temperature, resulting in a shower duration of 48 minutes.
8-Year Cost of Ownership:
To calculate the 8-year cost of ownership, we factored in the following:
- Annual Energy Cost: Annual Energy Cost = Hourly Cost × Hours of Usage per Day × 365 days.For example, a 50-gallon electric water heater running for 30 minutes daily:
Annual Energy Cost = $0.85 per hour × 0.5 hours/day × 365 = $154.85 per year.
Multiply by 8 years for the total:
$154.85 per year × 8 = $1,238.80.
Repeat for each type of heater based on its hourly energy cost.
- Repair Costs: Assumed repair costs for electric water heaters over 8 years are $600, and for gas water heaters, $350. Tankless systems benefit from parts warranties, resulting in $0 repair costs over 8 years.
At Austin Plumbing, Heating, Air & Electric, We Build Trust
We understand that homeowners want real answers, not inflated data or vague estimates. That’s why, at Austin Plumbing, Heating, Air & Electric, we’re committed to transparency and accuracy in everything we do. Whether it’s breaking down water heater costs or delivering high-quality service, we rely on hard facts and real-world data to guide our recommendations.
Our master tradesperson put together this in-depth analysis using reliable calculations based on real energy costs and operating efficiencies. We don’t believe in BS data or marketing fluff—we want you to have the confidence that comes from knowing exactly what your water heater will cost to run, and what’s the best fit for your home.
By providing clear, fact-based information, we aim to build lasting relationships with our clients. When you choose Austin Plumbing, Heating, Air & Electric, you’re not just getting top-notch service—you’re getting honesty and a team that values integrity.
