Nearly all U.S. homes have a water heater. About 53% have an electric model while the other 47% have a fuel-burning system. Let’s explore the differences to determine which configuration is better for your home.
The Basics
Traditional water heaters store and heat water in a tank. The main difference between gas and electric systems is how they heat the water. Electric water heaters typically have two sets of thermostats and heating elements: one for the upper tank and one for the lower tank. Electricity heats the element, which directly contacts the water. Gas models have a burner in a chamber below the tank. It generates heat that enters through the bottom of the tank and spreads evenly.
Initial, Operating, and Long-Term Costs
Electric water heaters are simpler in design and therefore typically cost less to purchase and install. Gas water heaters are cheaper to operate because natural gas and liquid propane are significantly less expensive than electricity. The savings are usually high enough to outweigh the added upfront cost. That’s true even though electric models have a slightly longer average lifespan. The savings often aren’t high enough to warrant conversion. That’s why many homeowners who already have an electric water heater will stick with what they have.
High-Efficiency Options
Electric water heaters are nearly 100% efficient, and they operate cleanly. There are heat pump water heaters that transfer heat energy rather than produce it. Those are more expensive up front but can be 300-500% efficient. A standard gas model is around 80% efficient. High-efficiency gas models range from 90-98.5%. That’s possible through modulating gas valves and condensing systems that avoid ventilation heat losses.
Energy Incentives
Rebates, tax credits, and other incentives can be a big deal. They can help homeowners afford a more efficient system and recoup their added investment sooner. Incentives can even be high enough to warrant conversion, for instance, from electric to gas.
Incentives generally require ENERGY STAR certification. As of 2025, the U.S. EPA doesn’t award that certification to electric models. That’s true even of heat pump water heaters, but that may change in the future. It does certify gas models but generally limits certification to high-efficiency water heaters.
Ventilation
Gas water heaters create toxic gases as a byproduct. That requires a ventilation system to exhaust those gases outside the home. This is one reason gas models have higher costs. It’s also why annual maintenance for gas water heaters is not optional. A plumber must inspect the ventilation system, gas line, and any carbon monoxide detectors.
To learn more about the water heaters available for your home in Brighton, CO, call Royal Services Plumbing today or contact us online.