spec my houseWhat does it cost to run?Cost to run

Calculators / Water heaters

Is a heat pump water heater worth it?

Pick your state, or put in your own rates, and how much hot water you use. You get the yearly running cost of all four kinds side by side, and how fast a heat pump pays back.

Updated · How we check our numbers

These are example numbers. Put in yours.

Your prices

Your state's average home electricity (EIA, year to date through August 2026) and gas (EIA, 2025) prices. Or put in yours.

Your hot water

Hot water a day
°F

Look up your ZIP above. The federal test uses 58°F.

°F

120°F is typical.

$

Optional: heat pump price minus standard tank, after rebates. Gives the payback.

Cheapest to run: heat pump (hybrid electric)

$141 a year for a heat pump

At US average prices, a heat pump water heater costs about $141 a year to run against $594 for a standard electric tank: $453 a year less.

Heat pump
$141/yr
Standard electric
$594/yr
Saves
$453/yr
Gas tank
$237/yr

Estimate for planning only, not professional advice. Check the manufacturer’s instructions, your local code and a licensed professional before you buy, build or install. Use at your own risk. Terms.

Can your panel take it?Breaker, wire and spare capacity for an electric water heater

What size do you need?First-hour rating or tankless gpm

heat into the water = 365 × 55 gal × 8.24 lb × (120 − 58)°F = 10,256 thousand Btu a year

Heat pump (hybrid electric): ÷ UEF 3.88 ÷ 3,412 = 775 kWh × 18.19¢ = $141

Gas tankless: ÷ UEF 0.95 ÷ 100,000 = 108 therms × $1.48 = $160

Gas tank: ÷ UEF 0.64 ÷ 100,000 = 160 therms × $1.48 = $237

Standard electric tank: ÷ UEF 0.92 ÷ 3,412 = 3,267 kWh × 18.19¢ = $594

All four, a year

18.19¢/kWh, $1.48/therm
  • Heat pump (hybrid electric)UEF 3.88 (Rheem ProTerra 50); 775 kWh a year
    $141/yr
  • Gas tanklessUEF 0.95 (Navien NPE-240A2); 108 therms a year
    $160/yr
  • Gas tankUEF 0.64 (A.O. Smith GCR-40); 160 therms a year
    $237/yr
  • Standard electric tankUEF 0.92 (Rheem XE50, A.O. Smith ENT-50); 3,267 kWh a year
    $594/yr
Where a heat pump sits

A heat pump water heater pulls heat from the air around it. In a cold garage or basement in winter it works harder and falls back on its electric elements, so it saves less than the label says. ENERGY STAR wants a space that stays 40 to 90°F.

Tank setting

Every 10°F you turn the tank down cuts heat into the water by about 16% here. 120°F is the usual setting.

An estimate

UEF is measured with the federal test's daily draw and a 67°F rise. Real use varies with showers, laundry and where the tank sits; your bill is the final word.

Tax credit

The federal 25C credit for heat pump water heaters ended for ones installed after December 31, 2025. Many utilities still offer rebates.

How we work it out

We use the same formula the federal test uses for the yearly energy on the yellow EnergyGuide label. It heats a set amount of water a day: 38, 55 or 84 gallons on its low, medium and high use days.

heat a year (Btu) = 365 × gallons a day × 8.24 lb per gallon × (tank setting − incoming water °F)

The federal test assumes a 67°F rise, from 58°F to 125°F. We use your own: your tank setting minus your area's average incoming water, from NREL's formula on NOAA temperature normals. Then each heater's Uniform Energy Factor (UEF), the efficiency on its label, turns heat into energy:

kWh = Btu ÷ UEF ÷ 3,412    therms = Btu ÷ UEF ÷ 100,000

UEFs come from maker spec sheets: 3.88 for a heat pump (Rheem ProTerra 50), 0.92 for a standard electric tank, 0.64 for a gas tank and 0.95 for a condensing gas tankless unit. A heat pump moves heat out of the air instead of making it, which is how it gets past 1.

Prices are EIA state averages for homes: electricity year to date through August 2026, natural gas for 2025 (yearly, because summer gas prices per unit run high when fixed charges are spread over little gas).

payback (years) = extra cost of the heat pump ÷ yearly saving over a standard electric tank

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