Water Heater Fuel Type Comparison
Updated February 20, 2026
Key Takeaway
Fuel type determines operating cost, installation requirements, recovery rate, and features. Gas is traditional for fast recovery. Electric is simpler. Heat pump is most efficient. Propane serves homes without gas service.
Overview
Fuel type determines operating cost, installation requirements, recovery rate, and features. Gas is traditional for fast recovery. Electric is simpler. Heat pump is most efficient. Propane serves homes without gas service.
What to Know
Comparison
| Gas tank: $400-1200, fast recovery, requires venting |
| Gas tankless: $1000-2000, endless hot water, special venting |
| Standard electric: $300-800, simplest install, slower recovery |
| Heat pump: $1200-2500, most efficient, tax credits, needs air space |
| Propane: same as gas but 20-40% higher fuel cost |
Buying Tips
- Gas tank or tankless is most cost-effective where gas is available.
- Heat pump is worth the premium -- pays back in 3-5 years.
- Stick with current fuel type unless compelling reason to switch.
- Propane tankless is excellent for rural homes.
Common Mistakes
- Switching gas to standard electric to save purchase price -- operating cost erases savings.
- Standard electric over heat pump when you have the space.
- Not accounting for venting costs when comparing gas to electric.
- Assuming propane costs the same as natural gas.
Bottom Line
Gas where available for best value. Heat pump for highest efficiency. Standard electric for simplicity. Propane for rural. Factor in installation, operating cost, and incentives.