What does hot water cost per year?

What the number means

Water heating is one of the largest energy uses in a home, and the fuel and type of heater decide the bill. A heat pump water heater moves heat from the air into the tank, so it can deliver more than three units of heat for each unit of electricity. A standard electric tank turns each unit of electricity into one unit of heat at best. This calculator turns a heater's UEF and your local prices into a yearly running cost, so you can compare a heat pump, an electric tank, a gas heater and a propane heater for the same family.

The method

Heat to the water = gallons per day × 365 × 8.3 Btu per gallon per °F × temperature rise. Energy bought = that heat ÷ UEF. For electricity the units are kWh (3,412 Btu each), for natural gas therms (100,000 Btu each), for propane gallons (91,452 Btu each, EIA). Cost = units × your price. Gas priced per ccf (100 cubic feet) is converted at the EIA's 1,036 Btu per cubic foot, 1.036 therms. This is the same arithmetic the DOE uses in its comparison tables, with the UEF carrying the information about the heater: tank losses, burner efficiency and the heat pump's coefficient of performance.

Worked example

A family uses 55 gallons a day (the DOE's medium pattern), heating water from 58 to 125 °F. The heat delivered to the water is 55 × 365 × 8.3 × 67 = 11,163,708 Btu, or 11.16 million Btu a year. With a heat pump of UEF 3.3 that takes 991 kWh, which at 16 cents is $159. A standard electric tank with UEF 0.95 takes 3,444 kWh and costs $551. A gas heater with an example UEF of 0.65 at $1.50 a therm uses 172 therms and costs $258; a propane heater of the same UEF at $3 a gallon uses 188 gallons and costs $563. Check against the DOE: with its 9.9 cents per kWh, the calculator gives $82 and $341 for UEF 3.93 and 0.95, where the DOE table has $82 and $340.

Limits of this method

UEF comes from a laboratory test. The test uses a fixed pattern of draws and fixed temperatures; your house has long pipes, a recirculation pump perhaps, and water that enters colder in winter. A heat pump heater cools its room. It also depends on the air around it; in a cold space some units fall back on electric resistance, and the UEF no longer applies. In a heated home, the cooling effect adds to the heating load in winter. Prices change with use. A time-of-use electricity rate, a gas tariff with a fixed monthly charge, and a propane delivery minimum can all change the real cost. The result does not include purchase price, installation, venting or incentives, which are often the deciding factors.

Common mistakes

Using the "first hour rating" or tank size in place of hot water use; comparing a heat pump's UEF with a gas heater's on different bases (all UEFs here are on the same DOE test basis, which is what makes them comparable); entering a gas price per hundred cubic feet as a price per therm; and forgetting that the price must be your total price per unit, including delivery charges and taxes, on the bill.

Questions

How much does it cost to run a heat pump water heater?

The DOE's Federal Energy Management Program table, which assumes 20,075 gallons of hot water a year (55 a day) and 9.9 cents per kWh, shows 826 kWh and $82 a year for the best available heat pump model (UEF 3.93), 984 kWh and $97 for an ENERGY STAR model (UEF 3.3), and 3,437 kWh and $340 for a less efficient electric tank (UEF 0.95). The calculator reproduces those figures within 1 percent (833 kWh and $82 for the best model, 3,444 kWh and $341 for the tank), then lets you use your own prices.

What is UEF?

Uniform Energy Factor is the DOE's measure of a water heater's overall efficiency, defined in the test procedure in Appendix E to Subpart B of 10 CFR Part 430. It is measured over a 24-hour test with a set pattern of hot water draws, so a higher UEF means less energy for the same hot water. It is printed on the EnergyGuide label. A heat pump unit can have a UEF above 3 because it moves heat from the surrounding air instead of making all of it from electricity; a standard electric tank is below 1.

How many gallons of hot water does a household use?

The DOE test uses four daily draw patterns: very small, 10 gallons; low, 38; medium, 55; and high, 84 gallons. Roughly, higher use fits larger households. Your own use may differ, so use the figure that fits your family. A meter reading is better: if you know your hot water use in gallons, enter it directly.

How do I compare gas and electric heaters?

Convert both to the same job: heating the same hot water. The energy that ends up in the water is the same for any heater (8.3 Btu per gallon per degree Fahrenheit); the heater's UEF decides how much fuel that takes. The calculator divides by 3,412 Btu per kWh for electricity, 100,000 Btu per therm for natural gas and 91,452 Btu per gallon for propane (EIA). One hundred cubic feet of gas (a ccf) is about 1.036 therms at the EIA's 1,036 Btu per cubic foot.

Is a heat pump water heater worth it?

Look at the gap in yearly running cost and set it against the extra price. At 16 cents per kWh, 55 gallons a day, UEF 3.3 against 0.95, the running cost is $159 against $551, a difference of $392 a year. The DOE FEMP page lists lifetime savings of about $2,500 for an ENERGY STAR heat pump under its assumptions. Rebates and tax credits change the purchase cost; check current ones for your state and utility, and they are not included here.

Does a heat pump water heater work in a cold basement?

It takes heat from the air around it, so it cools that room slightly and works best in a space that stays mild. Some models fall back on resistance heating when the room is too cold, which raises the running cost. The manufacturer's installation manual gives the room volume and temperature range; use the lower UEF-based savings if your unit will often run in resistance mode.

Why are my gas and propane results estimates only?

UEF is measured in a laboratory pattern, not in your house. Your incoming water temperature changes through the year (the test uses 58 °F in, 125 °F out), your use is irregular, and long pipe runs and recirculation pumps add loss. The result is a way to compare heaters under the same assumptions, not a prediction of your bill.

Sources: U.S. Department of Energy, 10 CFR Part 430 Subpart B Appendix E (Uniform Energy Factor; draw patterns of 10, 38, 55 and 84 gallons a day; 58 °F supply and 125 °F delivery water); DOE Federal Energy Management Program, "Purchasing Energy-Efficient Residential Water Heaters" (UEF 3.93, 3.3 and 0.95 comparison, 20,075 gallons a year, 9.9 cents per kWh); U.S. Energy Information Administration, Units and Calculators, Btu conversion factors (1 kWh = 3,412 Btu, 1 cubic foot of natural gas = 1,036 Btu, 1 gallon of propane = 91,452 Btu). Read October 27, 2026. Sizing a tank: water heater size calculator; whole-house heating by fuel: heating cost calculator; cooling and heat pump ratings: SEER calculator; power prices: electricity cost calculator. How we check our calculators.