Water Heater Running Cost Calculator
Calculate the daily, monthly and annual running cost of your water heater. Supports electric tank, heat pump, gas and tankless systems. Enter your daily hot water usage and energy price to see a full cost breakdown.
Quick Start
Tip: Tank size does not drive running cost directly. Daily hot water usage and the temperature rise are the two main factors. A heat pump water heater typically costs 60–70% less to run than an electric resistance tank.
Project
Water Heater Settings
Common questions
How much does a water heater cost to run per year? +
A typical household using 150 litres per day, heating from 15 °C to 55 °C (ΔT = 40 °C) with an electric tank at 95% efficiency, uses about 7.33 kWh per day — around 2 676 kWh per year. At $0.28/kWh that is roughly $749/year. A heat pump water heater at COP 3.0 would use about 2.33 kWh per day for the same hot water demand, bringing annual cost down to around $238.
Is a heat pump water heater cheaper to run than electric? +
Yes, significantly. A heat pump water heater with COP 3.0 uses one-third of the electricity of a standard electric resistance element for the same amount of hot water. In most climates the running cost saving pays back the higher purchase price within 2 to 5 years.
Is gas cheaper than electric for water heating? +
In most countries, gas costs less per kWh than electricity, which makes a gas water heater cheaper to run than a standard electric resistance model. However, a heat pump water heater often beats gas on running cost because it delivers 2.5 to 3.5 units of heat per unit of electricity. The answer depends on your local gas and electricity prices.
Does tank size affect running costs? +
Tank size affects standing heat loss but not the energy needed to heat your daily hot water demand. The main driver of running cost is how much hot water you use each day and the temperature rise required. A larger tank does lose slightly more heat through the walls when standing idle, but this is small compared to actual hot water demand.
Water heater running costs — what drives them and how to reduce them
What determines water heater running costs?
The energy needed to heat water follows a simple formula: daily kWh = daily litres × 0.001163 × temperature rise / efficiency. The constant 0.001163 is the energy in kWh needed to heat one litre of water by one degree Celsius. This means three variables drive your cost: how much hot water you use each day, the difference between cold inlet temperature and target temperature, and how efficiently your heater converts energy into heat.
Electric resistance vs heat pump water heaters
A standard electric resistance tank converts electricity to heat at roughly 95–98% efficiency — close to 1:1. A heat pump water heater moves heat from the surrounding air rather than generating it, achieving a COP of 2.5 to 3.5. At COP 3.0, you get three units of heat for each unit of electricity. For a household using 150 litres per day at $0.28/kWh, the difference is roughly $750/year for electric resistance versus $250/year for a heat pump water heater.
Gas water heaters
Gas water heaters use the same heat demand formula, but the energy input is gas rather than electricity. Modern condensing gas water heaters achieve 90–95% efficiency. Whether gas or a heat pump water heater is cheaper to run depends entirely on the ratio of gas to electricity prices in your area. In countries where electricity is two to three times more expensive per kWh than gas, a heat pump water heater with COP 3.0 roughly breaks even with gas on running costs.
Tankless water heaters
Tankless (on-demand) heaters eliminate standing losses by only heating water when needed. They use the same energy formula based on daily litres used, but with no heat loss from a stored tank. They work best for households with predictable, concentrated hot water use. Flow rate and daily minutes of use can be used to calculate daily litres if you do not know your consumption directly.
For a broader comparison of heating system costs, see the Boiler vs Heat Pump Calculator or the Home Energy Savings Calculator.