When the water heater in your home is a great one, everyone is happy. The hot water comes on right away, and it lasts throughout a whole shower — or even two or three. It costs a reasonable amount each month, and it gives your family the peace of mind of knowing that it is energy-efficient and beneficial for the planet. Water heating accounts for 18% of the average U.S. household’s annual utility bill, so choosing the right water heater for your budget and needs is essential.

Two common options are propane water heaters and electric water heaters. Current estimates reveal that 4.6 million American households use propane for their water heating needs, and because propane is efficient, economical and reliable, it’s easy to see why. Electric water heaters are more common, though, serving approximately 40 million homes nationwide.

How should you choose between a propane water heater and an electric water heater? Which is more energy-efficient, and which will be easier on your wallet? This guide will help you learn more.

Propane Water Heaters Are More Efficient

Are Electric or Propane Water Heaters More Efficient?

According to the Propane Energy and Research Council (PERC), a standard propane water heater with a tank performs more efficiently than a standard electric water heater with a tank. PERC reports that an ENERGY STAR storage tank propane water heater can save a household 13 to 16% on heating costs over a year. In a 2,400-square-foot home, an electric water heater would cost the homeowner about $645 a year, whereas a propane heater would cost only $290 a year. That adds up to annual savings of about $355 a year.*

A tank propane water heater also produces 46% fewer greenhouse gas emissions. A propane tankless water heater sends about 70% fewer emissions into the atmosphere.

Propane is also vastly more efficient, so propane water heaters can be more compact — a typical 40-gallon storage tank propane water heater provides the same amount of hot water as a standard 50-gallon electric storage tank water heater.

A propane water heater is also more efficient in the practical sense that it supplies hot water immediately, and you won’t run out mid-use. Have you ever had to wait several minutes for your tap water to get hot so you could wash your hands or your dishes? Or have you ever had your hot shower gradually grow colder and colder until you were standing in what felt like icy rain? These are problems associated with electric water heaters. A propane water heater, by contrast, delivers a consistent level of heat at all times, so you’ll have reliable hot water whenever you need it.

What Are the Costs of Propane and Electric Water Heaters?

Upfront, Initial Expenses for Both Systems

A tanked propane water heater cost is slightly higher than a standard tanked electric water heater. The upfront cost of a standard tanked electric water heater is likely to cost approximately $500, whereas a standard tanked propane water heater may cost you around $700. For both electric and propane “tanked” models, when you increase efficiency and quality, the cost follows suit. High efficiency propane and electric tanked units can run you up to $1500. Tankless propane water heaters are extremely efficient because they avoid the standby heat loss that is inevitable when hot water sits in the tanked model. A standard tankless propane water heater for an average size family will cost approximately $1400 for the unit and the cost is reasonable for a standard install.

Which Saves Money in the Long Run?

The upfront cost of the water heater is essential to consider, but it’s only part of the story. The price of fuel and your home’s level of energy use also contribute to your overall costs.

Over time, a propane water heater is likely to save your household money because it is more efficient. Though it’s true that the initial installation will probably cost a bit more, the substantial annual cost savings associated with a propane water heater quickly add up. Your monthly bills generally end up affecting your budget more than the one-time purchase and installation price of a water heater. So in a few years, your propane heater will have paid for itself in reduced monthly bills.

That being said, if your electric water heater still has several years of life left in it, it is probably more cost-effective to wait to replace your old water heater with a propane water heater. Even though propane water heaters are more cost-effective in the long run, the difference is not substantial enough that you should throw away years of production from the water heater you already have. A standard water heater lasts for about 10 years, so if yours is only a few years old, the smartest thing is probably to wait a while before replacing it.

The price of a water heater is important, and it should play a role in your decision — but other factors are likely to be even more influential. The operating costs, efficiency and performance of your water heater should also factor into your decision, and overall, propane water heaters are more advantageous in those areas.

What Kind of Power Does Your House Have Currently?

It’s possible that you already use propane in your home for heating or to power your kitchen appliances, or even as your entire power supply. In that case, switching to a propane water heater is an easy and intuitive choice. You’re already getting propane supplied to your home, so it’s merely a matter of choosing and installing your propane water heater and adding a bit more to your propane deliveries.

If your home already uses electric power, though, it may be simpler for you to stick with an electric water heater, at least until your old heater is ready to be retired. If your home has electricity and natural gas, switching to a propane water heater may be a little easier. If your home operates entirely on electric power, as one out of every four American homes does, keeping an electric water heater is likely the easiest route — unless your home already uses propane for another function such as cooking.

contact us for all your propane needs

Contact Foster Fuels for All Your Propane Needs

When you’re thinking about switching to a propane water heater, trust Foster Fuels for assistance and advice. Our reliable propane heating and home fuel delivery will keep your home supplied with plentiful hot water that will last for shower after shower and load after load of dishes. Count on our three generations of industry knowledge to help you supply the best in hot water for your home with a quality propane water heater.

Contact us today to learn more.

*These prices were made according to PERC. Prices are subject to change at any time and a lot of factors go into pricing (i.e. location, market prices, how many people live in your home, etc.). These prices were given for the sake of examples.