The short answer
For a household of four at U.S. average prices, hot water costs about $200.45 a year with a heat pump water heater, $328.47 with a gas tank, $227.09 with a gas tankless heater and $719.01 with an electric tank. Cold water and prices change it a lot: an electric tank costs about $794.50 a year in Minnesota and $445.13 in Florida.
The same household in every state
Four people at 120°F, at each state's cold-water temperature, electricity rate (August 2026) and gas price (2025).
| Alabama | $614.23 | $356.32 | $171.24 | 16.33¢ |
|---|---|---|---|---|
| Alaska | $1,533.17 | $365.27 | $427.43 | 29.41¢ |
| Arizona | $407.18 | $271.47 | $113.52 | 15.05¢ |
| Arkansas | $512.06 | $371.52 | $142.76 | 14.37¢ |
| California | $1,040.47 | $415.61 | $290.07 | 29.75¢ |
| Colorado | $759.13 | $267.66 | $211.63 | 17.17¢ |
| Connecticut | $1,035.12 | $383.51 | $288.58 | 24.51¢ |
| Delaware | $752.73 | $347.48 | $209.85 | 18.70¢ |
| District of Columbia | $994.34 | $345.41 | $277.21 | 25.98¢ |
| Florida | $445.13 | $409.47 | $124.10 | 14.99¢ |
| Georgia | $577.07 | $400.78 | $160.88 | 15.90¢ |
| Hawaii | $1,245.34 | $748.67 | $347.18 | 47.18¢ |
| Idaho | $564.65 | $175.18 | $157.42 | 13.37¢ |
| Illinois | $815.93 | $258.04 | $227.47 | 19.32¢ |
| Indiana | $707.57 | $258.67 | $197.26 | 17.02¢ |
| Iowa | $754.26 | $252.79 | $210.28 | 17.06¢ |
| Kansas | $602.30 | $312.08 | $167.91 | 15.47¢ |
| Kentucky | $537.28 | $298.99 | $149.79 | 13.80¢ |
| Louisiana | $390.67 | $285.85 | $108.91 | 12.87¢ |
| Maine | $1,462.03 | $467.07 | $407.60 | 32.11¢ |
| Maryland | $847.29 | $346.22 | $236.21 | 21.40¢ |
| Massachusetts | $1,307.36 | $581.84 | $364.48 | 30.48¢ |
| Michigan | $986.10 | $252.45 | $274.91 | 22.99¢ |
| Minnesota | $794.50 | $274.46 | $221.50 | 17.20¢ |
| Mississippi | $485.63 | $303.72 | $135.39 | 14.43¢ |
| Missouri | $644.85 | $324.91 | $179.78 | 16.02¢ |
| Montana | $708.93 | $222.05 | $197.64 | 15.57¢ |
| Nebraska | $571.83 | $260.41 | $159.42 | 13.54¢ |
| Nevada | $394.51 | $220.79 | $109.98 | 12.72¢ |
| New Hampshire | $1,203.79 | $439.43 | $335.60 | 27.64¢ |
| New Jersey | $990.63 | $309.12 | $276.17 | 24.61¢ |
| New Mexico | $642.79 | $207.33 | $179.20 | 16.51¢ |
| New York | $1,153.25 | $383.58 | $321.51 | 28.65¢ |
| North Carolina | $542.59 | $321.44 | $151.27 | 14.95¢ |
| North Dakota | $649.95 | $251.82 | $181.20 | 13.31¢ |
| Ohio | $805.68 | $312.26 | $224.61 | 19.38¢ |
| Oklahoma | $547.65 | $287.93 | $152.68 | 14.82¢ |
| Oregon | $651.33 | $369.23 | $181.58 | 15.92¢ |
| Pennsylvania | $861.94 | $321.81 | $240.30 | 21.77¢ |
| Rhode Island | $1,245.90 | $517.96 | $347.34 | 28.18¢ |
| South Carolina | $530.39 | $307.49 | $147.87 | 15.76¢ |
| South Dakota | $689.81 | $242.47 | $192.31 | 15.15¢ |
| Tennessee | $495.92 | $236.14 | $138.26 | 13.42¢ |
| Texas | $482.94 | $318.18 | $134.64 | 15.91¢ |
| Utah | $544.55 | $224.75 | $151.81 | 13.31¢ |
| Vermont | $1,085.48 | $444.09 | $302.62 | 23.84¢ |
| Virginia | $651.86 | $335.57 | $181.73 | 17.64¢ |
| Washington | $617.86 | $402.44 | $172.25 | 14.63¢ |
| West Virginia | $656.53 | $300.09 | $183.03 | 16.31¢ |
| Wisconsin | $858.16 | $257.74 | $239.24 | 19.41¢ |
| Wyoming | $666.55 | $292.59 | $185.83 | 14.43¢ |
How it works
The formula
fuel a year = heat × 365.25 ÷ UEF ÷ (3,412 BTU per kWh, 100,000 per therm, 91,452 per gallon of propane)
cost = fuel × price
Assumptions
- Hot water: 44, 56, 68 and 72 gallons a day for 2 to 5 people, from a Florida Solar Energy Center study of 74 homes; about 30 for one person.
- Setting: 120°F, the setting DOE recommends for most homes.
- Cold water: your state's largest city's yearly average air temperature plus 2°F, close to shallow groundwater. Water from lakes and rivers is colder in winter, so a winter month costs more than the average.
- Efficiency (UEF) already counts the tank's standby losses. We use the federal minimums for a 50 gallon tank (electric about 0.92, gas about 0.56), the gas tankless minimum (0.81) and ENERGY STAR's minimum for a heat pump water heater (3.30). Newer and ENERGY STAR models do better: up to about 0.95 for gas tankless and 4 or more for heat pumps.
Worked example: four people, electric tank
- Heat a day: 68 gal × 8.34 × (120 − 60) = 34,027 BTU
- A year: × 365.25 ÷ 0.92 ÷ 3,412 = 3,959 kWh
- Cost: 3,959 × $0.1816 = $719.01 a year; a heat pump water heater, $200.45
Ways to cut the cost
- Set it to 120°F. Many heaters ship at 140°F, which costs more and risks scalding.
- Fix drips and use low-flow showerheads. Less hot water is the biggest saving.
- Wash clothes in cold water. Most of a hot wash's energy goes into heating the water.
- Insulate the first few feet of pipe and an older tank's jacket if it's warm to the touch.
- Look at a heat pump water heater when the old one fails; rebates often cover much of the extra cost.
Questions people ask
How much does it cost to run a water heater?
For four people at U.S. average prices, about $719.01 a year for an electric tank, $328.47 for a gas tank and $200.45 for a heat pump water heater. Cold water matters: the same electric tank costs about $794.50 a year in Minnesota and $445.13 in Florida, at each state's prices.
Is a heat pump water heater worth it?
It uses about a third of the electricity of a regular electric tank (UEF 3.3 against 0.92), saving about $518.56 a year for four people at the U.S. average rate. It costs more to buy, needs space and cools the room it's in, and many utilities and states offer rebates.
Gas or electric water heater: which is cheaper?
Usually gas, where you have it: at U.S. averages a gas tank costs about $328.47 a year against $719.01 for an electric tank. A heat pump water heater ($200.45) is often cheaper than both.
How much hot water does a family use?
About 44 gallons a day for two people, 56 for three, 68 for four and 72 for five, in a Florida Solar Energy Center study of 74 homes. Long showers, a big tub and an older washer push it higher.
Does turning the water heater down save money?
Yes. DOE recommends 120°F for most homes; every 10°F lower cuts the heat needed by about 17% at average cold-water temperature. Don't go much below 120°F if anyone in the house has a weak immune system.