Electric vs. Gas Water Heater - What's Right for You?

Whether your home's current water heater is on its last leg or you're looking for ways to reduce your home's carbon footprint, it can be confusing when you're shopping for a new water heater.

Electric vs. gas? Water heaters that have tanks or tankless designs? What's right for you and your home? Whatever you decide, new energy-efficient water heaters use less energy and are offered in a variety of options, while also heating water faster than older models. Some even heat water instantaneously and don't have a tank at all.

If an issue with your existing water heater has you wondering if you should upgrade, keep reading to find out if you're making the right call.

Energy Usage of Water Heaters

According to Natural Resources Canada, on average 17% of the energy used in Canadian homes comes from the water heater - regardless of whether you have an electric or gas water heater.

The typical water heater holds anywhere from 151 litres to 227 litres of hot water. When you turn on hot water from the tap, hot water exits the water heater and is replaced by cold water at the bottom of the tank.

However, a couple of showers or one full bathtub is enough to deplete your water heater of hot water completely. You could be spending your time waiting for your water heater to start dispensing hot water again.

Water heaters can be powered by natural gas, propane, fuel oil, or electricity. It can be expensive to cycle water throughout the day when people in your household take a shower or run the water. Expenses can also increase due to standby heat loss, which is caused when the hot water in the tank drops below a certain temperature. Choosing the right energy plan, can help you manage these energy costs.

Gas Water Heaters

When you think of a water heater, odds are the picture in your mind is of a traditional gas water heater with a big and bulky tank and a gas pilot that ignites a burner. Gas water heaters tend to have an inefficient way of heating as cold water is continuously added to the hot water in the tank, which cools it down causing the entire water tank to need reheating. 

For this reason, many water heaters are placed in the garage or basement where any added heat won't affect the living areas of your home. However, because they're inexpensive, gas powered storage water heaters are the most common form of water heater, according to Smarter House. Additionally, gas water heaters typically last between 10-15 years depending on how well they are maintained, making it easy to replace and forget.

Customers may want to avoid higher upfront costs, opting to go with a less expensive water heater. However, avoiding a higher cost initially may not always save you money in the long run.

You could spend more money in the long-run when you choose a less expensive water heater due to potential operation and maintenance costs.

Electric Water Heaters

Like their gas counterparts, traditional electric water heaters have a large tank and a heating mechanism that converts cold water into hot water. The water is ready for use anytime you turn on the hot water faucet.

Natural gas is usually less expensive than electricity. Deciding between an electric vs. gas water heater is more a question of economics than preference. While electric water heaters may cost more to run than gas-powered water heaters, they're less expensive to purchase because they do not require the complicated gas hookup, installation fees, and open flame heating mechanism of a gas water heater.

Any energy savings from purchasing an electric water heater is likely eclipsed by a gas water heater in the long run because of gas prices. However, if your home is solar powered, it would make more sense to install an electric water heater since your solar PV system would generate power to offset your usage.

High-Efficiency Tank Water Heaters

Newer, high-efficiency water heaters have shown that you may still stretch out savings over the life of your water heater if you upgrade to an energy-efficient model.

Water heaters use energy factors (EF) to measure a water heater’s energy efficiency.  Traditional water heaters (natural gas and oil fired) have an energy factor (EF) of .53 to .70. Comparatively, energy-efficient gas water heaters have an EF of .67 or higher, while energy-efficient electric water heaters have an EF of 2.00 or 2.20, depending on tank size. By meeting EF standards, they can be considered energy efficient.

While many energy-efficient water heaters are gas-powered, there are also electric options that can be more efficient. Energy-efficient electric water heaters could cost more than their gas counterparts initially. In order to make the right choice and avoid any additional costs, make sure you look at prices when you're evaluating electric vs. gas water heaters.

Tankless Water Heaters

Also known as demand-type or instantaneous water heaters, tankless water heaters are an option to avoid unnecessary heating costs related to standby heat loss. That's because instead of holding a tank of water that continually heats throughout the day, tankless water heaters provide hot water only as needed. Just turn on a faucet and you get hot water instantly.

Tankless water heaters come in both gas and electric options, so you don't have to decide between a gas (vs. an electric) water heater if you already have a preferred type. Tankless water heaters work by drawing in cold water when you turn the tap on, instantly heating the water as it passes through a gas burner or electric element.

There is a tradeoff when choosing to go with a tankless water heater. To start, you'll only get hot water if you're drawing less than a few litres a minute. That's enough for a shower or a bath. Multiple showers or a shower plus your washing machine or dishwasher running may be too much for just one tankless water heater.

Be prepared for a substantial initial cost when purchasing and installing each tankless heater. However, since a tankless heater can last twice as long as a traditional water heater, and they have easily replaceable parts, this potentially offsets their initial price.