⚡ WattPrice

Gas vs Electric Water Heater Cost in California (2026)

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For a typical 24 MMBtu/year of hot water in California: a natural gas tank costs about $773/year, an electric resistance tank costs $2666/year, and a heat pump water heater (HPWH) costs about $708/year.

Water heaterAnnual energyAnnual cost
Gas tank (EF 0.62) at $20.72/Mcf387 therms$773
Electric resistance tank (EF 0.93) at 35.25¢/kWh7,563 kWh$2666
Heat pump water heater (UEF 3.5) at 35.25¢/kWh2,010 kWh$708

Heat pump water heaters (HPWHs) qualify for a 30% federal tax credit (up to $2,000) and often state/utility rebates of $500–$1,500 additional.

Which to pick in California?

  • Cheapest to run: Heat pump water heater at $708/year.
  • Heat pump water heaters use about 4× less electricity than a resistance tank for the same hot water.
  • If you don’t have gas service, HPWH is almost always the cost winner over resistance, with payback in 3–6 years vs a $1,500–$3,000 install cost premium.
  • If you have gas already, the savings vs gas depend on your local gas price — in California the difference is $65/year in HPWH’s favor.

How we calculated this

Assumes a household using 24 MMBtu of hot water per year — a typical 2–4 person U.S. household. Energy needed = useful heat ÷ energy factor (EF). For gas (EF 0.62), 1 therm of fuel delivers 62,000 BTU of hot water; for electric resistance (EF 0.93), 1 kWh delivers 3,173 BTU; for HPWH (UEF 3.5), 1 kWh delivers about 11,940 BTU thanks to the heat-pump effect.

Water heater gear

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See also