Electric Water Heater Running Cost
Find the daily and annual electricity cost of your electric water heater.
Enter tank size, daily usage, temperature rise, efficiency rating, and utility rate.
Water heating is the second-largest energy expense in most homes, after space heating and cooling. An electric water heater with a 50-gallon tank and average usage typically costs $400-600 per year to run.
The physics
It takes 1 BTU to raise 1 pound of water 1 degree Fahrenheit. Water weighs 8.34 pounds per gallon.
BTU needed = gallons_per_day x 8.34 x temperature_rise (F)
kWh needed = BTU / 3,412 / efficiency
cost per day = kWh x electricity_rate
The temperature rise is from incoming cold water to the tank setpoint. Cold water enters at roughly 55-65 F in most U.S. climates (colder in northern states in winter). A tank set at 120 F with 60 F incoming water has a 60 F rise.
Standard tank efficiency
Most conventional electric resistance water heaters are 90-95% efficient (energy factor). The EF rating appears on the yellow EnergyGuide label. Heat pump water heaters are 2-4x more efficient — they move heat rather than generate it, achieving an effective efficiency of 200-400%.
Reducing water heating costs
Lowering the thermostat from 140 F to 120 F reduces standby losses and costs. Adding a timer to prevent heating during overnight off-peak hours (if your utility has time-of-use rates) typically saves 5-15%. An insulating blanket on older tanks reduces standby losses by 25-45%. And reducing hot water usage — shorter showers, efficient showerheads, cold-water laundry — cuts consumption directly.
At $0.13/kWh, each 10-gallon reduction in daily hot water use saves roughly $25-35 per year.