Water Heater Electricity Cost Calculator

1. BTU needed = gallons × 8.24 lb/gal × 1 BTU/lb·°F × ΔT. 8.24 lb per gallon is the density of water at 125°F that the DOE water heater test procedure prints (10 CFR 430 subpart B appendix E). ΔT is the difference between set and inlet temperature. Example at this page's defaults: 55 gal × 8.24 × 62°F (120-58) = 28,098 BTU/day delivered to the water.
2. Convert BTU to kWh. 1 kWh = 3,412 BTU. So 28,098 / 3,412 = 8.235 kWh/day delivered to the water (the actual thermal energy it ended up holding).
3. Divide by UEF to get grid kWh. UEF accounts for tank standby loss, recovery efficiency, and conversion losses. A tank at UEF 0.95 (the DOE FEMP less efficient electric row) means 8.235 / 0.95 = 8.67 kWh/day from the grid. A heat pump at UEF 3.30 (the ENERGY STAR minimum) means 8.235 / 3.30 = 2.50 kWh/day: heat pumps move heat, so UEF can exceed 1.

Multiply daily grid kWh by 365 and your rate to get annual cost. The calculator runs all three calculations automatically and shows the comparison.

Tank electric (DOE FEMP less efficient electric row: UEF 0.95): Cheap to install ($500-900), 10-15 year lifespan, simple to service. Operating cost is the highest: at 64 gal/day with a 44°F inlet and 17.23 cents per kWh, a tank at UEF 0.95 costs $778/year. Prices and rates on this page are our own estimates as of the date shown; they change often. Enter your own figures for a current result. Standby loss accounts for 10-15% of total energy. Best fit: budget-constrained installs and rentals.

Tankless electric (Stiebel Eltron Tempra line: UEF 0.94 to 0.98; the Tempra 24 prints 0.97): Higher upfront cost ($800-1,500), 20-year lifespan, no standby loss. But the heat-on-demand model needs heavy circuits: at 240 V the Stiebel Eltron Tempra spec sheet lists two 50 A double-pole breakers for the Tempra 24, and across the line from one 50 A double-pole breaker (Tempra 12) through 2 x 30, 2 x 40, 2 x 50 and 3 x 40 to 3 x 50 A double-pole (Tempra 36). At UEF 0.97 the operating cost is about 2% lower than a tank at UEF 0.95 for the same usage. Best fit: small households, second/guest bathrooms.

Heat pump hybrid (ENERGY STAR minimum UEF 3.30; DOE FEMP best available 3.93): Highest upfront ($1,500-2,500 plus install), 12-15 year lifespan. At UEF 3.30 it uses about 71% less electricity than a tank at UEF 0.95. At 64 gal/day with a 44°F inlet and 17.23 cents per kWh it costs $224/year against the tank's $778. The catch: the heat pump pulls heat from surrounding air, so the unit needs ~750 cubic feet of conditioned space (basement, utility room) and a condensate drain. The federal 25C credit ended for property placed in service after 2025. Best fit: any homeowner with installation space.

For sizing the wire run from the panel to the heater, our wire distance calculator handles the conductor sizing for the heat pump branch circuit.

Water enters the heater at a temperature that varies with region and season. At a 120°F set point, a 40°F inlet needs a rise of 80°F and a 70°F inlet a rise of 50°F: for the same gallons the colder supply takes 60% more energy.

The default inlet, 58°F, is the supply water temperature of the DOE test procedure for water heaters (10 CFR 430 subpart B appendix E, section 2.3): "The temperature of the water being supplied to the water heater shall be maintained at 58 °F ± 2 °F". Your own supply may run colder or warmer: adjust the inlet input above to match it. Annual cost scales linearly with ΔT, so at the 58°F inlet, cutting set temperature from 130°F to 120°F (which is the DOE recommendation for most homes) cuts cost about 14%. To estimate the dollar payback of offsetting water heating with solar, our solar ROI calculator takes annual kWh load as input.