How Much Does It Cost to Run an Electric Water Heater?

By Yasir Siraj · Last updated 22 October 2026

About $40.68 a month at the US average rate. In homes that heat their water with electricity, the water heater uses around 2,706 kWh a year — about 225.5 kWh a month — which on average is more than air conditioning uses in the homes that have it, at 2,318 kWh a year. Both are EIA averages across the homes that use each one. It rarely gets noticed, because a water heater never appears as a line of its own on the electric bill.

Those figures come from EIA's 2020 household survey, averaged across the homes that have an electric water heater. Fewer than half of US homes do; the rest mostly heat their water with natural gas, and their water heating shows up on the gas bill instead. Across every home in the country, water heating accounts for about 12% of household electricity, level with space heating and behind only air conditioning (EIA).

What it costs where you live

The same 2,706 kWh a year costs very different amounts depending on the state. The table below prices that one national average at each state's rate over the past twelve months, so it shows how much the rate alone changes the cost. It is not what water heating actually costs in each state: households in different states use different amounts of hot water, so read it as a comparison, not a local bill.

Usage: U.S. Energy Information Administration, 2020 Residential Energy Consumption Survey, table CE5.3a, average electricity for water heating per household that uses it (source). Rates: EIA residential revenue divided by sales over the latest twelve months. The same usage is applied in every state so the rate alone shows through; it is not each state's own average. The monthly column is the yearly figure divided by twelve. Your state is on the rates by state page.

Your own number can sit well away from that average, and the reasons are mostly common sense. A household of five runs more hot water than a single person. Homes in colder states start from colder water coming in from the mains, so every gallon needs more heating. And a tank set hotter than it needs to be costs more both to heat and to keep hot, because a storage tank loses a little heat around the clock whether anyone is using water or not.

What actually brings it down

The cheapest change is the thermostat. If yours is set to 140°F, the Department of Energy suggests turning it down to 120°F, which suits most homes and also cuts the risk of scalding (DOE). DOE adds one caveat worth repeating: anyone with a compromised immune system or a chronic respiratory disease may want to keep it at 140°F. I have not put a dollar figure on this one, because I could not find a reliable estimate of the saving for a typical household.

Next is simply using less hot water, and the shower is the obvious place. Standard showerheads run at 2.5 gallons a minute; a WaterSense-labeled one uses no more than 2.0. The EPA says the average family could save about 2,700 gallons a year by switching, and more than 330 kWh of electricity (EPA). The EPA does not publish the assumptions behind that figure, so treat it as a rough guide rather than a figure for your home. If a home did save 330 kWh, that would be worth about $59.53 a year at the US average rate; the real saving depends on how much hot water the household uses and what heats it. Not dramatic, but a showerhead costs little and takes minutes to fit.

The big change is the type of water heater. A heat pump water heater doesn't make heat from electricity the way a standard tank does; it pulls heat out of the surrounding air and moves it into the water. DOE puts these at two to three times as efficient as a conventional electric water heater (DOE). As an illustration only, not a promise: a unit that actually reached DOE's two to three times the efficiency of a standard electric tank would use a half to a third of the electricity, so applied to the average 2,706 kWh that would be a saving of about 1,353 to 1,804 kWh a year — $244.08 to $325.44 a year at the US average rate, or $20.34 to $27.12 a month. That is my arithmetic on DOE's range rather than a measured result. A real household's saving depends on how much hot water it uses, the model, and how warm the air around the unit is.

One thing that has changed: the federal energy efficient home improvement credit used to cover 30% of the cost of a qualifying heat pump water heater, up to $2,000 a year (IRS Form 5695 instructions). It is not available for any property placed in service after December 31, 2025 (IRS), which in practice means a unit installed and working by the end of 2025. Plenty of buying guides, including some official ones, still mention it. State and utility rebates may still be available, and your utility's website is the place to check.

Electric or gas?

Whether gas would be cheaper is the natural next question, and it is the one this site cannot answer for you. Gas water heating can cost less, but that depends entirely on your local gas price and the efficiency of both units, and this site tracks electricity prices only. What it can tell you is the electric side of the comparison. Start from the 2,706 kWh average and your state's rate in the table above; that is a better guide than a wattage-and-hours estimate, because a water heater switches on and off through the day and few people know how long theirs actually runs. If you do know, the appliance running cost calculator will do the arithmetic.

If you want the wider picture, what uses the most electricity in a home sets the water heater against everything else in the house, and what a space heater costs to run does the same exercise for winter heating.