Propane vs. Electric Water Heater – What Is Right For Your Home


Table of Contents

Research by the Department of Energy shows that water heaters are the second largest energy consumers in the US, accounting for about 18% of every household’s energy bills. Therefore, lowering your water heater’s energy consumption can significantly lower your power bills.

So, which is a better option — propane or electric water heaters?

When several people think of propane, they think of barbecue fuel. However, propane has several other uses besides providing heat for barbecues. It’s a versatile fuel as efficient and powerful as traditional energy sources like electricity and biogas. 

Would you like to save money on your propane costs? If so, you’re in the right place! Click here to get 100% free, no obligation quotes from propane dealers in your area.

In some cases, it performs even better.

Propane can power almost any home comfort appliance that conventionally relies on electricity, including water heaters. According to the National Propane Gas Association (NPGA), approximately 11.9 million American households rely on propane for space and water heating. 

Of these, 5.8 million depend on propane as their primary heating fuel. In this article, our experts offer a detailed comparison of propane vs. electric water heaters. Read on to discover if switching from electric to propane water heaters is worth it.

We’ll guide you in choosing between propane and electric water heaters for your home: a comprehensive comparison to make the right decision.

Electricity is the most common water heater in most households. However, there’s been a recent significant surge in homes switching to propane water heaters.

Is A Propane Water Heater Better Than Electric One

So, should you install a propane water heater? Which is better, propane or electric water heaters?

While there are no straightforward answers to these questions, propane water heaters have several advantages over electric heaters. We’ll discuss more of these in subsequent sections of this article. 

However, below is a run-down of reasons you should consider propane water heaters:

  • They’re more environmental-friendly and feature low ownership and maintenance costs
  • Such heaters also guarantee significantly higher efficiency, and they’re remarkably durable. 
  • Finally, they can enhance your home’s value, especially if you opt for propane tankless water heaters. 

Before comparing propane vs. electric water heaters, let’s look at how both alternatives work.

How Does An Electric Water Heater Work?

Electric water heaters typically comprise large tanks with high-end electric heating rods running through them vertically. The rods heat the water, starting from the tank’s center.

The thermostat inside the cylinder monitors the water temperature. When the temperature goes below your preferences settings, it signals the heating element to reheat the water to the preset values.

Electric Water Heater Components

Most water heaters, whether electric or propane, look like giant metal cylinders. However, the inner components of an electric water heater are slightly different.

  • Dip tube: Water enters the tank through a dip tube at the cylinder’s bottom.
  • Heating mechanism: Most electric water heaters have heating elements at the tank’s center. Water enters the cylinder through the dip tube, moves to the center for heating, and then travels upwards for dispatch to your taps.
  • Heat-out pipe: As the dip tube brings water into the heater, the heat-out pipe delivers hot water from the tank to your home. Such pipes are usually suspended at the tank’s top.
  • Thermostat: Some electric water heaters have different thermostats for every element. The higher your thermostat setting, the more energy your heater will consume.
  • Shut-off valve: As the name suggests, the shut-off valve stops rainwater from flowing into the tank from the top.
  • Drain valve: Suppose you want to empty the heater for repairs or to replace heating elements. You can use the drain valve at the cylinder’s bottom.
  • Sacrificial anode rod: Most electric water heaters have suspended anode rods to reduce corrosion. Usually, such rods are made of aluminum with a steel core of magnesium.
  • Pressure relief valve: Both electric and propane water heaters have safety valves to keep internal pressure within safe limits.

How Does A Propane Water Heater Work?

Electric and propane water heaters have a lot in common. For instance, they both have pressure relief and drainage valves, dip tubes, discharge pipes, and water-holding tanks. The most significant difference between the two is the heat source. 

With a propane water heater, the heat source is a gas burner below the tank.

Older propane water heaters had pilot tubes with continuously burning pilot lights to ignite the burner. They also had thermocouples —  safety devices that turned off the gas whenever the pilot tubes malfunctioned. 

Comparatively, new propane water heater models use more efficient electronic igniters.

Another significant difference between electric and propane water heaters is the latter have exhaust flues. While propane is a harmless fuel, its combustion produces low levels of dangerous carbon monoxide fumes. 
Therefore, propane water heaters have exhaust flues to direct these emissions safely out of the building.

What About Propane Tankless Water Heaters?

As outlined above, traditional heaters have storage tanks to hold water. However, not all water heaters have such cylinders. Some heat water on demand. They access and heat the water directly from the pipe. Such models are known as tankless water heaters.

Most tankless water heaters are propane-powered. They can lower your energy bills because they only heat the water when necessary. Also, they occupy less space than traditional heaters.

5 Main Advantages Of A Propane Water Heater

Are you caught up in the propane vs. electric water heater dilemma? Do you want to switch to a propane water heater? Which is better between the two?

Generally, propane water heaters have more benefits than electric alternatives. Below are a few examples:

1. Environmental Friendly

With global warming becoming a forefront topic amidst the recent clamor for environmental conservation, it’s more crucial today, more than ever, to use environmental-friendly energy sources. 

When you compare propane vs. electric water heaters superficially, the latter seems more environmentally friendly. However, that’s not the case. 

According to the Energy Information Administration, the U.S. generates over 60% of its utility-scale electricity from burning fossil fuels like petroleum, coal, and natural gas. Only 29% of the electricity comes from renewable energy sources. 

Therefore, while electric water heaters might be environmentally friendly, they rely on electricity from environmentally unfriendly sources.

Comparatively, propane is an environmentally friendly fuel. It offers a cleaner burn than coal and petroleum and has less greenhouse emission. Therefore, choosing propane water heaters can lower your building’s carbon footprint. 

Also, because propane has low sulfur content, its combustion generates ultra-low levels of sulfur oxides, enhancing its environmental-friendliness.

2. Efficiency

Generally, propane water heaters are more efficient than electric heaters. They heat approximately twice faster and deliver more hot water.

Propane is a primary energy source, while electricity is a secondary one. Simply put, you can use propane as it is, while electricity relies on other energy sources. 

If there’s a shortage of coal, petroleum, or natural gas, there might not be enough electricity in the grid to supply all homes. That might force you to shower with cold water.

When you install a propane tank, you can monitor its consumption and estimate when it will run out. This predictability prevents being caught unawares, making propane water heaters more efficient. On the other hand, you have no control over when you’ll experience a blackout. 

While the Department of Energy usually publishes scheduled blackouts, these power cuts can sometimes be unforeseen. Such cases can inconvenience you and force you to use cold water.

3. Durability

The average lifespan of a regular water heater is 8 – 12 years. However, propane tankless water heaters can last 15 – 18 years with proper maintenance.

Generally, propane water heaters (with or without tanks) are more durable than electric heaters. That’s because they’re typically built with higher-quality, stronger materials. Also, you can easily repair most of their components instead of replacing them. 

Usually, propane tankless water heaters are small and briefcase-shaped. The small size makes it possible to install them inside your home, away from harsh external weather elements. Because of this, they usually last longer.

4. Home Value

Energy Information Administration statistics show that energy bills consume about 2.7% of the average American household’s income. That explains why every homeowner wants better ways to enhance energy efficiency and lower power bills.

As highlighted above, propane water heaters are more energy efficient than electric alternatives. Because of this, a building with a propane water heater will likely attract more clients.

Also, propane water heaters can increase your Home Energy Rating System (HERS) and Leadership in Energy and Environmental Design (LEED) ratings. 

High HERS and LEED scores can show prospects your property is energy-efficient and sustainable, increasing its value and market price.

5. Lower Total Cost Of Ownership and Maintenance Over Time

A tanked electric water heater costs about $500, while a standard propane tank costs approximately $700. However, the cost isn’t only about the upfront expenses. When considering the cost of a water heater, also check its maintenance expenses. 

You’ll notice propane water heaters are more cost-effective. They last longer and have fewer maintenance requirements.

Is It Cheaper To Heat Water With Propane Or Electricity?

The short answer is — yes, it’s cheaper to heat water with propane. Generally, propane water heaters have 30% lower operational costs than electric heaters. 

If your home uses 41 gallons or less of heated water daily, you can enhance energy efficiency by 24% – 34% by installing a propane tankless water heater.

Is It Worth It Switching From Electric To Propane?

To conclude the propane vs. electric water heater debate — should you switch to propane heaters? Is it worth it?

Our answer is a resounding YES! As outlined several times in this article, propane water heaters have several advantages. Here’s a summary in case you missed them:

  • They’re more energy efficient and environmental-friendly
  • They can increase your home’s value and are remarkably durable
  • They have lower overall ownership and maintenance costs.


Are you considering making the switch but need some help? Don’t fret — that’s why Compare Propane is here. We’ll help you identify the best propane dealers with the friendliest prices. Help is just an email away. Contact us, and let’s help you save jump ship from the uneconomical electric water heaters.

Ryan McCabe

Ryan McCabe

Ryan is a home and small business energy expert, having overseen retail propane, heating oil, and HVAC services companies. On ComparePropane, Ryan writes about things that people should know when shopping for or using propane in their homes and businesses. 

Read full bio

Lower Your Propane Costs Today!

What Customers Say

Lower Your Propane Costs Today!

Over 15,000 people have saved! You're one step closer to reducing your monthly utility costs. The average customer saves 30% on their yearly propane costs.

Signing up to get price quotes is 100% FREE