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If you're replacing an ageing water heater, renovating your home or simply looking for ways to reduce your energy bills, one of the most common questions homeowners ask is: is it cheaper to heat water with gas or electric?

While electric water heaters are often cheaper and simpler to install, gas models may be a better fit for larger households or homes that already have a mains gas supply.

The right option depends on your home's existing setup, how much hot water your household uses day to day, and your overall budget.

In this guide, we'll compare gas and electric water heater costs, including upfront costs, installation considerations, running costs and the key differences between the two systems.

How much does a water heater cost in 2026?

The total cost of a water heater isn't just about the unit itself. You'll also need to consider installation costs and ongoing running costs over the lifetime of the system.

In general:

• Gas water heaters generally cost more to install

• Electric water heaters are usually cheaper to buy

• Typical running costs for both systems are around £60–£80 per month, depending on usage

Water heater cost comparison

Electric water heaters are generally cheaper to buy and install, while gas models often involve higher installation costs because they require a gas supply, suitable ventilation and installation by a Gas Safe registered engineer.

Typical running costs are similar for both systems and will depend on your household's hot water usage and the efficiency of the appliance.

These are guide prices only. Costs will vary depending on the size, specification and type of water heater you choose.

How much does water heater installation cost?

Installation costs vary depending on the type of water heater you're installing and the existing services available in your home.

A straightforward replacement in the same location will usually be simpler than installing a completely new system or relocating pipework and services.

As a guide, professional installation costs around £80–£300 for an electric water heater and £150–£600 for a gas water heater.

Gas water heaters are generally more expensive to install because they require:

• A gas supply

• Suitable flueing or ventilation

• Installation by a Gas Safe registered engineer

Electric water heaters are often simpler to fit because they don't require a gas connection or flue. However, some installations may need electrical upgrades if the existing supply isn't suitable.

Get a quote for water heater installation

Every property is different, so it's always worth comparing a few quotes before making a decision.

Find checked plumbers and heating engineers working in your area and compare quotes for your project.

Water heater costs at a glance

• Gas water heaters generally cost more to install

• Electric water heaters are often cheaper to install and can be fitted in more locations because they don't need a gas connection

• Water heaters (gas or electric) tend to cost between £60–£80 per month to run

What is the difference between a gas and electric water heater?

The main difference between a gas and electric water heater is how the water is heated.

Gas water heaters burn natural gas or LPG to heat water, while electric water heaters use mains electricity.

Both systems can provide reliable hot water, but they differ in terms of installation requirements, how they heat water and where they're most suitable.

The main types of water heater available in the UK

Before comparing gas and electric water heaters, it helps to understand the main options available for UK homes.

Storage tank water heaters (hot water cylinders)

These store hot water in a cylinder ready for use. They're common in homes with conventional or system boilers and can be heated by gas, electricity or renewable energy sources.

Tankless water heaters

Also known as on-demand water heaters, these heat water only when it's needed rather than storing it in a tank. They're popular in homes where space is limited and can be powered by gas or electricity.

Heat pump water heaters

Heat pump water heaters use electricity to extract heat from the surrounding air and transfer it to the water. They're highly energy efficient but usually cost more to buy and install.

Solar hot water systems

Solar hot water systems use roof-mounted solar collectors to help heat water. They're often used alongside another heating system to provide hot water throughout the year, even when the weather isn't at its best.

Water heater costs by type

Gas water heater costs

Gas water heaters remain a popular choice for homes already connected to the mains gas network.

They generally heat water quickly and are particularly well suited to larger households where several people may be using hot water around the same time.

Unit costs

Most gas water heaters cost between £300 and £600, depending on the size, specification and manufacturer.

Installation costs

Installation is often more involved than with electric models because gas pipework, ventilation and safety checks are required. Average cost of installing a gas water heater: £150–£600.

Supply and fit costs

Most homeowners can expect supply and fit costs to fall between £450 and £1,200, depending on the complexity of the installation.

Running costs

Gas water heaters typically cost between £60–£80 per month to run, or around £720–£960 per year, although this will vary depending on your household's hot water usage and the efficiency of the appliance.

Electric water heater costs

Electric water heaters are often chosen for flats, smaller homes, extensions and properties without access to mains gas.

They're generally simpler to install and offer more flexibility when it comes to positioning the unit.

Unit costs

Electric water heaters generally cost between £100 and £400+, depending on capacity and features.

Installation costs

Installation is often quicker and simpler than for gas models because there's no need for gas pipework or flueing. Average cost of installing an electric water heater: £80–£300.

Supply and fit costs

Supply and fit costs typically range from £200–£700+, depending on the model selected and whether any electrical upgrades are required.

Running costs

Electric water heaters generally cost between £60–£80 per month to run, or around £720–£960 per year, although your actual costs will depend on how much hot water your household uses and the efficiency of the appliance.

What about tankless water heaters?

If space is limited, a tankless water heater could be worth considering.

Rather than storing hot water in a tank or cylinder, these systems heat water as it's needed. They're available in both gas and electric models and can free up valuable storage space.

Tankless water heater cost guide 2026

For an environmentally friendly, energy efficient way to heat water, explore our tankless water heater cost guide. With advantages, options and considerations.

Learn more

What affects the cost of a water heater?

Two homes can end up with very different quotes for what appears to be the same water heater. That's because the overall cost depends on a range of factors beyond the unit itself:

• Type of water heater: Gas water heaters generally have higher installation costs than electric models

• Hot water demand: Larger households typically need larger-capacity systems, which increases costs

• Existing services: Installing a gas water heater is often simpler and cheaper if the property already has a suitable gas supply

• Location of installation: Difficult-to-access locations can increase labour costs

• Energy efficiency: More efficient models may cost more initially but can reduce running costs over time

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Additional costs to budget for

Alongside the water heater itself, there could be some extra costs you may need to budget for. These might include:

• Electrical upgrades

• New gas pipework

• Ventilation or flue alterations

• Pipework modifications

• Removal of an existing system

• Making good after installation

• Annual servicing and maintenance

What should be included in a quote for water heater installation?

A detailed quotation will usually include:

• Supply of the water heater (where applicable)

• Labour costs

• Pipework connections

• Testing and commissioning

• Removal of the existing unit where agreed

• Any required certification

If you're comparing quotes, check exactly what's included before making a decision.

How long does a water heater installation take?

A straightforward replacement can often be completed within a day.

More complex projects involving new pipework, gas connections or electrical upgrades may take longer.

Can you install a water heater yourself?

In most cases, professional installation is strongly recommended.

Gas water heaters must be installed by a Gas Safe registered engineer, while electrical work may need to comply with Part P Building Regulations.

An incorrectly installed water heater can lead to poor performance, safety issues and costly repairs later on.

Should I use a gas or electric water heater?

There's no universal right answer. The best choice depends on your home's existing services, how much hot water you use and whether lower upfront costs, installation requirements or compatibility with your home matter most.

If you're trying to decide between a gas and electric water heater...

Choose a gas water heater if:

• Your property already has a gas supply

• Your household uses a lot of hot water

Choose an electric water heater if:

• You don't have access to mains gas

• You want a simpler installation

• Your hot water demand is relatively modest

If in doubt, a checked local central heating engineer can help guide you through the best option for your property.

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Gas vs electric hot water heater calculator

There's no single calculator that works for every household because energy tariffs, usage habits and household size all vary.

However, if you're keen to crunch the numbers, comparing your current gas and electricity prices alongside your household's typical hot water usage can provide a useful indication of likely running costs.

Water heater installation checklist

• Decide whether gas or electric is most suitable

• Consider your household's hot water usage

• Compare several quotes and check what's included

• Confirm any additional upgrade costs

• Compare installation costs alongside expected running costs

• Check warranty details

• Discuss installation timescales

When should you speak to a plumber or heating engineer?

If your current water heater is becoming unreliable, struggling to meet demand or approaching the end of its lifespan, it's worth speaking to a professional to help weigh up your options.

A qualified plumber or heating engineer can assess your home's requirements and recommend the most suitable solution before you commit to a purchase.

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Find checked tradespeople near you

Whether you're replacing an existing water heater or installing a new system, professional advice can help you choose the right option for your home and budget.

Compare quotes from checked plumbers and heating engineers working in your area.

FAQs

Is it cheaper to heat water with gas or electric?

Running costs are broadly similar for many modern gas and electric water heaters. The best value option will depend on your installation costs, hot water usage and the type of system that's most suitable for your home.

Which is more efficient: a gas or electric water heater?

Modern gas and electric water heaters can both be highly efficient. The most cost-effective option will depend on your home's existing services, hot water usage and the type of system that's most suitable for your property.

How much does a water heater cost to run?

Typical running costs are around £60–£80 per month to run (£720–£960 per year) for both gas and electric water heaters, although your actual costs will depend on your household's hot water usage, energy tariffs and the efficiency of the appliance.

Are gas water heaters cheaper to install?

No. Gas water heaters are usually more expensive to install because they require gas pipework, ventilation and installation by a Gas Safe registered engineer.

How long does a water heater last?

The lifespan varies depending on the type and how well it's maintained, but many water heaters can last 10–15 years or more.

Are tankless water heaters worth it?

Tankless water heaters can be a good option where space is limited or where on-demand hot water is a priority. However, suitability depends on your property's hot water requirements.

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