Residential Hot Water Electrification

The Easiest and Cheapest Way to Reduce Household Greenhouse Gas Emissions 

With our ever-changing climate, it is becoming imperative that we all assess our personal and household levels of energy consumption and greenhouse gas (GHG) emissions.  When gas space and water heating equipment reach end-of-life, this is the perfect time to reduce your household carbon footprint. 

Second, only to space heating, water heating uses the most energy in the home. Currently, water heating accounts for approximately 22.9% (1) of total household energy usage in British Columbia (BC). Although over 98% of the province’s electricity is produced through low-carbon, hydroelectric generation, 66.1% (2) of residential homes in BC still heat their water with gas, rather than electricity. With gas hot water heating typically emitting over 1 tonne of GHG emissions per home annually, gas-fueled water heating is a significant contributor to climate change.

Thankfully, the process of switching from gas tank or tankless type water heating systems to electric water heating systems is one of the easiest, most practical and most cost-effective upgrades a homeowner can do to reduce their household GHG emissions.   

Say What? Hot Water Heating with Electricity can be Cheaper than with Gas

 
There is a perception among homeowners and within industry that heating water with gas will always be cheaper than electricity. Although current gas rates are 60% lower than electricity, this does not tell us the whole story.  

Operational Costs: 
By comparing an average operational cost of heating water with electricity, regular gas or 100% renewable natural gas – regular gas might appear cheaper: 

• Gas water heating (tank): $341 per year 
• Gas water heating (tank) system with 100% renewable natural gas: $516 
• Electric water heating (tank) system: $499

But by looking at the purchase price, maintenance costs and the lifetime cost of heating with gas or electricity the picture looks different with electricity often beating out gas on cost and always beating out gas on being climate-friendly.

Purchase Price: Gas water heating systems are more expensive to purchase. In BC, new gas- fired water (tank) systems have an average upfront cost of $1,700 and tankless systems are approximately $4,000. A standard electric tank of the same size carries an average upfront cost of $900. A ‘premium’ electric tank system, which is better insulated and built out of durable, longer-lasting, materials, has an average upfront cost of $1,300. In short, there are cheaper electric water heating options.  

Maintenance Costs: Tankless gas systems cost more to maintain. Standard electric water tanks do not require the same level of annual servicing as their tankless gas counterparts. FortisBC recommends annual servicing for natural gas equipment by a licensed natural gas contractor, including gas water heating systems, to ensure they are operating safely and efficiently (3). Gas water heating systems are typically more expensive to maintain (see cost analysis below). 

When comparing the all-in costs of purchasing, maintaining and operating a water heating system – an electric system is cheaper than a gas system. A ‘premium’ electric tank would have a comparable to lower cost over a 25-year period. Even with higher purchase price and before rebates a high-efficiency heat pump will be less cost than gas systems and much lower cost than gas systems using 100% renewable natural gas.   
 

Comparing Costs

The tables below show the average cost comparisons between using gas or 100% renewable natural gas and electricity to heat different water tank styles. All electric options remain comparable or cheaper to operate over a 25-year period when accounting for equipment purchases, operating costs and maintenance costs.  Longer-life electric systems (like premium electric water tanks) and super-efficient electric systems (like heat pump hot water systems) provide low carbon and cost-effective water heating.