Heat pump water heater vs a standard electric tank

Heat pump water heater costs less by

$322a year

$3,221 over ten years · heat pump water heater uses 65% less electricity

Heat pump water heater 964 kWh a year against 2,720 kWh — at the US average rate of 18.34¢/kWh.

Heat pump water heater964 kWh$177

Electric water heater2,720 kWh$499

The verdict

The hybrid wins by roughly two thirds. Both hold the same volume at the same temperature; the difference is that one heats water with a resistance element and the other runs a small refrigeration cycle backwards to move heat out of the room and into the tank. Because water heating is a large, constant load, a proportional saving on it is worth more than the same proportion on almost anything else in the house.

Side by side

Heat pump water heater and electric water heater are costed by the same function from the same dataset, so the $322 between them is a difference in the appliances and not in how each was measured. Heat pump water heater draws an average 110 W across the hours it runs; electric water heater draws 311 W across its own.

Both at 18.34¢/kWh, the EIA residential average for June 2026. Ten years is roughly the service life of either.

	Heat pump water heater	Electric water heater	Difference
Electricity a year	964 kWh	2,720 kWh	1,756 kWh
Cost a year	$177	$499	$322
Cost a month	$15	$42	$27
Over ten years	$1,767	$4,988	$3,221

The assumptions behind those figures

Nothing above is a manufacturer’s claim. 550 W at 20% for 24 hours a day, 365 days a year, is where heat pump water heater’s 964 kWh comes from; 4,500 W at 7% for 24 hours over 365 days is where electric water heater’s 2,720 kWh comes from. The duty cycle is the input most published comparisons leave out, and it is why the ratings and the running costs are not in the same proportion here.

Change any of these on the appliance’s own page and every figure moves with it. The duty cycle is a property of the machine; the hours are a property of you.

	Heat pump water heater	Electric water heater
Rated power	550 W	4,500 W
Duty cycle	20%	7%
Hours a day in service	24	24
Days a year	365	365
Average draw while in service	110 W	311 W

Does the switch pay for itself?

The saving is $322 a year. What that has to pay back is the one number this site does not have — what heat pump water heater costs you, installed, after whatever incentives you qualify for — and quotes for the same job differ by thousands. So put yours in rather than have this page invent one, and the arithmetic runs in front of you.

Your state

Residential average for June 2026, from the EIA. Your own tariff may differ; you can read it off your bill.

Your quote, installed, in dollars

The price after any rebate or tax credit you qualify for — that is the number the saving has to pay back.

Years you expect to keep it

Not how long it lasts — how long you expect to be the one paying the bill.

Saving a year: $322
Pays back in: —
Net over 15 years: —
Electricity saved: 1,756 kWh

Enter the quote you were actually given, after any rebate or credit. At the US average rate of 18.34¢ per kWh the switch saves $322 a year — that is the figure your quote has to pay back.

The gap in your state

The appliances are the same everywhere; the rate is not. The gap between these two is worth $926 a year in Hawaii and $230 in Nevada — 4× apart, on identical appliances.

A year of each, by state. Residential average price, EIA June 2026.

State	Rate	Heat pump water heater	Electric water heater	Difference
Hawaii	52.72¢	$508	$1,434	$926
California	34.74¢	$335	$945	$610
Massachusetts	29.61¢	$285	$805	$520
Maine	29.59¢	$285	$805	$520
New York	29.49¢	$284	$802	$518
Rhode Island	29.23¢	$282	$795	$513
Alaska	28.21¢	$272	$767	$495
New Hampshire	27.01¢	$260	$735	$474
New Jersey	24.95¢	$240	$679	$438
Vermont	24.44¢	$236	$665	$429
District of Columbia	24.39¢	$235	$663	$428
Connecticut	24.32¢	$234	$661	$427
Michigan	22.99¢	$222	$625	$404
Maryland	21.84¢	$210	$594	$384
Pennsylvania	21.73¢	$209	$591	$382
Illinois	19.89¢	$192	$541	$349
Wisconsin	19.56¢	$188	$532	$344
Delaware	19.29¢	$186	$525	$339
Ohio	19.19¢	$185	$522	$337
Minnesota	17.52¢	$169	$477	$308
Indiana	17.51¢	$169	$476	$308
Virginia	17.22¢	$166	$468	$302
Colorado	17.13¢	$165	$466	$301
Alabama	16.4¢	$158	$446	$288
Georgia	16.36¢	$158	$445	$287
Oregon	16.32¢	$157	$444	$287
Missouri	16.22¢	$156	$441	$285
Texas	15.94¢	$154	$434	$280
Iowa	15.93¢	$154	$433	$280
Kansas	15.71¢	$151	$427	$276
South Carolina	15.55¢	$150	$423	$273
West Virginia	15.45¢	$149	$420	$271
South Dakota	15.36¢	$148	$418	$270
Wyoming	15.24¢	$147	$415	$268
Arizona	15.18¢	$146	$413	$267
Montana	15.14¢	$146	$412	$266
Florida	15.1¢	$146	$411	$265
New Mexico	15.06¢	$145	$410	$265
Washington	14.91¢	$144	$406	$262
Mississippi	14.88¢	$143	$405	$261
North Carolina	14.74¢	$142	$401	$259
Idaho	14.37¢	$138	$391	$252
Oklahoma	14.33¢	$138	$390	$252
Kentucky	14.26¢	$137	$388	$250
Arkansas	14.12¢	$136	$384	$248
North Dakota	14.12¢	$136	$384	$248
Tennessee	14.07¢	$136	$383	$247
Louisiana	13.49¢	$130	$367	$237
Utah	13.37¢	$129	$364	$235
Nebraska	13.25¢	$128	$360	$233
Nevada	13.11¢	$126	$357	$230

Questions

How much does a hybrid water heater actually save?

The hybrid wins by roughly two thirds. On the assumptions printed above, heat pump water heater costs $177 a year and electric water heater costs $499 at 18.34¢ per kilowatt-hour — a difference of $322 a year, or $3,221 over ten years at today’s rate.

How is heat pump water heater’s 964 kWh a year calculated?

Rated watts × duty cycle × hours × days, plus standby, times your rate — the same function that produces every figure on this site. For heat pump water heater: 550 W × 20% × 24 h × 365 days ÷ 1,000 = 964 kWh, which at 18.34¢ is $177. Electric water heater runs through the identical arithmetic on its own assumptions and lands at $499. The rate is the EIA residential average for June 2026; nothing here is a manufacturer’s claim.

Will it make my basement cold?

It will cool the surrounding air by a few degrees and remove humidity, which in most basements is welcome and in a few is not. If the tank sits in conditioned living space, some of the saving is paid back by the heating system replacing the heat it removed — one of the few cases where the room it stands in changes the arithmetic.

What is the quickest saving without replacing anything?

Turn the thermostat from 140°F to 120°F, and insulate an older tank. Both reduce the standing loss that runs every hour of the year, and neither requires buying anything substantial.

Does my state change the answer?

It changes the size of the gap, never its direction. The same pair costs $926 a year apart in Hawaii and $230 in Nevada. Whichever uses less electricity uses less everywhere; only what that is worth moves.

Source: U.S. Energy Information Administration, Electric Power Monthly, Table 5.6.A, June 2026. U.S. Government work, public domain.

How every figure on this page is computed · Where the data comes from