Where the numbers come from
EIA’s Residential Energy Consumption Survey (RECS 2020) puts the average electricity used for water heating at 2,705 kWh a year in homes that heat water with electricity: about 7.4 kWh a day. Most electric tanks heat with resistance elements (the Department of Energy puts heat pump models at about 3% of new electric tanks), rated at a uniform energy factor (UEF) of about 0.92, the federal minimum for a 50-gallon tank: nearly all the electricity becomes heat in the water, less what the tank loses while it stands. A heat pump water heater moves heat from the surrounding air into the tank instead, and ENERGY STAR requires a UEF of at least 3.30: for the same hot water it uses about 28% of the electricity, about 754 kWh a year.
Each state is priced on the cheapest plan open to any household from its largest utility modeled on HomeWattCost (the state’s average price where no utility is modeled), on the whole bill, so the extra kWh land in the right tier and period. Three cases: a standard tank drawing its energy evenly across the day; the same tank on a timer that heats only from the plan’s cheapest start hour (about 1.6 hours a day at its 4,500 W element); and a heat pump water heater drawing evenly.
The timer: free, but only on the right plan
A tank stores heat, so it does not have to heat water at the moment you use it. On a time-of-use plan, a timer (or the scheduling built into many newer water heaters) can confine heating to the cheap hours. 16 of the 51 plans priced here are time-of-use; on all of them the timer saves $10 a year or more, a median $69, and most at Hawaiian Electric (Hawaii), $560 a year heating from 9 am. On a flat or tiered plan a kWh costs the same at any hour, so a timer does not change the price.
A timer has limits worth knowing. A tank heated once a day has to hold enough hot water for the whole day, so a household that empties the tank in the evening may run out; many people set a second, shorter heating window, or raise the tank temperature and fit a mixing valve. Ask whether your utility offers a water-heater program: some pay a credit for letting them control it at peak times.
The heat pump water heater
At rated efficiency the heat pump model saves a median $315 a year across the states, more where electricity is expensive: $887 a year in Hawaii. Real savings depend on where it is installed: it draws heat from the air around it, so in a cold basement or garage it works less efficiently than its rating, and it cools the room it sits in, which helps in summer and costs some heating in winter. Most can switch to their resistance elements when demand is high, which also lowers their efficiency. Under a federal rule adopted in 2024, most electric tank water heaters over 35 gallons made from May 6, 2029 will have to reach heat-pump efficiency levels.
Common questions
How much does an electric water heater cost to run per year?
The average US home with an electric water heater uses about 2,705 kWh a year for it (EIA RECS 2020). On the cheapest open plan of each state's largest utility modeled here, that costs a median $436 a year, from $250 in Oklahoma to $1,230 in Hawaii.
How much does a heat pump water heater save?
For the same hot water, an ENERGY STAR heat pump water heater (UEF 3.30) uses about 754 kWh a year against 2,705 for a standard electric tank (UEF 0.92), at rated efficiency. That saves a median $315 a year across the states compared.
Does a timer on an electric water heater save money?
Only on a time-of-use plan. On all of the 16 time-of-use plans compared here, heating the tank at the plan's cheapest hour instead of across the day saves $10 a year or more, a median $69. On a flat or tiered plan a kWh costs the same at any hour.