Short answer (updated November 1, 2026)
A heat pump water heater is cheaper to run than a gas tank in almost every state. On the same DOE rated hot water load, a heat pump water heater costs less to run than a standard gas tank in 50 of the 51 jurisdictions we track (50 states plus DC) at current prices (EIA, 12-month avg. through Aug 2026). Nationally that is about $154/yr for a heat pump versus $273/yr for gas, a $119/yr difference. The gap is largest in Hawaii ($635/yr) and smallest in Alaska (-$2/yr). A heat pump typically costs about $2,100 more to install, so payback at national prices is roughly 17.6 years before rebates.
Annual operating cost by state
Sorted by how much a heat pump saves versus a standard gas tank. Click a state for its rebates and code requirements.
| State | Electricity | Gas/therm | Heat pump $/yr | Gas tank $/yr | HP saves |
|---|---|---|---|---|---|
| Hawaii | 44.3¢ | $5.86 | $379 | $1014 | $635 |
| Florida | 15.4¢ | $2.46 | $132 | $426 | $294 |
| Arkansas | 13.6¢ | $2.18 | $116 | $377 | $261 |
| Texas | 16.0¢ | $2.20 | $137 | $381 | $244 |
| Georgia | 15.2¢ | $2.14 | $130 | $370 | $240 |
| North Carolina | 14.8¢ | $1.92 | $126 | $332 | $206 |
| Arizona | 15.4¢ | $1.95 | $132 | $337 | $205 |
| Washington | 14.2¢ | $1.75 | $121 | $303 | $182 |
| Louisiana | 13.0¢ | $1.68 | $111 | $291 | $180 |
| Massachusetts | 30.4¢ | $2.54 | $260 | $439 | $179 |
| South Carolina | 15.8¢ | $1.79 | $135 | $310 | $175 |
| Mississippi | 14.8¢ | $1.72 | $127 | $298 | $171 |
| Alabama | 16.4¢ | $1.78 | $141 | $308 | $167 |
| Missouri | 14.0¢ | $1.64 | $119 | $284 | $165 |
| Oklahoma | 13.8¢ | $1.61 | $118 | $279 | $161 |
| Virginia | 16.6¢ | $1.74 | $142 | $301 | $159 |
| Oregon | 15.5¢ | $1.68 | $133 | $291 | $158 |
| Delaware | 18.0¢ | $1.78 | $154 | $308 | $154 |
| Kentucky | 13.9¢ | $1.58 | $119 | $273 | $154 |
| Kansas | 15.1¢ | $1.43 | $129 | $247 | $118 |
| Maryland | 21.2¢ | $1.69 | $181 | $292 | $111 |
| New Hampshire | 26.9¢ | $1.95 | $230 | $337 | $107 |
| Tennessee | 13.6¢ | $1.29 | $116 | $223 | $107 |
| West Virginia | 15.5¢ | $1.39 | $133 | $240 | $107 |
| Nebraska | 12.7¢ | $1.24 | $109 | $215 | $106 |
| Vermont | 23.9¢ | $1.77 | $204 | $306 | $102 |
| Maine | 29.6¢ | $2.03 | $253 | $351 | $98 |
| California | 32.3¢ | $2.14 | $277 | $370 | $93 |
| Rhode Island | 29.4¢ | $1.98 | $252 | $343 | $91 |
| Wyoming | 14.0¢ | $1.22 | $120 | $211 | $91 |
| District of Columbia | 24.5¢ | $1.72 | $209 | $298 | $89 |
| Pennsylvania | 20.9¢ | $1.54 | $178 | $266 | $88 |
| Ohio | 18.4¢ | $1.34 | $157 | $232 | $75 |
| Iowa | 14.2¢ | $1.12 | $121 | $194 | $73 |
| Nevada | 13.4¢ | $1.08 | $115 | $187 | $72 |
| Utah | 13.3¢ | $1.07 | $113 | $185 | $72 |
| New York | 28.6¢ | $1.81 | $245 | $313 | $68 |
| North Dakota | 12.3¢ | $0.98 | $106 | $170 | $64 |
| Indiana | 16.9¢ | $1.18 | $144 | $204 | $60 |
| South Dakota | 14.3¢ | $1.02 | $122 | $176 | $54 |
| Colorado | 16.6¢ | $1.12 | $142 | $194 | $52 |
| Minnesota | 16.3¢ | $1.09 | $139 | $189 | $50 |
| New Mexico | 15.3¢ | $1.03 | $131 | $178 | $47 |
| Connecticut | 27.4¢ | $1.62 | $234 | $280 | $46 |
| New Jersey | 23.7¢ | $1.43 | $203 | $247 | $44 |
| Wisconsin | 18.8¢ | $1.16 | $161 | $201 | $40 |
| Illinois | 18.9¢ | $1.15 | $162 | $199 | $37 |
| Montana | 13.9¢ | $0.89 | $119 | $154 | $35 |
| Idaho | 12.8¢ | $0.77 | $109 | $133 | $24 |
| Michigan | 21.3¢ | $1.11 | $182 | $192 | $10 |
| Alaska | 26.9¢ | $1.32 | $230 | $228 | -$2 |
Method: heat pump = 855 kWh/yr, the median rated use of 176 ENERGY STAR integrated 50-gallon heat pumps (DOE medium draw). Gas tank = 173 therms/yr, the DOE medium draw load (55 gal/day, 67°F rise) at UEF 0.64. Prices: EIA residential averages (EIA, 12-month avg. through Aug 2026). Real bills vary with usage, inlet water temperature, and where the unit sits.
Upfront cost
Typical installed cost: about $1,500 for a 50-gallon gas tank (range $900 to $2,500) versus about $3,600 for a 50 to 65-gallon heat pump (range $2,000 to $4,500). Switching from gas usually adds a 240V circuit ($300 to $1,100) unless you choose a 120V plug-in model. Utility rebates can close much of the gap, but since May 29, 2026 the federal HEAR rebate no longer covers replacing a gas water heater.