Different fuels, so UEF is not apples-to-apples. A 3.50 UEF heat pump and a 0.96 UEF gas tankless measure efficiency against different baselines. Annual operating cost is the only fair comparison.
The core trade-off
Heat pumps win on operating cost in most states because they move heat instead of creating it. Gas tankless wins on lifespan, space efficiency, and delivery rate. The right choice depends on your fuel situation, your space, and how long you plan to stay in the home.
Avg heat pump cost
$193/yr
27 models at US avg rates
Avg gas tankless cost
$242/yr
4 models at US avg rates
Operating cost gap
20%
lower for heat pump at national avg
Annual operating cost by model
We compare 27 published heat pump models against 4 condensing gas tankless models. Costs use U.S. average energy prices (EIA, 2025-12).
| Model | Type | UEF | Capacity | Annual | 10-Year |
|---|---|---|---|---|---|
| HPTS-50-2 | Heat Pump | 3.80 | 46 gal | $143/yr | $1,430 |
| RE2HP50-1NCTT | Heat Pump | 3.89 | 45 gal | $144/yr | $1,440 |
| NWP500S050AUMB | Heat Pump | 3.85 | 44 gal | $145/yr | $1,450 |
| PROPH50 T2 RH400-30 | Heat Pump | 3.88 | 45 gal | $146/yr | $1,460 |
| REHP50BM | Heat Pump | 3.75 | 46 gal | $146/yr | $1,460 |
| PROPH40 T2 RH400-30 | Heat Pump | 3.83 | 36 gal | $148/yr | $1,480 |
| HPTA-50-2 | Heat Pump | 3.68 | 46 gal | $152/yr | $1,520 |
| HPTA-40-2 | Heat Pump | 3.60 | 36 gal | $156/yr | $1,560 |
| NHP50 | Heat Pump | 3.46 | 47 gal | $162/yr | $1,620 |
| RE2H50S | Heat Pump | 3.44 | 45 gal | $163/yr | $1,630 |
| NHP65 | Heat Pump | 3.34 | 57 gal | $168/yr | $1,680 |
| RE2HP65-1NCTT | Heat Pump | 4.20 | 65 gal | $204/yr | $2,040 |
| PROPH65 T2 RH400-30 | Heat Pump | 4.05 | 59 gal | $204/yr | $2,040 |
| PROPH80 T2 RH400-30 | Heat Pump | 4.07 | 72 gal | $209/yr | $2,090 |
| REHP80BM | Heat Pump | 4.00 | 75 gal | $211/yr | $2,110 |
| HPTS-66-2 | Heat Pump | 3.70 | 67 gal | $213/yr | $2,130 |
| RE2HP80-1NCTT | Heat Pump | 4.00 | 75 gal | $214/yr | $2,140 |
| REHP65BM | Heat Pump | 3.90 | 60 gal | $214/yr | $2,140 |
| NWP500S065AUMB | Heat Pump | 4.03 | 61 gal | $215/yr | $2,150 |
| NWP500S080AUMB | Heat Pump | 4.05 | 74 gal | $218/yr | $2,180 |
| HPTA-80-2 | Heat Pump | 3.88 | 81 gal | $220/yr | $2,200 |
| HPTS-80-2 | Heat Pump | 3.88 | 82 gal | $220/yr | $2,200 |
| HPTA-66-2 | Heat Pump | 3.84 | 68 gal | $223/yr | $2,230 |
| RE2H65T | Heat Pump | 3.64 | 64 gal | $235/yr | $2,350 |
| RE2H80T | Heat Pump | 3.59 | 75 gal | $238/yr | $2,380 |
| NPE-210S2 | Gas Tankless | 0.96 | 5.3 GPM | $239/yr | $2,390 |
| NPE-240S2 | Gas Tankless | 0.96 | 5.8 GPM | $239/yr | $2,390 |
| T-H3J-OS-N-1 | Gas Tankless | 0.95 | 4.7 GPM | $242/yr | $2,420 |
| NHP80 | Heat Pump | 3.48 | 74 gal | $245/yr | $2,450 |
| RTGH-95DVLN-3 | Gas Tankless | 0.93 | 9.5 GPM | $250/yr | $2,500 |
| NHP120 | Heat Pump | 3.38 | 109 gal | $253/yr | $2,530 |
Electricity: 17.24¢/kWh. Gas: $1.36/therm. UEF measures efficiency within fuel type and is not comparable across types.
Installation comparison
These are fundamentally different installations. One is a floor-standing electric appliance. The other is a wall-mounted gas appliance. Switching between them means changing fuel infrastructure.
| Heat Pump | Gas Tankless | |
|---|---|---|
| Fuel | Electricity (240V/30A circuit) | Natural gas (often needs 3/4-inch line upgrade) |
| Venting | None required | PVC or CPVC for condensing; stainless steel for non-condensing |
| Condensate drain | Required (dehumidification byproduct) | Required for condensing units (acidic condensate, may need neutralizer) |
| Space | Floor-standing, 750-1,000 cu ft air space needed | Wall-mounted, compact (27 x 18 x 10 in typical) |
| Typical installed cost | $2,000-$4,500 | $2,700-$5,500 |
| Expected lifespan | 13-15 years | 20-25 years |
| Maintenance | Minimal; anode rod every 3-5 years | Annual descaling in hard water areas; venting inspection |
When each type wins
Heat pump wins when
- Electricity is average or cheap in your state
- You have garage, basement, or utility room space
- You want to eliminate gas from the home
- State rebates bring the installed cost down
- You value lower operating cost over longer equipment life
Gas tankless wins when
- Gas is cheap and electricity is expensive in your state
- Space is tight and you need wall-mounted
- You need high flow rates for simultaneous fixtures
- You already have adequate gas service
- You want the longest possible equipment lifespan
State-specific operating costs
The cost gap between heat pumps and gas tankless shifts dramatically by state. Cheap electricity favors heat pumps. Cheap gas favors tankless. See your state's numbers:
- Alaska
- Alabama
- Arkansas
- Arizona
- California
- Colorado
- Connecticut
- District of Columbia
- Delaware
- Florida
- Georgia
- Hawaii
- Iowa
- Idaho
- Illinois
- Indiana
- Kansas
- Kentucky
- Louisiana
- Massachusetts
- Maryland
- Maine
- Michigan
- Minnesota
- Missouri
- Mississippi
- Montana
- North Carolina
- North Dakota
- Nebraska
- New Hampshire
- New Jersey
- New Mexico
- Nevada
- New York
- Ohio
- Oklahoma
- Oregon
- Pennsylvania
- Rhode Island
- South Carolina
- South Dakota
- Tennessee
- Texas
- Utah
- Virginia
- Vermont
- Washington
- Wisconsin
- West Virginia
- Wyoming
Common questions
Is a heat pump water heater cheaper to run than gas tankless?
At national average energy prices, heat pumps average $193/yr versus $242/yr for gas tankless across our published models. That is about 20% less per year. But local rates change the math. In states where gas is cheap and electricity is expensive, gas tankless can be competitive or even cheaper to operate.
Can I switch from gas tankless to heat pump?
Yes, but it is not a drop-in swap. You will need a dedicated 240V/30A electrical circuit ($300-$1,100 if no existing circuit), a condensate drain, and a floor location with at least 750 cubic feet of air space. The gas line can be capped and the vent removed. Budget $500-$2,500 for the electrical and plumbing changes on top of the unit cost.
Which lasts longer?
Gas tankless units typically last 20-25 years with annual maintenance. Heat pump water heaters last 13-15 years. Gas tankless has the longer lifespan, but heat pumps avoid combustion-related maintenance like descaling, venting inspection, and burner cleaning.
What about homes with no gas service?
If your home has no gas line, heat pump is the clear choice. Running a new gas line ($1,000-$3,500) to install a tankless unit rarely makes economic sense compared to a heat pump that uses your existing electrical service.
Which is quieter?
Gas tankless units are nearly silent when not firing and produce a brief ignition sound during use. Heat pump water heaters run a compressor at 40-55 dBA (comparable to a conversation) for several hours per day. If the unit is near living space, noise may be a factor.
Your next step
Sources. ENERGY STAR certified product data, manufacturer spec sheets, EIA average residential energy prices (2025-12), installation cost data from Angi, HomeGuide, and HomeAdvisor. Methodology