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Gas Water Heaters vs. Electric Water Heaters: What's the Best Choice for Your Business?

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Choosing a water heater for your business is a big decision--and whether you're upgrading an existing model or you're building your business from the ground up, you want to be sure that you're choosing the right one. 

That means taking into consideration several key factors: 

  • Amount of energy needed to keep water hot
  • How much hot water you actually need for your business (hint: if hot water's primary use is to allow employees to wash their hands in warm water, chances are, you won't need as much as an industrial kitchen that needs to be able to wash dishes on hot every day!)
  • What type of space you want to fit the water heater in
  • ...and more. 

This basic guide will help you make sure that you're choosing the best hot water heater for your business. 

Energy Use

Gas water heaters are typically less efficient than electric models.

Not only will gas water heaters occasionally need to vent some of the steam from too much heat, which means that they'll lose heat in the process, but require more energy in order to produce the necessary heat.  

The Cost

The upfront cost of purchasing a gas water heater is often more expensive than purchasing an electric water heater, which may be enough to make you seriously consider turning to an electric model instead. 

For the tank alone, you may find that opting for a gas model adds between $50-$200 to the model of hot water heater you're considering. 

Installation costs will vary based on your area and on the type of hookups and lines that are already installed in your building. You should note, that making the switch from gas to electric or electric to gas will be more expensive during that first year. 

The cost savings from using gas instead of electricity, however, can be significant, especially depending on your area. Typically, a gas water heater will pay for the additional cost within a single year of operation. Make sure to take a careful look at energy prices in your area and how they have the potential to impact this cost before making a decision based on cost savings alone. 


When you install a hot water heater for your business, you want to be sure that it will stand the test of time. Fortunately, both gas and electric water heaters have a reasonable life expectation: 12 years for an electric model and 13 years for a gas model. Whichever model you choose, you can enjoy the assurance that it will work well for your business long-term. 


There are plenty of reasons to consider the safety of your hot water heater before installation. Opting for a gas model means that you need to pay more attention to safety features for several key reasons. First and foremost, you have to remain vigilant about gas leaks, installing detectors that will notify employees the moment gas levels in your facility start to rise. It's also important to note that gas water heaters will need to vent heat periodically by releasing steam, so the location of your water heater in relation to your employees is also important to consider. 


Businesses that use a minor amount of hot water on a regular basis won't need high performance from their hot water heaters, while businesses that move large quantities of hot water on a regular basis will need a hot water heater with much higher performance ratings. 

Gas water heaters, in general, tend to be able to heat water faster than their electric counterparts. When you're choosing a water heater, however, take a look at the heater's first-hour rating--that is, the actual amount of hot water that the heater is able to produce in a specified quantity of time. If you're trying to wash an industrial quantity of dishes, it's important to have a water heater that can quickly produce higher quantities of water, not just one that has a high capacity. 

Space Requirements

If you're trying to tuck your hot water heater into a tight space, you'll want an electric model. Electric water heaters don't require a release valve, which means that they can be tucked into smaller areas than gas models. 

Take a look at your available space, including how the space around the hot water heater will be used. 

Will the water heater be placed in a storage area? A closet of its own? Or an area that is often filled with employees taking care of daily tasks?

Before deciding whether a gas or electric water heater is the right choice for you - be sure you consider the placement of it. 

Choosing an Energy-Efficient Hot Water Heater

Your hot water heater is a great place to improve the overall energy-efficiency of your business and make sure that you're saving as much energy as possible. Not only is energy expensive, you want your business to be as green as possible. Make sure you're asking these key questions when choosing your hot water heater.

How much water do you use during peak hours? 

Consider the time when your business is busiest and using the most hot water. 
How much hot water are you likely to go through during this time? 
What's the most hot water your business could use, assuming peak functionality?

Is a tankless water heater right for you? 

While the up-front cost of a tankless water heater may be more than a traditional tank model, it will also ensure that you're only heating the water that you actually use. Many tankless water heaters are designed to be efficient enough for commercial buildings. Check into the products available in your area to determine how efficient they will be for your building. These models are considerably more energy-efficient than other available models.

How many fixtures do you have that require hot water? 

This can include everything from sinks to tubs, pools, dishwashers, and more. Consider what fixtures throughout your building use hot water. 
A hotel, for example, may have several rooms that need access to hot water at the same time, while an office building may have a single dishwasher tucked into the break room.

Where are you located? 

Your geographic location will have a big impact on the natural temperature in your area, which will in turn impact the temperature of the water as it's moved into your water heater. If you live in a particularly cold region, you may need a water heater with a higher efficiency rating than a business that is set up in a warmer region. 

It's important to consider  how much water is needed if all of your fixtures are turned on at the same time and demanding hot water immediately, and how fast you need your tank to be able to produce more hot water. 

A larger tank won't necessarily produce hot water faster than a small one; it will just provide a larger source for that initial supply of hot water. In some cases, a smaller tank may be more efficient than a large one. 

If you're struggling with the size of hot water heater that's right for your business, don't just guess. You may end up with a water heater that's much larger or produces much more hot water than your business actually needs. 

Instead, consider working with a professional in order to determine how much hot water your business really needs. 

Decreasing Energy Use and Lowering Your Bill

When it comes to your energy use, lower is always better--and that includes the energy needed to heat the water for your business. There are several strategies you can use to help improve the efficiency of your hot water heater and ensure that your business isn't using excessive amounts of energy to provide that heat. 

  • Drop the temperature. Are you using your hot water to sanitize dishes and other items? If not, you can probably keep the thermostat on your hot water heater set to 120 degrees Fahrenheit. Each 10 degree reduction can save between 3-5% of your water heating bill
  • Check the insulation on your pipes. Insulated pipes will deliver hot water more efficiently, which means less energy lost in the process.
  • Fix your leaks. Any time there's a leak in your hot water lines, you're losing money for your business. 
  • Institute energy-efficient policies. Make sure the dishwasher in the break room only runs when it's full, for example. 
  • Use low-flow fixtures in your sinks.
  • Purchase appliances with an Energy Star rating, which are more efficient in terms of both energy use and water use. 

While you may not be able to eliminate this regular cost entirely, choosing the right hot water heater can make a big difference in your business's energy use over the course of the year. By carefully researching your options, you can significantly improve the efficiency of your hot water heater.

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Posted: January 17, 2018