Oil vs Electric Water Heater Calculator

Annual Water Heater Cost Comparison

Annual Operating Costs

Oil Water Heater Cost
Electric Water Heater Cost
Calculations are estimates based on input values, typical system efficiencies, and a $70^\circ F$ temperature rise (e.g., $50^\circ F$ to $120^\circ F$).

Why Compare Oil and Electric Water Heaters?

Hot water is one of the biggest energy expenses in a home, typically accounting for 15–20% of utility bills. The system you choose plays a huge role in both cost and efficiency:

  • Oil water heaters
    • Usually paired with oil-fired boilers or furnaces
    • Depend on the price of heating oil, which can fluctuate seasonally
    • Efficiency ranges from older models (75%) to modern high-efficiency units (90%)
  • Electric water heaters
    • Available in standard electric tanks, tankless units, or heat pump water heaters
    • Efficiency is generally higher—standard electric heaters are about 98% efficient, while heat pump water heaters can reach 250% efficiency
    • Operating costs depend on your electricity rates

Because fuel and electricity prices vary by region, the “cheaper” option isn’t the same for everyone. That’s why a calculator is so useful—it uses your local costs and your water usage to give you an accurate picture.

How the Oil vs Electric Water Heater Calculator Works

The calculator estimates annual operating costs by taking into account:

  1. Daily hot water usage (gallons per day)
    • Example: A family of four may use around 50 gallons per day.
  2. Fuel cost inputs
    • Current oil price (USD per gallon)
    • Current electricity price (USD per kWh)
  3. System efficiency
    • Select from different oil heater efficiencies (75%, 85%, 90%)
    • Select from electric heater types (98% for standard, 90% for tankless, 250% for heat pump)
  4. Energy calculations
    • The tool uses standard conversion values for BTUs per gallon of oil and BTUs per kWh.
    • It calculates how much fuel or electricity your heater would need in a year to provide the required hot water.
  5. Annual cost comparison
    • Shows total yearly cost for oil vs electric
    • Highlights potential savings if one option is cheaper than the other

Example: Oil vs Electric Water Heater Costs

Let’s look at a sample scenario using the calculator:

  • Daily hot water use: 50 gallons
  • Oil price: $3.50 per gallon
  • Electricity price: $0.18 per kWh
  • Oil heater efficiency: 85% (standard)
  • Electric heater efficiency: 98% (standard electric tank)

Results:

  • Oil water heater: ~$1,420 per year
  • Electric water heater: ~$1,050 per year
  • Savings with electric: ~$370 per year

In this example, switching to an electric heater would save money annually. However, in areas with high electricity rates and low oil prices, the results could be the opposite.

Advantages of Oil Water Heaters

  • Often more powerful and provide hot water quickly
  • Can tie into existing oil heating systems
  • Work well in colder climates

Advantages of Electric Water Heaters

  • Higher efficiency (especially heat pump models)
  • Easier to install and maintain
  • No need for fuel deliveries or on-site tanks
  • Can be paired with renewable energy like solar panels

When Should You Switch?

The decision depends on more than just the calculator results. Consider:

  • Fuel price trends – Oil prices can rise and fall quickly. Electricity costs are usually more stable.
  • Upfront cost – Electric heat pump water heaters cost more upfront but save more long term.
  • Home setup – If your home already runs on oil, sticking with oil may be simpler. If you’re moving toward electrification, switching makes sense.
  • Environmental impact – Electric heaters (especially heat pumps) reduce carbon emissions compared to oil.

Try the Calculator for Yourself

Instead of guessing, use the Oil vs Electric Water Heater Calculator to get personalized results. Just enter your daily hot water usage, local oil price, and electricity rate, then select your system efficiency. Within seconds, you’ll see:

  • Annual oil heating cost
  • Annual electric heating cost
  • Your potential savings

This tool makes the comparison simple, so you can make a smart, cost-effective choice for your home.