Rhode Island electricity is expensive, which changes the usual answer. Here is a simple worked estimate with the assumptions out in the open, so you can swap in your own numbers.
Get Connected Or call now: (401) 324-9590If you already have gas, keeping gas is usually the simple choice. If you have an electric tank today, a heat pump water heater is the upgrade that saves real money. If you have neither, the decision turns on whether gas service is available at your address and what you want to spend upfront.
These are the two inputs that matter most, both from the U.S. Energy Information Administration (EIA).
Your own bills are better data than any average. Look at your per-kWh and per-therm totals, delivery charges included.
We used one household and changed only the water heater. The assumptions are ours, stated so you can check the math.
| Type | Efficiency assumed | Energy used per year | Cost per year |
|---|---|---|---|
| Standard electric tank | 0.93 | about 4,030 kWh | about $1,180 |
| Heat pump water heater | 3.3 / 2.5 | about 1,135 / 1,500 kWh | about $330 to $440 |
| Gas tank (ENERGY STAR) | 0.64 | about 200 therms | about $420 |
| Gas tankless (ENERGY STAR) | 0.87 | about 147 therms | about $310 |
What this tells you. Moving from a standard electric tank to a heat pump water heater saves roughly $740 to $850 a year in this scenario. Gas and heat pump land close together, with the heat pump roughly even with a gas tank in the conservative case. The estimate does not include the fixed monthly gas service charge, which applies if the water heater is your only gas appliance and you would otherwise have no gas account. It also does not include maintenance.
Sensitivity. If your gas price runs 25 percent higher than the figure we used (about $2.61 per therm), the gas tank rises to roughly $520 a year and the tankless to roughly $385, which tilts the comparison toward the heat pump. Smaller households use less and see smaller gaps. Electricity price changes affect electric and heat pump units the same way, in proportion.
| Electric tank | Gas tank | Heat pump | |
|---|---|---|---|
| Typical installed cost* | $600 to $3,500 | $700 to $2,700 | $1,200 to $3,500 |
| 2026 RI Energy rebate | None listed | $70 (ENERGY STAR) | Up to $625 if replacing electric |
| Venting | None | Required, can add $300 to $1,000 | None, but needs air space |
| Needs | 240-volt circuit | Gas line and vent | 240-volt circuit, space, drain |
| Avg. unit life (RI Energy) | Not listed | 15 years | 10 years |
*National typical ranges from HomeAdvisor, not Rhode Island quotes. See our cost guide.
Recovery is how quickly a tank reheats after you drain it. Gas wins here because a burner puts in far more heat than an electric element. As a rough comparison, a typical gas tank has about a 40,000 BTU per hour burner (Rheem uses 40,000 BTU as its example), while a common 4,500 watt electric element delivers about 15,400 BTU per hour. That is more than twice the heat input per hour for gas, even after allowing for burner losses. Heat pump water heaters reheat slowly in heat-pump-only mode, and most have a hybrid or high-demand mode that uses their backup elements when you need hot water quickly. If your household stacks showers and laundry back to back, tank size matters more than fuel.
A heat pump water heater moves heat out of the surrounding air into the tank instead of generating it directly. ENERGY STAR says it should sit in an interior space that stays between 40 and 90 degrees Fahrenheit year-round and have 1,000 cubic feet of air around it, and that in hot humid weather it can help cool and dehumidify the space. A basement or large utility room is typical. In winter the unit pulls heat from that room, so some of it comes back out of your heating system. A closet or a very cold space is a poor fit.
Rhode Island Energy also lists the average life of a heat pump water heater at 10 years, versus 15 for a gas tank, so figure the shorter life into the savings.
| Your situation | Usually the better fit |
|---|---|
| You have gas service and a working vent | Gas tank. Simple swap, lowest running cost for the money. |
| You have an electric tank, a basement or large utility room | Heat pump water heater. Biggest operating savings, plus a rebate of up to $625. |
| Electric tank in a tiny closet or very cold space | Another electric tank, or ask your plumber about options. Expect higher running cost. |
| Gas now, going all-electric | Heat pump water heater. Rhode Island Energy's heat pump rebate does not apply to replacing gas, but Clean Heat RI may pay $2,500 for income-qualified households. See the rebates guide. |
| Big household, lots of back-to-back demand | Gas tank or tankless gas. See the tankless guide. |
| No gas at your address | Heat pump if it fits, electric tank if it does not. |
RI Water Heaters is a referral service. We do not install anything. We connect you with a local Rhode Island plumber who can look at your venting, electrical panel, and space and tell you what will really work.
In our worked estimate for a household using 60 gallons a day, a standard electric tank costs about $1,180 a year, a gas tank about $420, and a heat pump water heater about $330 to $440. These use EIA average Rhode Island prices (29.22 cents per kWh and $21.66 per thousand cubic feet of gas). Your bills will differ.
It usually is if you are replacing an electric tank and have a basement or utility room with enough space. It can cut electricity use by roughly two thirds versus a standard electric tank, and Rhode Island Energy lists rebates of up to $625 in 2026. It is a weaker choice for a small, cold closet.
Yes, but check the details. You need a 240-volt circuit, and the old gas line and vent need to be dealt with properly. Rhode Island Energy's heat pump rebate excludes replacing gas units, while Clean Heat RI offers $2,500 to households under 150 percent of state median income, with pre-approval required.
Gas. A typical gas burner puts in far more heat per hour than a standard electric element, so a gas tank reheats faster after heavy use. Heat pump water heaters are slower in efficiency mode and use backup elements in faster modes.
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Figures on this page come from the sources below. Prices and program terms change, so confirm with the program or a plumber's written quote before you decide.