Initial Expense

• Electric hot water heaters are less expensive to purchase than their propane heated counterparts. The price of hot water heaters varies depending on how many gallons the unit will heat and how quickly, but propane heaters will run about 20 to 35 percent more than a similarly featured electric hot water heater.
  
  

Operating Expenses

• Propane costs less per unit than electricity, so utility bills could be smaller with propane. Although energy costs fluctuate and vary by region, electricity is almost always higher than propane, averaging about 33 percent more. The link provided in the Resources section of this article provides more detail on average energy costs for hot water heaters.
  
  

Efficiency

• Electric hot water heaters operate at efficiency levels approaching 100 percent whereas propane units are in the 80 to 85 percent range. That means less energy is wasted with electric hot water heaters than with propane.
  
  

Recovery Time

• Recovery time is the volume of water a hot water heater can bring to 90 degrees in one hour. Propane fired systems are almost twice as fast at this task as electric hot water heaters.
  
  

Energy Availability

• Propane systems will need a gas line connected to the hot water heater from a propane storage tank. These lines are usually run from pipes supplying other propane fired appliances like furnaces. Electric heaters will need access to a 220-volt power outlet.
  
  

Flue

• When propane is consumed, it produces carbon monoxide and other gasses in the combustion process. These gasses will need to be vented outside the home through a flue. Electric hot water heaters do not need to be vented.