Gas vs Electric Water Heater in Ontario

Short answer: In Ontario, a natural gas water heater usually costs less to run than a standard electric tank, because gas is generally cheaper per unit of heat than electricity. Electric tanks cost less to install and need no venting. If your home in the GTA or Southern Ontario already has a gas line, gas is usually the better long-term pick for a 40–60 gallon tank.

The running cost logic

A water heater's running cost comes down to two things: how much energy it uses to heat your water, and what you pay for that energy.

• A standard electric tank turns almost all of its electricity into heat in the water. It's efficient at the tank, but electricity is usually the more expensive way to buy heat in Ontario.
• A gas tank loses some heat up the vent, so it's less efficient at the tank. But natural gas usually costs less per unit of heat, which more than makes up for it in most homes.

Rates change and depend on your utility, time-of-use plan and delivery charges, so we won't quote a yearly figure here. To compare for your own home, look at your Enbridge and electricity bills and the yellow EnerGuide label on any tank you're considering.

One exception: heat pump water heaters are electric but use much less electricity than a standard electric tank. They're a different product with their own space and install needs. We don't sell or install them.

Gas vs electric at a glance

A lower rental rate for electric doesn't mean lower total cost. The rental fee covers the tank; the energy to heat your water is billed separately by your utilities.

What happens in a power outage

This is where people get surprised.

• Electric tanks stop heating the moment the power goes out. You have whatever hot water is already stored, and it cools over time.
• Power vent gas tanks need electricity to run the vent fan and controls. No power, no new hot water.
• Chimney vent (atmospheric) gas tanks vent by natural draft. Many models use a standing pilot and a gas valve that doesn't need household power, so they keep making hot water during an outage. Check your model's manual to be sure.
• Tankless gas heaters need electricity for their controls and fan, so they don't work in an outage.

If outages are common on your street and your home already has a working chimney vent, a chimney vent tank is worth a look. Our power vent vs chimney vent guide explains when each one fits.

Venting: the hidden cost of switching

Gas water heaters must vent their exhaust outside. The type of venting you already have shapes what you can install without extra work.

• Chimney vent uses an existing chimney or B-vent. If your furnace was upgraded to a high-efficiency model, the chimney may no longer be suitable for the water heater alone.
• Power vent uses a fan to push exhaust through plastic pipe out a side wall. Flexible placement, but it needs power and a nearby outlet.
• Condensing tankless vents through plastic pipe and needs a drain for condensate.

Electric tanks need no venting at all, which is why they show up in condos, cottages and homes without gas service. Switching a home from electric to gas means adding a gas line and venting, which adds cost. Switching from gas to electric means adding a suitable electrical circuit.

Which should you choose?

• You already have gas: stay with gas. Lower running costs and faster recovery usually win. Gas tanks start at $2,195 installed with us, before HST.
• You want endless hot water: consider a gas condensing tankless. See our tank vs tankless guide.
• You have no gas service: an electric tank or a heat pump water heater is the practical route. We only install gas water heaters, so you'd need another installer for that job.

Frequently asked questions

Is gas or electric cheaper for hot water in Ontario?

Gas is usually cheaper to run than a standard electric tank, because natural gas generally costs less per unit of heat. Compare your own utility bills and the EnerGuide label on the tank for your home's numbers.

Will my gas water heater work without power?

It depends on the type. Power vent tanks and tankless heaters need electricity. Many chimney vent tanks with a standing pilot keep working in an outage; check your model's manual.

Can I switch from electric to gas?

Yes, if your home has natural gas service. You'll need a gas line to the heater and a venting route. We quote that work before we start.

Do you install electric water heaters?

No. We install gas tank and Rinnai tankless water heaters across the GTA and Southern Ontario, including Toronto, Mississauga, Oakville, Markham, Durham Region, Kitchener-Waterloo, Guelph and Peterborough.

Shop gas tank water heaters · Shop tankless water heaters · Service areas · Call 905-418-2629

Rental rates from Enercare's Ontario water heater rental page, checked September 2026. Energy prices change; check your utility for current rates.