What does a condensing gas tank cost to run per year?

About $176 at $1.20 per therm, heating 55 gallons a day through a 70 F rise at a 0.8 UEF. Your own figure moves most with daily hot water use, which varies far more between households than efficiency does between units in the same category.

What is UEF and where do I find it?

UEF is the DOE Uniform Energy Factor, the ratio of hot water energy delivered to energy consumed, measured over a standard daily draw pattern. It is printed on the yellow EnergyGuide label and in the specification sheet. Because the test runs a whole day it already includes standby loss through the tank walls.

Why is the UEF lower than the burner efficiency?

Because the UEF test runs a whole day and includes standby loss, while thermal efficiency measures only what the burner puts into the water while it is running. A burner at 80 percent thermal efficiency on a tank that loses heat through its walls all night shows a UEF well below that.

Does a bigger tank cost more to run?

A little, through standby loss, but far less than people expect on a modern foam insulated tank. The energy to heat the water you actually use dominates the bill, and that is the same whatever size the tank is. Standby loss is a reason not to buy a much larger tank than you need, not a large number on its own.

What is the cheapest way to reduce this bill?

In order: use less hot water, insulate the first stretch of hot outlet pipe, lower the setpoint if the scald and Legionella tradeoff allows it, and only then consider a more efficient heater. The first two cost almost nothing and work immediately, while the last one has a payback measured in years.

Running cost

What Does a Condensing gas tank Cost to Run at $1.20 per therm?

Researched from the DOE test procedures, NFPA 54 and NEC code tables, and manufacturer specifications. Updated 2026-09-17.

Quick answer

A condensing gas tank at a typical 0.8 UEF, heating 55 gallons a day through a 70 F rise, costs about $176 a year at $1.20 per therm. That is 146 therms a year, or about $0.48 a day.

Water heating is usually the second largest energy use in a house after space conditioning, and almost all of the variation between households comes from two numbers: how much hot water they use and what their fuel costs.

This page holds the usage at 55 gallons a day through a 70 F rise and the efficiency at a 0.8 UEF, then reads the cost at $1.20 per therm: about $176 a year.

Where the figure comes from

Annual running cost build-up, condensing gas tank
Step	Figure
Hot water per day	55 gal
Temperature rise	70 F
Heat delivered per day	32,071 BTU
UEF	0.8
Energy input per year	14,632,166 BTU
therms per year	146
Price per unit	$1.20
Cost per year	$176

Published standard Source: DOE Uniform Energy Factor as the divisor on delivered energy, with published energy content per fuel unit. UEF is measured over a standard daily draw pattern and already includes standby loss, which is why it is always lower than a burner thermal efficiency.

How condensing gas tank compares at this price

Every heater type at its typical UEF, on the same 55 gallons a day and the same 70 F rise. Fuel prices differ between these, so this is a comparison of efficiency rather than of bills.

Annual cost by heater type at typical UEF
Heater type	Typical UEF	Energy per year	Unit
Electric resistance tank	0.92	3,729	kWh
Heat pump water heater	3.5	980	kWh
Atmospheric gas tank	0.6	195	therm
Condensing gas tank	0.8	146	therm
Condensing gas tankless	0.93	126	therm
Propane tank	0.6	213	gallon of propane

Published standard Source: DOE UEF figures typical of each category, applied to the same delivered energy. Multiply the energy column by your own fuel price to get a comparable bill. A heat pump UEF above 1 is not an error: it moves heat rather than making it.

The same heater across the price range

Condensing gas tank annual cost by fuel price
Price per therm	Cost per year	Cost per day
$0.80	$117	$0.32
$1.20	$176	$0.48
$1.60	$234	$0.64
$2.20	$322	$0.88

Published standard Source: The same energy calculation at each price point. Fuel prices vary regionally by more than efficiency does between units in the same category, which is why a general answer about the cheapest fuel is not worth much.

The input to change first

Gallons per day, every time. This page assumes 55, which is a planning convention rather than a measurement of your house, and household hot water use varies more than any other input here. A two person household using 30 gallons a day pays close to half this figure for the same heater at the same price.

Put your own numbers into the operating cost calculator, and if you are weighing an upgrade, the payback calculator compares two UEFs directly.

Units in this category, and the cheapest efficiency upgrade there is

Foam sleeve on the first six feet of hot outlet pipe is the best value item on this entire site. It costs less than ten dollars, needs nothing switched on, and cuts the fastest standing heat loss on the system.

Beginner

Rheem

Rheem RTG 7.0 GPM Natural Gas Indoor

$653.77

A 160,000 BTU non-condensing indoor unit, which is the cheapest way into a real brand-name gas tankless with a dealer parts channel behind it.

Best for: A one or two bathroom house in a warm inlet climate

Check price on Amazon

Intermediate

Rheem

Rheem RTG 8.4 GPM Natural Gas Outdoor

$964.10

An outdoor unit needs no flue at all, which removes the single most expensive and most dangerous part of a tankless retrofit in a climate that never freezes hard.

Best for: Warm climate retrofits where running a vent is the problem

Check price on Amazon

Beginner

Frost King

Frost King SP57 R10 Blanket, 48 x 75 in

$32.54

R10 stated on the package, which is the only number worth comparing between blankets. Many listings publish none.

Best for: An older tank that is warm to the touch

Check price on Amazon

Frequently asked questions

What does a condensing gas tank cost to run per year?: About $176 at $1.20 per therm, heating 55 gallons a day through a 70 F rise at a 0.8 UEF. Your own figure moves most with daily hot water use, which varies far more between households than efficiency does between units in the same category.
What is UEF and where do I find it?: UEF is the DOE Uniform Energy Factor, the ratio of hot water energy delivered to energy consumed, measured over a standard daily draw pattern. It is printed on the yellow EnergyGuide label and in the specification sheet. Because the test runs a whole day it already includes standby loss through the tank walls.
Why is the UEF lower than the burner efficiency?: Because the UEF test runs a whole day and includes standby loss, while thermal efficiency measures only what the burner puts into the water while it is running. A burner at 80 percent thermal efficiency on a tank that loses heat through its walls all night shows a UEF well below that.
Does a bigger tank cost more to run?: A little, through standby loss, but far less than people expect on a modern foam insulated tank. The energy to heat the water you actually use dominates the bill, and that is the same whatever size the tank is. Standby loss is a reason not to buy a much larger tank than you need, not a large number on its own.
What is the cheapest way to reduce this bill?: In order: use less hot water, insulate the first stretch of hot outlet pipe, lower the setpoint if the scald and Legionella tradeoff allows it, and only then consider a more efficient heater. The first two cost almost nothing and work immediately, while the last one has a payback measured in years.

Researched guidance, not professional advice. These figures come from published test procedures, code tables and manufacturer specifications, and they are planning numbers rather than a sizing done for your house. Where a manufacturer publishes a figure for the unit in front of you, that figure governs over anything computed here.