Gas vs Electric Water Heater in New Mexico: Which One Costs Less to Run?
If natural gas reaches your house, a gas tank water heater costs less to run in New Mexico. EIA prices put natural gas at about 95 cents a therm. The same heat bought as electricity costs about $4.50.
An electric tank wastes less of the energy it buys, but not enough to close that gap. Electric still costs less to put in, and it is the simple choice where no gas line reaches the house. With propane, your supplier’s price decides it.
What does each fuel cost in New Mexico?
Natural gas averaged $9.83 per thousand cubic feet for New Mexico homes in 2025, by EIA figures. The EIA’s conversion makes that about 95 cents a therm. A therm is 100,000 Btu.
Electricity averaged 15.34 cents a kilowatt hour for the year through August 2026. A therm’s worth of heat is about 29.3 kilowatt hours, or about $4.50. That is about 4.7 times the gas price, before efficiency.
Propane is sold by the gallon at your supplier’s price. A gallon holds 91,452 Btu, so about 1.1 gallons make a therm. Multiply your price per gallon by 1.1 to compare.
Fuel is half the decision, and the install is the other half. Our water heater installation page covers what a new tank involves.
How do gas, propane and electric tanks compare?
| What matters | Natural gas tank | Propane tank | Electric tank |
|---|---|---|---|
| Fuel price | About 95 cents a therm | Supplier price, about 1.1 gallons a therm | About $4.50 a therm’s worth |
| Federal minimum efficiency, 50 gallons | About 0.56 to 0.63 | A gas tank, rated the same way | About 0.92 to 0.93 |
| Recovery, 50 gallons | Hot water often in 30 to 40 minutes | Same as natural gas | 1 to 2 hours to heat the tank |
| Venting | Vent to the outside, air to burn | Same as natural gas | None |
| Power outage | Can keep heating; some models need power | Same as natural gas | Stops heating |
| Install needs | Gas line and vent | Propane line and vent | 240 volt circuit, 30 amp breaker |
The efficiency number is the uniform energy factor, and federal rules set a minimum for every tank. These ranges cover the medium and high use classes. An electric tank turns nearly all its energy into hot water, while a gas tank loses some up the flue.
Run New Mexico prices through those ratings, and electric hot water still costs about three times as much as gas. One national cost guide puts a 50 gallon tank at $20 to $35 a month on gas. Electric runs $40 to $60. Gas also recovers faster and tends to score better on the first hour rating, another guide says.
What does it cost to install a gas or an electric water heater?
These are market numbers from national cost guides, not our price list. Gas costs more to put in because of the gas line and the venting.
| What you are paying for | National cost guide range |
|---|---|
| Gas or electric tank, typical full install | $550 to $1,500 |
| Electric tank compared with gas | $100 to $200 less |
| 50 gallon electric tank, installed | $700 to $1,800 |
| 50 gallon gas tank, installed | $1,000 to $3,100 or more |
| New gas line when switching to gas | $260 to $820 |
| Venting for a gas unit | $500 to $1,500 |
| Permit fees, gas line or electrical work | $50 to $150 |
What happens to each one in a power outage?
An electric tank stops heating when the power goes out, unless a backup generator runs it. A gas tank can keep heating, one national guide says. Newer models with an electric starter and power vent models with an electric blower can stop, though.
Gas can go out too. In the February 2011 cold snap, gas utilities cut service to over 30,000 New Mexico customers. Bernalillo and Placitas were among the areas hit.
What changes when you switch from electric to gas, or back?
Switching to gas means a gas line and a vent. One national guide puts a new gas line at $260 to $820. It says a gas heater put in from scratch can cost up to $2,000 to install. We run the gas line and pressure test it.
Switching to electric means a 240 volt circuit with a 30 amp breaker. The same guide says it likely means a panel upgrade too. A licensed electrician handles that, and we handle the plumbing side.
Permit fees can apply either way, and we handle the permit paperwork with you. At near 6,700 feet in Edgewood, a gas unit also has to suit the altitude. The high altitude question is covered in our water heater replacement cost guide.
Who has natural gas, and where is propane common?
In Albuquerque, about three homes in four heat with utility gas, by Census estimates. New Mexico Gas Company is the metro’s gas utility. Its rebate site lists up to $500 on gas water heaters for its residential customers.
Its terms call for a new unit put in by one of its participating contractors. The company says a qualifying heater can cut energy use up to 30 percent, worth up to $50 a year.
E.M.W. Gas, formed by Estancia, Moriarty and Willard, supplies natural gas in an area that runs west to Edgewood. That rebate is for New Mexico Gas Company customers, so check whose name is on your gas bill.
Propane is common in the East Mountains. About one Edgewood home in six heats with propane, by Census estimates.
Does a heat pump water heater change the math?
It can. A heat pump water heater is an electric tank that pulls heat from the air around it. One national guide calls it up to four times more efficient than a standard electric tank. At four times, it would cost less to run than a gas tank at these prices.
The same guide puts a 50 gallon unit at $2,300 to $4,400 installed. It also needs plenty of open air around it to draw heat from.
New Mexico’s HEAR program pays up to $1,750 toward one. Households qualify with income under 80 percent of the county’s area median, or through certain benefit programs. The unit must be an ENERGY STAR model, put in by a contractor the program authorizes. You apply before you buy.
The federal tax credit for heat pump water heaters covered improvements made through December 31, 2025. Some cost guides still list it.
Which water heater fits your house?
Gas fits a house that already has a gas line and uses a lot of hot water. Electric fits a house with no gas, or a tight spot with no easy vent run. A heat pump unit is worth a look if you qualify for HEAR.
We put in new tank water heaters, gas and electric, and we do maintenance on water heaters worth keeping. If yours might still be fixable, start with water heater repair. For hot water on demand, see tankless water heaters.
Wright Flow Plumbing and Heating is based in Edgewood. We work Albuquerque, Rio Rancho, Corrales, the East Mountains and about 70 miles around. Water heater calls come in all the time, storm or not, and we take emergency calls 24 hours a day. See what a new water heater install includes, then call (505) 306-8285 for a free estimate.