Is an Efficient Electric Water Heater Worth It in Canada? (2026)
With electricity at 14.0¢ per kWh in Canada, replacing a working electric water heater takes 4.7 years to pay back, which is slow. When yours needs replacing anyway, the extra cost of the efficient model comes back in 2.8 years.
An efficient electric water heater cuts electricity by 70%: about 3,066 kWh, worth C$429.24 a year in Canada. Worth it when replacing
- From
- Resistance tank water heater, about 4,380 kWh a year
- To
- ENERGY STAR heat pump water heater, about 1,314 kWh a year
- Usage
- Hot water for a family of four
| Scenario | You pay | Payback | Net over its life |
|---|---|---|---|
| Replace a working electric water heater now | C$2,000 | 4.7 years | C$3,580 |
| Replacing anyway: choose the efficient one | C$1,200 | 2.8 years | C$4,380 |
Prices are typical figures; type your own quotes above. Net over its life is the total saving over the years it lasts minus what you pay. It ignores inflation, interest and changes in electricity prices, which is conservative while prices are rising.
Our take
Worth it for most households with electric hot water, especially when the old tank is due for replacement anyway. Needs a space that stays above about 5 C.
How the two models compare
| Inefficient | Efficient | |
|---|---|---|
| Model | Resistance tank water heater | ENERGY STAR heat pump water heater |
| Electricity per year | 4,380 kWh | 1,314 kWh |
| Cost per year here | C$613.20 | C$183.96 |
| Over 13 years | C$7,972 | C$2,391 |
Usage behind these figures: hot water for a family of four. Basis: ENERGY STAR: heat pump water heaters use about 70% less electricity than standard electric tanks, about $550 a year for a family of four at US prices. The Electric Water Heater page prices the appliance at its own typical hours, which you can change there.
The same upgrade in other countries
| Country | Saving per year | Payback, replacing now | Payback, replacing anyway | Verdict |
|---|---|---|---|---|
| United States (average) | $562.30 | 3.6 years | 2.1 years | Worth it when replacing |
| United Kingdom | £806.97 | 2.5 years | 1.5 years | Worth it now |
| Germany | €1,134 | 1.8 years | 1.1 years | Worth it now |
| France | €613.51 | 3.3 years | 2.0 years | Worth it when replacing |
| Australia | A$1,073 | 1.9 years | 1.1 years | Worth it now |
| Canada (average) | C$429.24 | 4.7 years | 2.8 years | Worth it when replacing |
Local electricity prices, with the same purchase price read in local currency, which is a simplification. The saving column is what matters: the higher the price of electricity, the faster any upgrade pays back.
Other upgrades in Canada, fastest payback first
- LED Light Bulbsaves C$13.16 a year · worth it now
- Dehumidifiersaves C$75.60 a year · worth it when replacing
- Pool Pumpsaves C$196.56 a year · worth it when replacing
- Wi-Fi Routersaves C$14.70 a year · worth it when replacing
- Electric Sauna Heatersaves C$237.58 a year · not for the electricity
- Chest Freezersaves C$43.40 a year · worth it when replacing
- Hot Tubsaves C$357.70 a year · not for the electricity
- Clothes Dryersaves C$63.00 a year · worth it when replacing
- Air Conditionersaves C$35.00 a year · worth it when replacing
- Refrigeratorsaves C$60.20 a year · worth it when replacing
- Desktop Computersaves C$42.98 a year · not for the electricity
- Space Heatersaves C$126.00 a year · not for the electricity
- Electric Stovesaves C$20.44 a year · not for the electricity
- Dishwashersaves C$19.60 a year · not for the electricity
- Washing Machinesaves C$13.30 a year · not for the electricity
- Televisionsaves C$10.22 a year · not for the electricity