A propane water heater usually costs about the same to buy and install as the identical natural gas model. What natural gas skips and propane cannot: a tank to rent or buy, a regulator, and delivered fuel running roughly $29 per million Btu against about $19 for natural gas, per EIA data from March and May 2026.
Hot Water Brief is an independent cost-research site. We are not a contractor and do not perform the work ourselves.
For the installed price of a natural gas tank by size and venting choice, see the general gas replacement cost breakdown, which covers a straightforward utility hookup. This page is about what changes once propane, rather than a different natural gas venting scenario, is the alternative actually on the table.
Propane and natural gas are metered differently, propane by the gallon and natural gas by the cubic foot or therm, which makes the two hard to compare at a glance. The Energy Information Administration lists propane's heat content at 91,452 Btu per gallon and natural gas at 1,036 Btu per cubic foot. Converting each to a common million Btu basis is arithmetic on those two published figures, not a comparison EIA itself publishes: at EIA's residential propane price of $2.668 a gallon for March 2026 and its residential natural gas price of $19.83 per thousand cubic feet for May 2026, propane works out to about $29 per million Btu delivered against roughly $19 for natural gas, close to one and a half times as much for the same amount of heat.
Natural gas arrives through a buried utility line already regulated to the pressure a water heater needs, so hooking up the appliance is the only new equipment. Propane has no pipeline reaching most homes, so before the water heater is even connected, the job adds a storage tank and its own pressure regulator that natural gas never needs.
Whether you rent or buy that tank changes the math. AmeriGas, one national propane supplier, publishes installation starting around $250 plus a roughly $100 annual rental fee for a rented tank, against purchase and installation starting around $2,000 for an owned one, and puts the break-even between the two at about 17 years, as of an August 2021 comparison. Figures like these come from a single supplier and will vary by region and by who else is quoting the job.
| Option | Published starting cost |
|---|---|
| Rent a tank | About $250 to install, plus roughly $100 a year |
| Buy a tank | Purchase and installation from about $2,000 |
| Break-even, buy vs rent | About 17 years |
Source: AmeriGas, Should You Rent or Buy a Propane Tank, August 3, 2021.
None of that appears on a natural gas quote, because the utility owns the pipe up to the meter and the meter itself already sets the delivery pressure. A propane installer, by contrast, is pricing a tank, a regulator, and typically a periodic delivery contract, on top of the water heater itself.
Sometimes, and only with a kit built for that exact model, never a universal part. A. O. Smith's written policy bans converting a water heater from natural gas to propane under any circumstances, while Bradford White allows conversion in both directions on specific models only, checked against the unit's model number by a professional before any parts are ordered.
The two manufacturers are not even symmetric with each other. A. O. Smith's Technical Bulletin 137 states the conversion of a gas water heater from natural gas to LP gas is not allowed under any circumstances, and will only permit an LP-to-natural-gas conversion when it is part of a utility program, done under the utility's direct supervision, dated December 20, 1999 and still the manufacturer's current published policy. Bradford White instead sells conversion kits for both directions on the models that support it, but its own FAQ tells owners to have a plumbing professional check the model number first, because not every unit qualifies.
| Conversion direction | Published kit price |
|---|---|
| Natural gas to propane | $21.95 to $73.95 per kit |
| Propane to natural gas | $362.95 to $487.95 per kit |
Source: Bradford White OEM Gas Conversion Kits parts catalog, accessed August 2026.
That price gap between directions is the catalog's own listing, not a rule of thumb, and it is a reminder that a conversion kit is not a flat-rate part: the actual cost depends on the model, the direction, and whether the manufacturer allows the swap at all. A licensed installer confirming compatibility before ordering the part is not an upsell, it is what both manufacturers require in writing.
No. About 83 percent of households that heat with propane sit in rural areas beyond the reach of the natural gas pipeline network, per Energy Information Administration data, and in the Midwest, that share tops 90 percent. For a home like that, propane is not a price comparison, it is the only gas fuel the water heater can run on.
That 83 percent figure is from a 2011 EIA analysis, so treat it as the general pattern rather than this year's count, but the underlying reason has not changed: pipelines are expensive to extend, and a property far from an existing gas main is unlikely to get one just because a water heater needs replacing. In that situation the fuel question already has one answer, and the only remaining choice is whether to rent or buy the tank covered above.
If there is no gas service of any kind, not even propane delivery, to the property, an electric model is the other realistic path, covered on the electric replacement cost page.
Every figure above is listed here with its publisher and date. If a number is not traceable to this list, it is not on this page.
Prices and fuel rates move. Check these dates against today rather than assuming an earlier 2026 figure still holds.
Usually, yes. Using EIA's residential propane price of $2.668 a gallon for March 2026 and residential natural gas price of $19.83 per thousand cubic feet for May 2026, converted through EIA's own heat content figures, propane works out to roughly $29 per million Btu against about $19 for natural gas, close to one and a half times as much for the same delivered heat. Source: EIA, March and May 2026 data.
Only if the manufacturer built that model to be converted, and only with the maker's own kit. A. O. Smith bans converting natural gas units to propane under any circumstances. Bradford White allows it on specific models, checked against the model number by a professional first. Source: A. O. Smith Technical Bulletin 137, 1999; Bradford White FAQ, accessed August 2026.
On Bradford White's own parts catalog, a natural-gas-to-propane kit runs $21.95 to $73.95, while a propane-to-natural-gas kit for the same brand runs $362.95 to $487.95, because the two directions use different parts. Prices are brand and model specific, not a flat rate. Source: Bradford White OEM Gas Conversion Kits, accessed August 2026.
Either, depending on the supplier. AmeriGas publishes rental installation starting around $250 plus roughly $100 a year, against purchase and installation starting around $2,000 for an owned tank, with a break-even of about 17 years between the two. Source: AmeriGas, August 2021.
Then propane, delivered and stored on the property, is generally the only gas option. About 83 percent of households heating with propane are in rural areas beyond the natural gas pipeline network, per EIA data, so for many rural properties this is not a cost comparison, it is the only route to a gas water heater. Source: EIA, Today in Energy, 2011.
Propane holds far more energy per unit, 91,452 Btu per gallon against 1,036 Btu per cubic foot of natural gas, but it is priced and delivered differently, by the gallon from a supplier rather than metered continuously through a utility pipe. Even after converting both to the same million-Btu basis, propane still prices higher nationally. Source: EIA energyexplained and residential price data.
Independent Research
Published ranges for tank and tankless replacement, the failures that justify a repair, and the ones that do not. Sourced, dated, and free to read.
