For people using gas water heaters, two options are offered--natural gas or propane. According to Energy Star, 15 percent of a home’s energy use is attributed to heating water. Both types of gas water heaters offer the same performance in heating.
If natural gas is offered in the area a person lives, this type of water heater is typically used. Natural gas, however, is not offered in all areas, so for areas where natural gas is not available, people may choose propane as the source of heating their water. The only other option is electric.
Natural gas is lighter than propane and tends to rise in the air and dissipate. Propane poses a greater explosive risk because it is heavier than natural gas.
Natural gas water heaters heat water more efficiently than electric water heaters. Natural gas develops naturally, while propane must be pumped, separated and distilled. Propane heats water just as well as natural gas, but is not as cost-effective. According to the Consumer Energy Center, the yearly cost of operating a natural gas water heater is $190, compared to $343 for propane when the price per therm is 70 cents.