How Much Electricity Does a Tankless Water Heater Use

tankless water heater electricity use

You have probably heard a lot of stories about tankless water heater and how efficient they are. You might have even started thinking about getting one for yourself.

But before you undertake this project, let’s first take a look at how much energy does it actually need and will it pay for itself in the long run.

Types of Annual Costs

If you have dived into the world of tankless water heater worshiping, you have probably come across many claims that these can save as much as 80 percent of energy.

But the question still stands, will you really save that much and if not, how much will be taken from your next electricity bill?

The most important question is: what is the Return of Investment and can you somehow compare it to that of a regular tank water heater? Is it better to invest a little and have  a tankless one installed?

Now, there are three categories of costs that are connected to water heaters:

  1. Heating costs. The costs of heating the water from the starting point (or the temperature that comes out of the sink) and to the desired temperature.
  2. Standby energy costs. this is only in case of standard water heaters with tanks. That is the energy used up for keeping the water in the tank warm during the day. In cases of tankless water heaters, standby costs would be the costs of just minimally working.
  3. Installation costs. Naturally, this is the cost of installing a water heater and all the piping and electrical work that needs to be done to adjust your house to the system. It is important to say that regular water heaters have life a span of about 10 years, while tankless water heaters have a life span of as much as 20 years.

So, How Much Electricity Does A Tankless Water Heater Use?

So, let’s say that you are living in an average household that uses electric water heater for 3 hours daily (and probably even less). In this case, on an average basis, a tankless water heater will use around 4000 watts.

Now, the tankless water heater that uses 4000 watts daily will approximately use 12 kWh per day. Okay, but how much is this exactly? To be more precise, that’s around $1.2 daily, at the price of $0.10 per kWh. So with a simple calculation, that’s around $36 per month and $438 per year, which is quite an impressive number.

Shortly, if you are using a tankless water heater for 3 hours a day, it will spend around 360 kWh per month, which is 43200 per year. In comparison to an average regular water heater with a tank, that’s quite a good deal.

Of course, if you are not running your tankless water heater for 3 hours daily (which you probably won’t do, of course), the costs and energy utilization drops drastically. For a household that uses it for around one hour daily (more reasonable use than the aforementioned 3 hours of daily use per household), the electricity usage should drop at least 3 times, which is 14400 kwh per year.

With that said, the yearly bill for such pleasurable endless stream of hot water should be roughly $145.

It is more than obvious that the tankless water heater uses much less electricity than the conventional one. There are no additional standby electricity requirements, neither those required for the re-heating process.

Therefore, electric water heaters will save up to 15% of the energy that your traditional water heater uses just to maintain the water temperature or reheat it.

Does It Work During A Power Outage?

Even though tankless water heaters have many advantages, this is just not the one.

While old water heaters with tanks have storages for hot water, these “on demand” water heaters do not, and when there is a power outage, the circuit will be turned off and there will be nothing to heat the water for you.


Given everything previously stated, we may conclude that the tankless water heater is quite a worthy asset to your electricity saving arsenal. As stated, they can save up to $120 per year, which comes pretty significant in the long run.

They can be as much as 25%-35% more energy efficient than conventional water heaters. This means less electricity used to heat up the same amount of water.

Hopefully, this article gave you some insight into how worth these water heaters are, and how much electricity can you possibly save yearly.

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