Electric water heater vs. tankless electric water heater: running cost
A tankless electric water heater is cheaper to run: about $666 a year versus $810 for an electric water heater at typical use and 17.99¢/kWh, a $144 difference.
| Electric water heater | Tankless electric water heater | |
|---|---|---|
| Typical watts | 4,500 W | 24,000 W |
| Watt range | 3,000–5,500 W | 13,000–36,000 W |
| Typical use | 4,500 kWh a year | 3,700 kWh a year |
| Energy per year | 4,500 kWh | 3,700 kWh |
| Cost per hour | 9.2¢ | 7.6¢ |
| Cost per day | $2.22 | $1.82 |
| Cost per month | $67.46 | $55.47 |
| Cost per year | $810 | $666 |
| Per year in Hawaii (43.51¢) | $1,958 | $1,610 |
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What drives the difference
- Electric water heater: A 40-50 gallon electric tank serving 3-4 people typically uses 4,000-5,000 kWh a year, including 400-600 kWh of standby heat loss. Water heating is often the second-largest electric load in a home.
- Tankless electric water heater: Whole-house electric tankless heaters draw 18-36 kW but only while hot water flows, and they avoid tank standby loss. They usually save about 10-20% versus an electric tank but need 100-150 A of dedicated circuits.
Ways to cut either cost
Uses about 60-70% less energy than any electric resistance heater, tank or tankless.
See options on AmazonUses 60-70% less electricity, saving roughly 2,500-3,000 kWh a year.
See options on AmazonWe may earn a commission from qualifying purchases. It never changes the numbers we show. Disclosure.
Frequently asked questions
Which costs more to run, an electric water heater or a tankless electric water heater?
At typical use and the U.S. average rate (17.99¢/kWh), an electric water heater costs about $810 a year versus $666 for a tankless electric water heater. That's $144 more, or 1.2× as much.
How many watts do electric water heater and tankless electric water heater use?
An electric water heater typically draws 4,500 W (range 3,000–5,500 W). A tankless electric water heater draws 24,000 W (range 13,000–36,000 W). Watts alone don't decide cost. Hours of use, cycling and standby matter just as much.
Rates: EIA, 12 months ending 2026-07. Methodology.