Heat pump water heater vs. tankless electric water heater: running cost
A heat pump water heater is cheaper to run: about $234 a year versus $666 for a tankless electric water heater at typical use and 17.99¢/kWh, a $432 difference.
| Heat pump water heater | Tankless electric water heater | |
|---|---|---|
| Typical watts | 450 W | 24,000 W |
| Watt range | 300–4,500 W | 13,000–36,000 W |
| Typical use | 1,300 kWh a year | 3,700 kWh a year |
| Energy per year | 1,300 kWh | 3,700 kWh |
| Cost per hour | 2.7¢ | 7.6¢ |
| Cost per day | 64¢ | $1.82 |
| Cost per month | $19.49 | $55.47 |
| Cost per year | $234 | $666 |
| Per year in Hawaii (43.51¢) | $566 | $1,610 |
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What drives the difference
- Heat pump water heater: Heat pump water heaters move heat from surrounding air into the tank, using 300-550 W while running and about 1,100-1,500 kWh a year for a typical family.
- 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
Reduces hot water demand so the unit stays in heat pump mode.
See options on AmazonUses about 60-70% less energy than any electric resistance heater, tank or tankless.
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Frequently asked questions
Which costs more to run, a heat pump water heater or a tankless electric water heater?
At typical use and the U.S. average rate (17.99¢/kWh), a tankless electric water heater costs about $666 a year versus $234 for a heat pump water heater. That's $432 more, or 2.8× as much.
How many watts do heat pump water heater and tankless electric water heater use?
A heat pump water heater typically draws 450 W (range 300–4,500 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.