Point-of-use water heater vs. tankless electric water heater: running cost
A point-of-use water heater is cheaper to run: about $57 a year versus $666 for a tankless electric water heater at typical use and 17.99¢/kWh, a $608 difference.
| Point-of-use water heater | Tankless electric water heater | |
|---|---|---|
| Typical watts | 3,500 W | 24,000 W |
| Watt range | 2,400–13,000 W | 13,000–36,000 W |
| Typical use | 15 minutes a day | 3,700 kWh a year |
| Energy per year | 320 kWh | 3,700 kWh |
| Cost per hour | 63¢ | 7.6¢ |
| Cost per day | 16¢ | $1.82 |
| Cost per month | $4.79 | $55.47 |
| Cost per year | $57 | $666 |
| Per year in Hawaii (43.51¢) | $139 | $1,610 |
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What drives the difference
- Point-of-use water heater: Point-of-use tankless heaters draw 3.5-13 kW for a single sink or shower and only while water flows.
- 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
Cuts the flow the heater must warm.
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Frequently asked questions
Which costs more to run, a point-of-use 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 $57 for a point-of-use water heater. That's $608 more, or 11.6× as much.
How many watts do point-of-use water heater and tankless electric water heater use?
A point-of-use water heater typically draws 3,500 W (range 2,400–13,000 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.