There is a ton of buzz around tankless units these days. Naturally, homeowners are asking the big questions: How much electricity does a tankless water heater use, and will it actually lower my monthly bills?
The short answer is yes, they are efficient, but the power draw is significant while they are running. Let’s break down the math, the pros, and the reality of going tankless.
Key Takeaways
- Power Draw: Electric tankless water heaters can pull 15,000 to 30,000 watts (or more) while running.
- Efficiency: They are 24 to 34 percent more energy-efficient than traditional tanks because they eliminate standby heat loss.
- Key Variables: Total consumption depends on your groundwater temperature, flow rate (GPM), and household size.
- Sizing: You must match the heater’s kilowatt (kW) rating to your home’s peak hot water demand to avoid cold showers.
How Does a Tankless Water Heater Work?
Traditional water heaters work like a giant kettle that never turns off; they keep 40 to 50 gallons of water hot 24/7, regardless of whether you are home or not.
A tankless water heater (also called an “on-demand” heater) skips the storage part entirely. When you turn on a hot water tap, cold water travels through a pipe into the unit. An electric element or gas burner instantly heats the water as it passes through.
Some gas-powered tankless heaters usually offer higher flow rates than electric models, making them a popular choice for larger families.
While tankless units provide a constant flow of hot water, they can struggle if you try to shower, run the dishwasher, and do laundry all at the exact same time.
How Much Electricity Does a Tankless Water Heater Use?
Estimating exact costs is tricky because, unlike a standard tank that runs in the background, a tankless unit only consumes power when you turn a faucet on.
To figure out your usage, you need to know the heater’s wattage and your local electricity rate. For example, a robust whole-house electric tankless unit might be rated at 27kW (27,000 watts). That is a massive amount of power, but it might only run for 30 minutes a day.
Below is an estimation assuming the heater runs at full capacity. Keep in mind that for a tankless heater, you only pay for the minutes you actually use hot water.
| Tankless Water Heater Wattage | Cost per Hour | Est. Cost per Month (1hr/day) | Est. Cost per Year |
| 10 kW | $1.32 | $39.60 | $481.80 |
| 15 kW | $1.98 | $59.40 | $722.70 |
| 20 kW | $2.64 | $79.20 | $963.60 |
| 25 kW | $3.30 | $99.00 | $1,204.50 |
| 30 kW | $3.96 | $118.80 | $1,445.40 |
What Can Affect Power Consumption?
Several factors dictate how hard your heater has to work.
Groundwater Temperature
This is the biggest factor most people overlook. If you live in a northern climate where groundwater is 40°F, your heater has to work much harder to get that water to 120°F than it would in Florida, where groundwater sits at 70°F. Colder inlet water equals higher electricity usage.
Household Size and Behavior
A home with four people taking daily showers will obviously consume more power than a single person. However, habits matter too. Long showers and high-flow showerheads (2.5 GPM or higher) will drastically increase the unit’s runtime.
Energy Star Ratings
If you have an Energy Star-rated tankless water heater, it operates more efficiently than standard models. While electric resistance heating is generally 99 percent efficient (almost all energy becomes heat), better internal components and flow sensors can save you money over time.
Energy Efficiency of Tankless vs. Tank Water Heaters
Tankless water heaters are generally the winner here, mostly because they eliminate “standby energy loss.”
Storage tanks lose heat through their walls constantly, meaning the burner or elements have to kick on just to keep the water sitting in the tank hot. Tankless units sit completely idle and use zero energy until you open a tap.
According to the Department of Energy, a tankless water heater can be 24 to 34 percent more energy-efficient for homes that use 41 gallons or less of hot water daily. Even for busy homes using roughly 86 gallons a day, they remain about 8 to 14 percent more efficient.
What to Consider When Buying a Tankless Water Heater
Before you swap out your old rusty tank, keep these three factors in mind to ensure you make a smart buy.
The “Temperature Rise” (Delta T)
You need a unit that can handle the temperature rise required for your climate. If your incoming water is 50°F and you want a 110°F shower, the heater must be able to raise the temperature by 60 degrees while maintaining good water pressure.
Flow Rate (GPM)
Flow rate is measured in gallons per minute (GPM). You need to calculate your peak demand. For example, if you want to run a shower (2.0 GPM) and the kitchen sink (1.5 GPM) simultaneously, you need a heater that can handle at least 3.5 to 4.0 GPM.
Electric vs. Gas Logistics
If you do not have a gas line, electric seems like the easy choice. However, whole-house electric tankless heaters require massive amperage. You may need to upgrade your electrical panel and install three or four dedicated 40-amp breakers. This can cost thousands of dollars.
Gas heaters are more powerful and heat water faster, but they require complex venting systems (stainless steel or PVC) to exhaust fumes safely.
Pros and Cons of Tankless Water Heaters
Here is a quick look at the trade-offs involved in going tankless.
Pros
- High Efficiency: Significant savings for homes with low-to-moderate water usage.
- Longevity: Tankless units can last 20+ years, nearly double the lifespan of a standard tank.
- Space Saving: Wall-mounted units free up floor space in your garage or basement.
- Endless Hot Water: As long as you have fuel/power, you won’t run out of hot water during a long shower.
Cons
- High Upfront Cost: Units are more expensive, and installation (especially retrofitting) can be pricey.
- Electrical Upgrades: Electric models often require expensive upgrades to your home’s circuit breaker panel.
- Flow Limits: If you try to run three showers at once, the water may run lukewarm or the flow will drop significantly.
Is a Tankless Water Heater Worth the Cost?
While the initial tankless water heater cost is higher, the long-term savings and convenience often make it worth it. If you plan to stay in your home for more than five years, the energy savings and the extended lifespan of the unit (20 years vs. 10 years) usually pay for the difference.
What Size Tankless Water Heater Do I Need?
Sizing depends entirely on your concurrent water usage. You need to do a little math to avoid buying a unit that leaves you shivering.
Here is the average water usage (flow rate) for common fixtures:
- Standard Shower: 2.0 to 2.5 GPM
- Rain Showerhead: 3.0 to 5.0 GPM
- Kitchen Faucet: 1.5 GPM
- Bathroom Faucet: 1.0 GPM
- Dishwasher/Washer: 1.5 to 2.0 GPM
If you are a family of four and you typically have two showers running at the same time in the morning, you need a unit that can deliver at least 5.0 GPM. If you live in a cold climate, size up to ensure the heater can keep up with the temperature rise.
How to Make Your Water Heater More Energy Efficient
Want to squeeze even more savings out of your system? Try these tips:
- Lower the Temp: Set your thermostat to 120°F. Anything higher is usually unnecessary and poses a scalding risk.
- Insulate Pipes: Add foam insulation to the first few feet of hot and cold water pipes connected to the unit to reduce heat loss.
- Annual Maintenance: Flush your tankless heater with white vinegar once a year to remove mineral buildup (scale). Scale forces the heater to work harder and use more electricity.
- Install Low-Flow Fixtures: Swapping a 2.5 GPM showerhead for a 1.75 GPM model instantly reduces the load on your heater.
FAQs
Can a Tankless Water Heater Run a Whole House?
Yes, but you must buy a unit specifically sized for “whole house” use. Small point-of-use heaters are only meant for a single sink. For a family of four, look for a unit rated for 5 to 7 GPM (gallons per minute) or higher to ensure you can shower and run the dishwasher simultaneously.
What Size Breaker Do I Need for a Tankless Water Heater?
What is the Average Lifespan of a Tankless Water Heater?
Do Tankless Water Heaters Increase Your Electric Bill?
Generally, no. They typically lower your bill because they do not waste energy heating water when you aren’t using it. However, if you switch from a gas tank heater to an electric tankless heater, your electricity bill will go up, but your gas bill will disappear.
The Verdict
So, how much electricity does a tankless water heater use? While the instantaneous power draw is high (up to 30,000 watts), the overall consumption is lower than traditional tanks because they run for far fewer hours per day.
If you have the electrical capacity to support one, a tankless unit is a smart, space-saving investment that pays off in the long run.
