Will a Tankless Hot Water Heater Increase Your Electricity Bill?

  • July 21, 2023
  • By MR COOL

Traditional water heaters heat water and store it for later, but tankless water heaters heat water on demand. Because tankless water heaters only consume energy when you need hot water, they’re more energy efficient, saving you money on water and energy bills. Additionally, they offer you a near-endless supply of hot water.

The primary types of tankless water heaters are electric and gas. When wondering if tankless water heaters use a lot of energy, it’s crucial to learn about the various factors that affect their energy costs.

How Much Electricity Does a Tankless Water Heater Use?

Many people wonder if tankless water heaters increase electric bills. The answer is no — tankless water heaters can save money on your monthly electric bill because they’re 8%-34% more efficient than storage water heaters. The total electricity cost of a tankless water heater depends on several factors:

  • The number of rooms: A residence with more rooms requires more hot water.
  • The number of people: The greater the number of people living in your household, the more hot water you’ll likely use.
  • The outside temperature: When it’s colder outside, your hot water heater must work harder to heat the water.
  • The water heater’s size: You need the right water heater size to meet your needs. A unit that’s too small or large will consume too much energy.
  • The water heater’s BTU: The amount of energy a tankless water heater requires to raise the water temperature is measured in British Thermal Units (BTUs). A water heater with a higher BTU rating can supply hot water for more appliances and bathrooms.
  • The water heater’s flow rate: A water heater can heat water at a rate below or equal to the system’s maximum flow rate. Flow rate is measured in gallons per minute (GPM). The higher the flow rate, the more simultaneous hot water use a water heater can support.

You can estimate how much electricity a tankless water heater uses based on the water heater’s heating capacity, the average daily hot water usage and the cost per hour of electricity.

An average American uses 82 gallons of water daily at home. Suppose that only 41 gallons are hot water and the person has a small 8-kilowatt water heater with a flow rate of around 3 GPM. The average cost of electricity per kilowatts per hour is about $0.17. If the water heater runs at 50% capacity and takes one hour’s worth of electricity to heat the water, then its daily electricity cost is $0.68. So, the monthly electricity cost would be about $21, and the estimated yearly cost would be $253.

Estimated Yearly Costs of Gas Tankless Water Heaters

Because gas water heaters use minimal electricity, they have lower yearly energy costs than electric water heaters.

For example, if a tankless water heater with a flow rate of around 8.5 GPM uses 150 watts per hour or 0.15 kilowatts per hour of electricity, and you only use it for an hour, it would consume that much electricity daily. Therefore, your average daily electricity cost would be $0.026 a day, about $0.80 a month and roughly $9.50 a year.

You must buy natural gas or propane for your water heater, but gas costs less than electricity. The average weekly cost of 1 gallon of propane in the United States in March 2023 was around $3, so if you used about 5 gallons a month, the monthly cost would be about $15, and the yearly cost would be $180.

Thus, the estimated annual energy cost for the 150-watt gas tankless water heater would be $189.50, while the estimated annual cost of an 8-kilowatt electric water heater, as described in the previous section, was $253. Based on this example, the gas water heater is more economical and has a much higher flow rate.

Differences Between Gas and Electric Tankless Water Heaters

The primary difference between gas and electric water heaters is their energy source. However, there are other key differences between the two, such as:

  • Initial cost: Electric water heaters cost less initially, but gas water heaters have lower operating costs.
  • Flow rate: Gas water heaters have higher GPMs than electric water heaters.
  • Household types: As previously mentioned, tankless gas water heaters are best for large households, and electric water heaters are best for smaller homes.

The Best Tankless Water Heater

Tankless gas water heaters offer many benefits for large households. They have a life span of 20 years or more, avoid the standby heat losses of storage water heaters and can provide enough hot water for multiple showers and appliances.

The MRCOOL Tankless Water Heater is an affordable, high-quality water heater for your home. It features all the latest technology to provide you with countless advantages, including:

  • High volume and flow rate: MRCOOL’s tankless water heater has a GPM rating of 8.45. This GPM rating means there’s an ample water supply that can accommodate up to four home appliances at the same time. For example, it can run two showers, a dishwasher and a washing machine.
  • Multiple ways to connect: This efficient tankless water heater can run on natural gas or propane.
  • Anti-freeze protection: When temperatures drop low enough to freeze pipes, it’s an inconvenience that can become expensive to fix. Thankfully, MRCOOL’s tankless water heater has anti-freeze protection, so the water in your pipelines always maintains a temperature greater than or equal to 40 degrees Fahrenheit.
  • Energy-Star certified: Our water heater meets the Environmental Protection Agency’s energy standards. It saves energy and money and protects the environment by generating fewer gas emissions.
  • Ultra-low NOx and CO emissions: Because it has an eco-friendly burner, this tankless water heater releases fewer nitrogen oxide (NOx) and carbon monoxide (CO) emissions. As a result, it meets South Coast Air Quality Management District standards.
  • Warranty: The tankless water heater has three warranties — a 15-year heat exchanger, 5-year parts and 5-year limited labor.

Check Out Our Powerful Tankless Water Heater

The MRCOOL Tankless Water Heater is powerful and durable, saving you energy and providing you with the hot water you need. We rely on state-of-the-art manufacturing and design processes to bring you efficient and innovative technology. Contact us today to learn more about our tankless water heater.


4 thoughts on “Will a Tankless Hot Water Heater Increase Your Electricity Bill?”

  1. I am interested in this product, please send me the documents and operating principles of your product, thank you.

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