Water Heaters
Price Comparison between Tankless & Traditional Water Heaters
While money isn’t everything, the idea of cutting down the 20% of your monthly energy bills is still
quite appealing to most families and homeowners. And these cost savings don’t just add up for
these families and homeowners, but over the course of a year, Americans could save:

• Fuel oil of about 290 millions gallons each year
• Kilowatt electricity of about 6 billion hours
• Propane of approximately 164 millions gallons each year

Needless to say, if everyone switched their tank water heaters to tankless systems, the installation
costs would add up quickly.

What can you save annually?

Much of the savings will vary from one tankless water heater model to the next, but here are a few
estimated savings that you can expect.
• 11-18% savings of electric tankless over electric tank system
• 24-35% savings over natural gas tank system or LP tank system
• 64-69% savings natural gas tankless vs. electric tank system

These percentages take into consideration the fact that fuel charges and electricity costs may vary
from year to year as well.

However, using the typical house bill of $100 per month, this adds up to an overall savings of
anywhere from $11 to $69 each month. Over the year, that adds up to $132 to $828.

What makes the initial investment worth it?

The fact is that tankless water heaters have been designed to withstand years of use. They are
only going to work when they need to, which lessens the impact on your energy costs as well as
wear and tear to the system itself. When you have a tank water heater, you are constantly ‘feeding’
it electricity and fuel to keep heating the water that you need to use.

This constant work leads the tank system to need replacing every two to nine years, which makes
the lower cost something that you will need to pay more often. The tank itself is not made from
materials that will not leak, which creates in efficient water heating as well.

The tank water heater also creates the ideal environment for decreasing efficiency. The water that
is stored in the tank has minerals in it, but these minerals settle as the water sits, while creates a
tank that doesn’t hold as much water, and heats what water can be stored less efficiently. Each
year, you will pay more for a diminishing water heater.

How much does a tankless system cost?

The installation of a typical tankless system will cost about two to four times the amount of a tank
system. However, the installation is much simpler and does not take hours to complete in many

As examples, a small under the sink tankless system can cost about $200, while a faster gas-fueled
tankless system can cost about $1200. Just as with the tank systems, the more water the system
produces, the more expensive it will be.

However, when you consider that the efficiency will remain constant, the initial investment does not
seem as prohibitive as it might at first glance. Think about the money that you will be saving each
month and you can see that you may have paid for the tankless water heater by the end of the year
with your lower energy bills.
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