How Much Does It Cost to Run a Tankless Water Heater?
A typical Tankless Water Heater uses 27000W and runs about 1 hours/day. At the national average rate of 16.72¢/kWh, that costs approximately $135.43/month.
Calculate Your Cost
What Affects the Cost of Running a Tankless Water Heater
Extremely High Wattage, Very Short Runtime Per Use
An electric tankless water heater draws 18,000-36,000W while active, making it the highest-wattage appliance in any home. But it only runs while hot water is flowing (typically 10-20 minutes per day total). A 27,000W unit running 15 minutes uses 6.75 kWh ($1.13/day). Compare that to a tank heater maintaining temperature 24/7 at $2.00-$2.30/day, and the tankless may actually cost less despite the astronomical wattage.
No Standby Loss Is the Key Advantage
A tank water heater loses heat constantly through the tank walls, using energy to maintain temperature even when no hot water is being used. A tankless heater uses zero electricity when no hot water is flowing. For households with irregular hot water usage (single person, or family that is away during the day), eliminating standby loss can save 20-30% compared to a tank.
Tankless Water Heater vs. Alternatives
How the monthly cost of a Tankless Water Heater compares to other options:
| Alternative | Est. Monthly Cost | Notes |
|---|---|---|
| Tankless Water Heater (this page) | $135.43 | At national average rate, 1hrs/day |
| Electric tank water heater | ~$50-70 | Lower peak wattage but standby losses add 20-30% to operating cost. |
| Gas tankless water heater | ~$20-35 | Gas heating is cheaper per BTU. Does not require massive electrical upgrade. |
| Heat pump water heater | ~$20-30 | Lowest operating cost of any electric option. Requires tank space. |
| Point-of-use electric tankless (small) | ~$5-15 | 3,500-7,000W. For a single sink or shower. Lower installation cost. |
Tankless Water Heater Cost by State
What a Tankless Water Heater costs to run at 27000W for 1 hours/day in every state:
| State | Rate | Monthly Cost | Yearly Cost |
|---|---|---|---|
| Alabama | 14.82¢ | $120.04 | $1440.5 |
| Alaska | 25.34¢ | $205.25 | $2463.05 |
| Arizona | 13.81¢ | $111.86 | $1342.33 |
| Arkansas | 12.63¢ | $102.3 | $1227.64 |
| California | 31.41¢ | $254.42 | $3053.05 |
| Colorado | 15.24¢ | $123.44 | $1481.33 |
| Connecticut | 29.35¢ | $237.74 | $2852.82 |
| Delaware | 15.24¢ | $123.44 | $1481.33 |
| District of Columbia | 15.87¢ | $128.55 | $1542.56 |
| Florida | 15.63¢ | $126.6 | $1519.24 |
| Georgia | 14.12¢ | $114.37 | $1372.46 |
| Hawaii | 43.21¢ | $350 | $4200.01 |
| Idaho | 10.87¢ | $88.05 | $1056.56 |
| Illinois | 16.37¢ | $132.6 | $1591.16 |
| Indiana | 15.12¢ | $122.47 | $1469.66 |
| Iowa | 14.23¢ | $115.26 | $1383.16 |
| Kansas | 14.98¢ | $121.34 | $1456.06 |
| Kentucky | 12.87¢ | $104.25 | $1250.96 |
| Louisiana | 11.98¢ | $97.04 | $1164.46 |
| Maine | 22.87¢ | $185.25 | $2222.96 |
| Maryland | 16.12¢ | $130.57 | $1566.86 |
| Massachusetts | 28.76¢ | $232.96 | $2795.47 |
| Michigan | 18.76¢ | $151.96 | $1823.47 |
| Minnesota | 15.34¢ | $124.25 | $1491.05 |
| Mississippi | 13.76¢ | $111.46 | $1337.47 |
| Missouri | 13.12¢ | $106.27 | $1275.26 |
| Montana | 12.45¢ | $100.85 | $1210.14 |
| Nebraska | 11.98¢ | $97.04 | $1164.46 |
| Nevada | 15.03¢ | $121.74 | $1460.92 |
| New Hampshire | 25.34¢ | $205.25 | $2463.05 |
| New Jersey | 18.76¢ | $151.96 | $1823.47 |
| New Mexico | 14.87¢ | $120.45 | $1445.36 |
| New York | 22.87¢ | $185.25 | $2222.96 |
| North Carolina | 13.98¢ | $113.24 | $1358.86 |
| North Dakota | 11.87¢ | $96.15 | $1153.76 |
| Ohio | 15.34¢ | $124.25 | $1491.05 |
| Oklahoma | 11.98¢ | $97.04 | $1164.46 |
| Oregon | 13.12¢ | $106.27 | $1275.26 |
| Pennsylvania | 16.87¢ | $136.65 | $1639.76 |
| Rhode Island | 27.12¢ | $219.67 | $2636.06 |
| South Carolina | 14.98¢ | $121.34 | $1456.06 |
| South Dakota | 13.76¢ | $111.46 | $1337.47 |
| Tennessee | 12.87¢ | $104.25 | $1250.96 |
| Texas | 14.98¢ | $121.34 | $1456.06 |
| Utah | 10.87¢ | $88.05 | $1056.56 |
| Vermont | 21.34¢ | $172.85 | $2074.25 |
| Virginia | 15.34¢ | $124.25 | $1491.05 |
| Washington | 10.76¢ | $87.16 | $1045.87 |
| West Virginia | 13.12¢ | $106.27 | $1275.26 |
| Wisconsin | 16.98¢ | $137.54 | $1650.46 |
| Wyoming | 11.23¢ | $90.96 | $1091.56 |
Energy-Saving Tips for Your Tankless Water Heater
- High wattage but only runs while water flows, so total energy can be less than a tank
- Requires a dedicated 240V circuit, often 60-150 amps
- Best for homes with low to moderate hot water demand
- No standby heat loss, unlike tank heaters that maintain temperature 24/7
Frequently Asked Questions
It depends on your usage pattern. Tankless eliminates standby heat loss (saving 20-30%) but has higher per-minute operating cost due to extreme wattage. For households that use hot water in concentrated bursts (morning showers, evening dishes) with long idle periods, tankless saves money. For households with frequent, small hot water draws throughout the day, the savings are smaller. Typical savings: $10-20/month compared to an electric tank.
Usually yes. A whole-home electric tankless heater requires 100-150 amps of dedicated electrical capacity (two to three 40-50A breakers). Many older homes have 100-150A panels total, meaning an upgrade ($1,500-3,000) may be needed. This is a significant installation cost to factor into the total investment. Point-of-use tankless units for individual fixtures need only 20-40A and are much simpler to install.
A whole-home electric tankless unit costs $35-55/month for a family of 3-4 at the national average rate, about 20-30% less than a standard tank heater. Single-person or two-person households see larger savings (up to 40%) because standby loss is a bigger proportion of total energy for lower-usage homes.
Related Appliances
Electricity cost estimates are based on typical wattage and average residential rates from the U.S. Energy Information Administration. Your actual costs may vary based on your appliance's specific wattage, usage patterns, and your utility's rate structure. See our full disclaimer.