Does A Tankless Water Heater Use More Electricity?

Are you considering switching to a tankless water heater but concerned about how much electricity they use? You’re not alone. Many homeowners wonder if a tankless water heater will save them money on their monthly energy bills or if it’s just a marketing ploy. In this blog post, we’ll explore the truth about tankless water heaters and what you need to know about how much electricity they use compared to storage tank heaters.

TLDR – Does a tankless water heater use more electricity than a storage heater? No it doesn’t. But how much less electricity does it use? Find out more below.

How Much Electricity Does a Tankless Water Heater Use Compared to a Storage Tank Heater?

Regarding heating water for your home, you have two main options: tankless and storage water heaters. As the name suggests, tankless water heaters do not have an attached storage tank and are more compact than traditional storage tanks. They provide hot water on demand, meaning they heat water as it is used rather than keeping a large hot water supply in a storage tank. On the other hand, storage tank water heaters keep a large hot water supply in a storage tank and are typically larger than tankless models. While both devices provide hot water for your home, there are some key differences between them. 

Electricity Usage

Tankless Water Heaters

These units are smaller and take up less space in your home. They use an electric element to heat the water through the unit. This means they don’t need to store large amounts of hot water to be more energy efficient. Depending on the flow rate, they use between 0.26 and 0.40 kilowatt-hours per gallon of hot water.

Storage Water Heaters

These units are larger and require more space in your home. They use an electric element to heat the water in an insulated tank. This means they must constantly keep the water in the tank heated and ready for use. On average, they use between 0.62 and 0.87 kilowatt-hours per gallon of hot water, depending on the tank’s size and the unit’s efficiency. 

Other Differences Between Tankless and Storage Water Heaters

Besides energy efficiency, tankless and storage water heaters offer advantages and disadvantages. Below are some key differences between the two :

  • Tankless water heaters only heat water when it is needed, which can save energy and money. However, these systems require higher upfront costs due to their complexity and require regular maintenance to keep them functioning properly. 
  • Storage water heaters typically have lower upfront costs and require less maintenance than tankless systems. However, they also require energy to continuously heat the water in the tank, which can result in higher electricity bills. 
  • Tankless systems are more efficient when providing hot water since they heat it on demand and don’t waste energy by continuously heating stored water. 

Both systems have many differences, but a tankless water heater is an ultimate choice regarding energy efficiency, cost-effectiveness, and maintenance requirements.

How Does a Tankless Water Heater Work?

A tankless water heater is an energy-efficient, space-saving alternative to traditional water heaters. Unlike a traditional water heater with a large tank to store hot water, a tankless water heater only heats water when needed. It uses a series of coils or heat exchangers to heat cold water as it passes through the system.

When you turn on your faucet, cold water passes through the system and is heated up by the coils or heat exchangers as it moves through. The temperature of the water can be adjusted by controlling the rate at which the water flows through the system. Since the tankless water heater is only heating when needed, it’s much more energy efficient than a traditional water heater.

Tankless water heaters come in both gas and electric varieties. Gas tankless water heaters are more efficient and can provide more consistent hot water flow than electric models, but they require ventilation. Electric tankless water heaters need not be vented, making installing them easier. They’re also more affordable than their gas counterparts, but they may not be able to provide as much hot water as a gas model.

Tankless water heaters are a great way to save money on energy bills while providing an endless hot water supply. But before you switch to a tankless water heater, it’s important to understand how they work and what you need to consider before installation.

The Pros and Cons of Tankless Water Heaters

When it comes to hot water, tankless water heaters are a great alternative to traditional tank-style water heaters. Tankless systems offer several advantages over tank-style models and some drawbacks that should be considered before purchasing. To make an informed decision about whether or not a tankless water heater is right for you, let’s take a closer look at the pros and cons of tankless water heaters. 

Unlimited Hot Water Supply

Tankless systems provide an unlimited supply of hot water, so you will always stay supplied like you can with tank-style units. 

Space Savings

Tankless systems occupy much less space than tank-style units. This makes them ideal for small homes or apartments where every square foot of space counts. 

Energy Savings

Tankless systems are much more energy efficient than tank-style units, which can help reduce your monthly utility bills. 

Longer Lifespan

Tankless systems typically last 10-15 years longer than tank-style units. 

Tax Rebates

Depending on local and state regulations, you may qualify for tax rebates when installing a tankless system. 

Higher Initial Cost

Although tankless systems cost less to operate in the long run, their initial cost is usually much higher than tank-style units. 

Inconsistent Temperatures

With tank-style systems, you can set the temperature and know it will remain consistent. With tankless systems, temperatures can fluctuate depending on how much hot water you’re using and how powerful your unit is. 

While the upfront cost of a tankless water heater is higher than that of a tank-style unit, the energy savings, unlimited hot water supply, and longer lifespan may make it well worth the investment. Conversely, tankless water heaters may have inconsistent temperatures and aren’t always suitable for large households due to their power ratings. Do your research before purchasing to ensure that a tankless system is the right choice for your home.


When choosing a water heater, it’s important to consider all the factors before deciding. Tankless water heaters offer many advantages but require more electricity than traditional tank water heaters. However, with the right tips and maintenance, you can save money on your electric bill and still enjoy the many benefits tankless water heaters offer. Make sure to weigh all your options and choose the best water heater.

With years of experience under his belt, Adam decided to put his water heater knowledge to work. By providing high-quality content and expert guides, Adam hopes to help anyone looking for expert water heater advice.