Is it worth switching to an electric tankless water heater?

Author: Reyes Fahey  |  Last update: Thursday, May 1, 2025

Switching to a tankless water heater can help you save on your energy costs, with potential savings of up to 50%, according to the U.S. Department of Energy. Additionally, tankless water heaters are reported to be 24% to 34% more energy efficient than storage tank water heaters by the same source.

Should I switch to an electric tankless water heater?

Tankless water heaters can save you money on your energy bill in the long run, but they also require a greater initial financial investment upfront. Installation costs more, especially if you're installing your first tankless heater and require new gas lines and venting or a dedicated electrical circuit.

What is the downside of an electric tankless water heater?

Tankless Water Heater Cons

Installing a tank-style water heater typically costs about $900, while the average cost to install a tankless water heater can exceed $3,000. Limited Flow Rates: Reduced flow rates can lead to poor heating efficiency and low-temperature water.

Is it worth the money to get an electric tankless water heater?

Advantages and Disadvantages of Tankless Water Heaters

They can be 8%–14% more energy efficient for homes that use a lot of hot water -- around 86 gallons per day. In some cases you may be able to achieve even greater energy savings if you install a demand water heater at each hot water outlet.

Why avoid a tankless water heater?

Additional Installation Costs

Tankless water heaters are much more complex than traditional hot water tanks. As a result, they require professional installation. If you're switching from a hot water tank to a tankless unit, you will likely need your gas lines rerouted, as well as a larger gas supply line.

Pros And Cons Of Electric Tankless Water Heaters

Can I replace my 40 gallon water heater with a tankless water heater?

Absolutely! In fact, tankless water heaters are becoming the standard for new home construction because of the energy efficiency.

Should I get a gas or electric tankless water heater?

Gas tankless water heaters operate most cost-effectively in areas with high power and hot water demands. In contrast, electric heaters use most cost-effectively in areas with low water demands and energy costs. They also might be better in more rural areas with limited infrastructure.

Why don't more people use tankless water heaters?

Some people hesitate to decide on a tankless water heater because they can be a slightly higher cost; however, you get significantly more life out of one. A standard water heater tank lasts about 8-12 years. A tankless water heater can last as long as 25 years!

How much does your electric bill go up with a tankless water heater?

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.

Is there an IRS tax credit for a tankless water heater?

The federal tax credit for tankless water heaters in 2024 is an excellent opportunity for homeowners to save money while investing in energy-efficient water heating solutions. This tax credit is effective from January 1, 2023, to December 31, 2032.

What is the lifespan of an electric tankless water heater?

One of the most common questions asked by consumers about tankless water heaters is how long they will last. A tankless water heater can last anywhere from 15 to 20 years with proper maintenance and operation. In comparison, a standard tank water heater normally has a working life of 10 years or less.

Do electric tankless water heaters use a lot of electricity?

The EPA estimates that a tankless water heater uses up to 34% less energy than a storage tank water heater if you use 41 gallons or less of hot water daily. If the household uses closer to 86 gallons of hot water a day a tankless water heater will be up to 14% more efficient.

What is the downside of an electric water heater?

Electric Water Heaters: Pros and Cons

Electric water heaters confer multiple benefits over gas units, including ease of installation, higher efficiency levels and safer operation. On the flip side, they have their own unique challenges, like slower heating and vulnerability during power outages.

Can I replace my electric water heater with an electric tankless water heater?

Yes, you can replace your 40-gallon water heater with a tankless water heater, but you might have to upgrade your gas line or electrical system.

Is it worth converting to a tankless water heater?

Even for homes with high water usage, up to 85 gallons per day, tankless water heaters can offer up to 14% energy efficiency savings. However, while they offer energy savings, the higher upfront costs and installation expenses can result in a long payback period, ranging from 12 to 27 years.

Can an electric tankless water heater run a whole house?

Tankless water heaters come in two basic types. The type you choose depends on your home's design and your family's needs. Whole-house heaters — These models are large enough to supply hot water for all applications in the house, including the faucets and showers, washing machines, and dishwashers.

Is it worth the money to get a electric tankless water heater?

If energy conservation is a primary concern, you should look into a tankless water heater. According to Energy Saver, homes that use 41 gallons or less of hot water daily can achieve 24 to 34 percent more energy efficiency with tankless compared to conventional storage tank water heaters.

Why is tankless water heater installation so expensive?

Installing a tankless water heater can require gas line upgrades, electrical modifications, and specialized venting—all of which can increase costs. Professional labor also runs from $500–$1,500 due to complex installation requirements.

What is the downfall to a tankless water heater?

A tankless water heater cannot provide hot water faster than its ability to heat the water. While a tank unit can provide hot water for multiple uses at once, a tankless unit might not be able to support simultaneous usage, such as washing dishes, taking a shower and running a washing machine all at once.

Can multiple people shower at the same time with a tankless water heater?

A: Yes, but depending on the wattage of your unit, and the temperature you set, the pressure may go down.

Are electric tankless water heaters problematic?

Inconsistent water temperature can be frustrating. Issues with the flow rate, a dirty filter, or a faulty temperature sensor may cause this. Experiencing sudden changes in water temperature, known as the “cold water sandwich” effect, is another common problem with tankless water heaters.

How much does an electric tankless water heater cost?

An electric unit costs up to $800 on average, a gas-powered system can cost from $230 to $2,300, and propane-powered heaters run from $195 to $2,200. However, oil-fueled tankless water heaters range from $1,000 to $3,000.

What maintenance does a tankless water heater need?

The most complicated and time-consuming tankless water heater maintenance is typically descaling and flushing out the unit. Even with the inline water filter, lime and calcium deposits can build up inside the tankless system. If you have hard water, it's a good idea to descale and flush the unit once a year.

Is it worth to switch from gas to electric water heater?

Gas water heaters are typically more expensive to install than electric ones, use more energy, and tend to last shorter periods. Electric water heaters are cheaper to install but use less energy and last longer. Ultimately, the best choice for you will depend on your specific needs and budget.

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