An electric tankless water heater uses 8–20 kWh per day for a typical household, costing $1.00–$3.50 per day at the national average electricity rate of $0.167/kWh. That translates to $30–$105 per month or $365–$1,260 per year, depending on your unit size, hot water usage, groundwater temperature, and local electricity rate.
The key insight: electric tankless heaters draw enormous power (18–36 kW) but only run for 20–60 minutes per day. They use zero electricity when no faucet is open — unlike tank heaters that cycle on and off 24/7 to maintain temperature.
The Core Formula
Electric tankless energy consumption follows a simple equation:
kWh per day = kW rating x Hours of active heating per day x Load factor
The load factor accounts for the unit's self-modulating technology, which reduces power draw based on demand. At a kitchen faucet (1.0 GPM), a 27 kW unit might only draw 12 kW. At two showers (4.0 GPM), it draws the full 27 kW. The average load factor for residential use is 0.55–0.75, meaning the unit runs at 55–75% of maximum power on average.
Practical formula:
kWh/day = (Gallons of hot water per day x Temperature rise) / (5.86 x 60)
This bypasses the load factor entirely by calculating from actual hot water usage.
Example: Family of 4
Daily hot water use: 60 gallons. Groundwater temp: 55F. Desired temp: 120F. Temperature rise: 65F.
kWh/day = (60 x 65) / (5.86 x 60) = 3,900 / 351.6 = 11.1 kWh
At $0.167/kWh: $1.85/day, $56/month, $678/year.
Electricity Usage by Unit Size
Here is the expected daily and monthly electricity consumption for every common electric tankless size, assuming a family of 3–4 using 50–65 gallons of hot water per day:
| Unit Size | Warm Climate (45F rise) | Moderate Climate (60F rise) | Cold Climate (80F rise) |
|---|---|---|---|
| 8 kW (point-of-use) | 2–4 kWh/day ($10–$20/mo) | 3–5 kWh/day ($15–$25/mo) | 4–7 kWh/day ($20–$35/mo) |
| 13 kW (point-of-use) | 3–6 kWh/day ($15–$30/mo) | 4–8 kWh/day ($20–$40/mo) | 5–10 kWh/day ($25–$50/mo) |
| 18 kW (mid-range) | 5–9 kWh/day ($25–$45/mo) | 7–12 kWh/day ($35–$60/mo) | 9–16 kWh/day ($45–$80/mo) |
| 24 kW (whole-home) | 6–11 kWh/day ($30–$55/mo) | 8–14 kWh/day ($40–$70/mo) | 11–19 kWh/day ($55–$95/mo) |
| 27 kW (whole-home) | 7–12 kWh/day ($35–$60/mo) | 9–15 kWh/day ($45–$75/mo) | 12–20 kWh/day ($60–$100/mo) |
| 36 kW (whole-home) | 8–14 kWh/day ($40–$70/mo) | 10–18 kWh/day ($50–$90/mo) | 14–24 kWh/day ($70–$120/mo) |
These ranges reflect household sizes from 1–2 people (lower end) to 4–5 people (upper end). Monthly costs assume $0.167/kWh (2026 national average).
Why the range is so wide: A single person taking short showers uses 20–30 gallons per day. A family of 5 with a dishwasher and washing machine uses 80–100 gallons. Climate doubles the temperature rise. A single person in Florida (25 gal/day, 45F rise) uses 3.2 kWh/day. A family of 5 in Minnesota (90 gal/day, 80F rise) uses 20.5 kWh/day — a 6x difference.
Electricity Cost by State
Your electricity rate dramatically affects the monthly cost. Here is what a typical family (60 gallons/day, 60F rise = ~10.2 kWh/day) pays across different states:
| State | Avg Rate ($/kWh) | Monthly kWh | Monthly Cost | Annual Cost |
|---|---|---|---|---|
| Louisiana | $0.104 | 306 | $32 | $382 |
| Idaho | $0.110 | 306 | $34 | $404 |
| Texas | $0.135 | 306 | $41 | $496 |
| Florida | $0.145 | 306 | $44 | $533 |
| National Average | $0.167 | 306 | $51 | $614 |
| Oregon | $0.128 | 306 | $39 | $470 |
| Colorado | $0.155 | 306 | $47 | $569 |
| New York | $0.210 | 306 | $64 | $772 |
| California | $0.270 | 306 | $83 | $992 |
| Massachusetts | $0.285 | 306 | $87 | $1,047 |
| Connecticut | $0.295 | 306 | $90 | $1,083 |
| Hawaii | $0.385 | 306 | $118 | $1,416 |
California and Hawaii reality: At $0.27–$0.39/kWh, an electric tankless water heater can cost $80–$120/month to operate. In these markets, gas tankless (where available) is often cheaper to operate, and heat pump water heaters offer the best economics.
Electric Tankless vs Tank: Energy Comparison
The common claim is that tankless heaters save 24–34% on water-heating energy. Here is the math:
| Metric | Electric Tank (50 gal) | Electric Tankless (27 kW) | Savings |
|---|---|---|---|
| UEF (efficiency) | 0.92–0.95 | 0.99 | 4–7% more efficient |
| Standby loss per day | 1.5–3.0 kWh | 0 kWh | 100% eliminated |
| Active heating (60 gal, 60F rise) | 10.8 kWh/day | 10.2 kWh/day | 5.6% less |
| Total daily usage | 12.3–13.8 kWh | 10.2 kWh | 20–26% less |
| Annual usage | 4,490–5,037 kWh | 3,723 kWh | 767–1,314 kWh saved |
| Annual cost at $0.167/kWh | $750–$841 | $622 | $128–$219 saved |
| Annual cost at $0.27/kWh | $1,212–$1,360 | $1,005 | $207–$355 saved |
The biggest source of savings is eliminating standby loss. A tank heater loses 1.5–3.0 kWh per day just keeping stored water hot, even when nobody uses any hot water. Over a year, that is 550–1,095 kWh of pure waste, costing $90–$300 depending on your electricity rate.
Vacation Homes: The Killer App
If you own a vacation home that sits empty 75% of the year, standby losses are devastating. A 50-gallon electric tank wastes $270–$750 per year heating water nobody uses. A tankless unit uses zero electricity during those empty months. Annual savings: 70–80%.
How to Reduce Electricity Usage
1. Lower the Set Temperature
Every degree below 120F saves roughly 3–5% on energy. Most fixtures work fine at 115F. Only dishwashers truly need 120F, and many modern dishwashers have internal heaters.
2. Install Low-Flow Fixtures
A 1.5 GPM showerhead uses 25% less hot water (and energy) than a 2.0 GPM head. A 1.0 GPM faucet aerator cuts sink usage by 33%. Total household savings: 15–25% less hot water demand.
3. Fix Leaks
A dripping hot water faucet at 1 drip per second wastes about 1,660 gallons per year — that is 2.7 kWh/day at a 60F rise, or $165/year at $0.167/kWh.
4. Time Your Usage
If your utility offers time-of-use (TOU) rates, shift heavy hot water use (dishwasher, laundry) to off-peak hours. Peak vs off-peak can differ by 50–100%, meaning a load of laundry costs half as much at 10 PM as at 5 PM.
5. Insulate Pipes
Insulating the first 6 feet of hot and cold water pipes from the heater reduces heat loss in transit. Foam pipe insulation costs $0.50–$1.00 per foot and installs in minutes.
Gas Tankless Electricity Usage
Gas tankless units also use a small amount of electricity for their electronic ignition, control board, and flow sensor. Typical draw: 3–5 watts standby, 65–85 watts when firing. Annual electricity usage: roughly 50–100 kWh, costing $8–$17 per year.
This is separate from the gas cost. Including both gas and electricity, a gas tankless costs:
| Component | Annual Usage | Annual Cost |
|---|---|---|
| Natural gas (60 gal/day, 65F rise) | 200–280 therms | $220–$420 |
| Electricity (controls) | 50–100 kWh | $8–$17 |
| Total annual energy cost | — | $228–$437 |
Key Takeaways
- Typical usage: 8–20 kWh/day ($30–$105/month at national average rates)
- Zero standby loss — the biggest advantage vs tank heaters, saving 550–1,095 kWh/year
- Climate is the biggest variable — cold groundwater can double energy consumption
- Your electricity rate matters enormously — $0.10/kWh vs $0.30/kWh creates a 3x cost difference
- Savings vs electric tank: 20–26% of total energy, primarily from eliminating standby loss
- Low-flow fixtures cut usage 15–25% — the cheapest energy upgrade available
- Vacation homes see the biggest savings — no standby waste during empty months
Frequently Asked Questions
If you're replacing a gas tank with an electric tankless, your electric bill will increase (by $30–$80/month), but your gas bill will decrease (by $20–$40/month). The net effect depends on local gas vs electricity prices. If you're replacing an electric tank with an electric tankless, your electric bill will decrease by 20–26%. If you're adding a tankless where none existed, expect a $30–$105/month increase.
Sources & References
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