Tankless Water Heater Savings Calculator

Why Consider a Tankless Water Heater?

Tankless water heaters are designed to heat water only when you need it, unlike traditional tank heaters that keep gallons of water hot around the clock.

Here’s what that means for you:

• Lower energy bills – No more standby losses from a water tank reheating itself.
• Endless hot water – Great for families with back-to-back showers or heavy laundry days.
• Longer lifespan – Tankless units typically last 20+ years, while tank heaters average 8–12 years.
• More space – Wall-mounted units free up valuable floor space.

But the real question remains: Will it actually save you money?

How the Calculator Works

The calculator uses your inputs to estimate savings. The formula compares the Energy Factor (EF) of your old heater versus a new tankless model.

[
\text{Annual Cost} = \frac{\text{Annual BTU Demand}}{\text{Fuel Energy Content × Efficiency}} \times \text{Fuel Cost}
]

• Annual BTU Demand: Assumed at 2,000,000 BTUs (average for household hot water use).
• Fuel Energy Content:
  • 1 kWh = 3,412 BTUs
  • 1 Therm = 100,000 BTUs
• Efficiency (EF): Each heater type has its own rating.
• Fuel Cost: Your local rates ($/kWh or $/Therm).

The calculator compares your current system with your chosen tankless upgrade and shows savings and payback time.

Heater Options in the Calculator

The calculator includes real-world heater types so you get practical numbers:

Current Systems

• Electric Tank (EF 0.92) – Standard electric storage heater.
• Gas Tank (EF 0.60) – Common gas storage heater.
• Older Gas Tank (EF 0.55) – Less efficient models, typical in older homes.

Tankless Upgrades

• Electric Tankless (EF 0.99) – Very efficient, but may require heavy electrical service.
• Gas Condensing Tankless (EF 0.95) – High efficiency, often Energy Star rated.
• Gas Non-Condensing Tankless (EF 0.82) – More affordable but less efficient than condensing.

Example: Real-Life Savings

Let’s say you currently have an older gas tank heater (EF 0.55). Your local natural gas cost is $1.20 per Therm, and you’re considering a gas condensing tankless heater (EF 0.95) with a $4,500 installed price.

• Current annual cost: $436.36
• Tankless annual cost: $252.63
• Annual savings: $183.73
• Payback period: ~24.5 years

Depending on your local utility rates, efficiency gaps, and how long you stay in your home, the payback period may vary. But remember—this doesn’t include non-financial benefits like unlimited hot water, more space, and reduced maintenance.

How to Use the Calculator

1. Select Current System → Your existing tank water heater type and fuel.
2. Select New Tankless System → The upgrade you’re considering.
3. Enter Energy Costs → Electricity ($/kWh) and Natural Gas ($/Therm).
4. Enter Installed Price → Total cost of your new tankless system.
5. Click Calculate → Instantly see your operating costs, savings, and payback.

You can also reset anytime and try different scenarios.

Key Benefits of the Savings Calculator

Simple & fast – No spreadsheets or complex math needed.
Custom to your home – Works with your actual utility rates and heater types.
Financial clarity – Know whether switching to tankless makes sense for your wallet.
Helps plan ahead – Compare electric vs. gas options before investing.

Limitations & Disclaimer

This calculator provides estimates only. Results may vary based on:

• Actual hot water demand (your household may use more or less than the assumed 2,000,000 BTUs).
• Regional fuel prices, which fluctuate.
• Installation conditions (retrofits may cost more).
• Maintenance and service life differences.

For highly accurate projections, consult with a local plumber or HVAC professional.