Are you considering switching to a tankless water heater but wondering about the electricity costs? You’re not alone. Many homeowners are surprised to learn that while tankless water heaters are more efficient overall, they can consume significant amounts of electricity during operation—sometimes drawing 20-36 kW of power when active.
The reality is more nuanced than simple comparisons suggest. An electric tankless water heater typically uses 20-50 kWh per month for an average household, but this varies dramatically based on your family size, usage patterns, and local climate conditions. Understanding these consumption patterns is crucial for making an informed decision about your home’s hot water system.
In this comprehensive guide, we’ll break down exactly how much electricity tankless water heaters use, compare costs with traditional tank systems, and provide real-world examples to help you calculate your potential energy expenses.
Quick Answer: Monthly Electricity Usage
For most households, an electric tankless water heater consumes between 20-50 kWh per month. Here’s a quick breakdown:
- Single person household: 8-15 kWh monthly
- 2-person household: 15-25 kWh monthly
- Family of 4: 25-40 kWh monthly
- Large household (5+ people): 40-60+ kWh monthly
At the national average electricity rate of $0.17 per kWh, this translates to roughly $3.40-$8.50 per month in electricity costs for most families. However, several key factors significantly impact these numbers, which we’ll explore in detail below.
Understanding Tankless Water Heater Electricity Consumption
How Electric Tankless Water Heaters Work
Electric tankless water heaters operate fundamentally differently from traditional tank systems. When you turn on a hot water tap, cold water flows through the unit and passes over powerful electric heating elements that instantly heat the water to your desired temperature. This on-demand heating eliminates the standby energy losses associated with keeping a tank of water hot 24/7.
Power Ratings Explained: kW vs kWh
Understanding the difference between kilowatts (kW) and kilowatt-hours (kWh) is essential for calculating electricity costs:
- Kilowatts (kW): The instantaneous power demand—how much electricity the unit draws when operating
- Kilowatt-hours (kWh): The actual energy consumed over time—what appears on your electric bill
A typical whole-house electric tankless water heater requires 18-36 kW of instantaneous power. This high power demand is necessary to heat water quickly as it flows through the unit. However, the unit only operates when hot water is being used, typically totaling just 1-3 hours per day for most households.
Modulating Power Consumption
Modern tankless water heaters don’t always operate at maximum power. They modulate their electricity consumption based on:
- Water flow rate through the unit
- Incoming water temperature
- Desired output temperature setting
- Number of fixtures using hot water simultaneously
For example, a 24 kW unit might only draw 12 kW when heating water for a single bathroom sink, but require full power when supplying a shower and dishwasher simultaneously.
Detailed Consumption Breakdown by Household Size
Single Person/Studio Apartment: 8-15 kWh Monthly
A single-person household typically uses 20-30 gallons of hot water daily. With minimal simultaneous usage, a smaller 10-15 kW tankless unit is usually sufficient. Monthly electricity consumption averages:
- Daily usage: 0.3-0.5 kWh
- Monthly total: 8-15 kWh
- Monthly cost: $1.36-$2.55 (at $0.17/kWh)
2-Person Household: 15-25 kWh Monthly
Two-person households generally consume 30-50 gallons of hot water daily. A 15-20 kW unit typically handles this demand efficiently:
- Daily usage: 0.5-0.8 kWh
- Monthly total: 15-25 kWh
- Monthly cost: $2.55-$4.25 (at $0.17/kWh)
Family of 4: 25-40 kWh Monthly
A typical family of four uses 50-80 gallons of hot water daily, requiring a robust 20-28 kW system:
- Daily usage: 0.8-1.3 kWh
- Monthly total: 25-40 kWh
- Monthly cost: $4.25-$6.80 (at $0.17/kWh)
Large Household (5+ People): 40-60+ kWh Monthly
Households with five or more people often require multiple tankless units or a single high-capacity 30+ kW system:
- Daily usage: 1.3-2.0+ kWh
- Monthly total: 40-60+ kWh
- Monthly cost: $6.80-$10.20+ (at $0.17/kWh)
Factors Affecting Electricity Usage
Incoming Water Temperature
Your location’s climate significantly impacts electricity consumption. The colder your incoming water, the more energy required to heat it:
- Warm climates (Florida, Arizona): Incoming water: 70-80°F
- Moderate climates: Incoming water: 50-65°F
- Cold climates (Minnesota, Maine): Incoming water: 35-50°F
A household in Minnesota might use 30-40% more electricity than the same household in Florida due to colder incoming water temperatures.
Temperature Settings and Flow Rate
Your hot water temperature setting directly affects electricity consumption. Most units are factory-set to 120°F, but many homeowners increase this to 130-140°F, resulting in 15-25% higher electricity usage.
Flow rate also matters significantly. High-flow showerheads (2.5+ GPM) require more power than low-flow alternatives (1.5-2.0 GPM) to maintain consistent temperature.
Unit Efficiency and Age
Newer tankless water heaters achieve 95-98% efficiency, meaning nearly all electricity consumed goes toward heating water. Older units or those with mineral buildup may operate at 80-90% efficiency, requiring more electricity for the same hot water output.
Electric vs Gas Tankless: Electricity Comparison
While gas tankless water heaters primarily use natural gas or propane for heating, they still require electricity for:
- Electronic ignition systems
- Digital controls and displays
- Circulation pumps (if equipped)
- Venting fans
Gas tankless units typically consume 25-130 watts of electricity during operation, plus 2-5 watts on standby. This translates to roughly 2-8 kWh monthly—significantly less than electric units.
However, you must factor in gas costs. While gas tankless units use less electricity, the total energy costs often depend on local utility rates for both electricity and natural gas.
Tankless vs Traditional Tank Water Heaters
Energy Efficiency Comparison
The Department of Energy estimates that tankless water heaters can be 24-34% more energy efficient than conventional tank water heaters for households using 41 gallons or less of hot water daily. For higher-usage households, the efficiency advantage drops to 8-14%.
Power Consumption Patterns
Traditional electric tank water heaters typically draw 4.5 kW continuously for 2-3 hours daily to maintain water temperature, consuming 9-14 kWh daily. In contrast, tankless units draw higher instantaneous power (18-36 kW) but operate for shorter periods (30-60 minutes daily).
Peak Demand Considerations
While tankless units may use less total energy, their high instantaneous power draw can impact your electrical system and potentially trigger demand charges from your utility company. Some utilities charge additional fees for high peak demand, which could offset energy savings.
Real-World Case Studies
Case Study 1: Family of 4 in Moderate Climate
The Johnson family in Denver, Colorado installed a 24 kW tankless water heater to replace their aging 50-gallon tank unit. Their usage patterns include:
- Two morning showers (15 minutes total)
- Evening dishwasher cycle
- Occasional laundry loads
- Weekend baths for children
Results: Monthly electricity consumption dropped from 380 kWh (tank) to 32 kWh (tankless), saving approximately $59 monthly at their local rate of $0.17/kWh.
Case Study 2: Couple in Cold Climate
A retired couple in Burlington, Vermont uses a 18 kW tankless unit. With incoming winter water temperatures around 38°F, their consumption peaks during cold months:
- Summer months: 18-22 kWh
- Winter months: 28-35 kWh
- Annual average: 24 kWh monthly
Their annual electricity costs for hot water average $49, compared to an estimated $190 with their previous tank system.
Optimization Strategies for Reducing Electricity Usage
Temperature Setting Optimization
Reducing your water heater temperature from 140°F to 120°F can decrease electricity consumption by 6-10%. For every 10°F reduction, expect approximately 3-5% energy savings.
Low-Flow Fixtures
Installing low-flow showerheads and faucet aerators reduces the volume of hot water needed, directly decreasing electricity consumption. A reduction from 2.5 GPM to 1.8 GPM can lower energy usage by 25-30%.
Pipe Insulation
Insulating hot water pipes reduces heat loss during transport, allowing you to set lower temperatures while maintaining comfort. This can reduce electricity consumption by 2-4%.
Usage Pattern Adjustments
Coordinating hot water usage can improve efficiency. Running multiple hot water appliances simultaneously maximizes the unit’s efficiency rather than triggering multiple startup cycles throughout the day.
For homeowners looking to maximize energy efficiency throughout their entire home, combining tankless water heaters with smart home technology can provide comprehensive energy management solutions.
Electrical Requirements and Installation Considerations
Circuit and Wiring Requirements
Electric tankless water heaters require substantial electrical infrastructure:
- 18 kW unit: 75-amp circuit
- 24 kW unit: 100-amp circuit
- 36 kW unit: 150-amp circuit
Many homes require electrical panel upgrades to accommodate these high-power units, adding $1,500-$3,000 to installation costs. For homeowners considering transforming their home into an energy-efficient powerhouse, understanding these electrical requirements is crucial for planning comprehensive energy solutions.
Professional Installation Importance
Due to high electrical demands and safety considerations, professional installation is essential. Improper installation can result in:
- Inadequate hot water supply
- Electrical safety hazards
- Voided manufacturer warranties
- Code violations
Professional installers ensure proper integration with your home’s electrical system and compliance with all safety codes, particularly important when considering future energy storage additions.
Conclusion
Electric tankless water heaters typically consume 20-50 kWh monthly, translating to $3.40-$8.50 in electricity costs for most households. While they use less total energy than traditional tank systems, their high instantaneous power requirements and installation complexity require careful consideration.
The decision to install a tankless water heater should factor in your household size, usage patterns, local electricity rates, and existing electrical infrastructure. For smaller households with consistent usage patterns, the energy savings can be substantial. Larger families or homes with inadequate electrical service may find the installation costs and operational limitations challenging.
For homeowners concerned about high electricity usage from tankless water heaters, exploring residential solar panels can provide a sustainable solution to offset increased electrical consumption while reducing overall energy costs.
Before making a decision, calculate your specific usage needs, obtain quotes for any necessary electrical upgrades, and consider consulting with a qualified electrician or energy auditor to determine if a tankless water heater is the right choice for your home.