Do Tankless Water Heaters Save Money?

You may have heard or read something recently that mentioned tankless water heaters as an energy efficient “green” alternative to the traditional tank heaters. Tankless water heaters are often advertised as being more energy efficient and a good way to save money each month on energy bills. So, do tankless water heaters really save money?

There is much conflicting information on the subject and it’s very important to read the fine print when it comes to making a decision about which type of water heater is best for your purposes. Is your main goal to use less energy or to save money?

The simple answer is that it is unlikely that a tankless water heater will save you money when you consider all the costs involved. However they may run more efficiently, though even that is not guaranteed, and depends on how they are used.

The initial cost to buy and install tankless water heaters can be up to three times the cost of traditional tank water heaters, and they require regular yearly maintenance unlike traditional tank heaters.

Tankless water heaters have many moving parts and electronic components making them more prone to needing repair as well, so even if they do save money each month on heating bills, it is unlikely that you will ever recoup your costs to buy, install and maintain a tankless water heater.

Depending on individual use, a tankless heater may save up to 20% on electricity or gas per month, however they can sometimes cost more to operate than a well insulated tank water heater. The best way to save money on hot water is to insulate the hot water pipes between the water heater and the fixtures to keep the heat from radiating away while the hot water is moving through the pipes.

There is a common misconception that tankless water heaters deliver instantaneous hot water but that is not the case unless the water heater is installed very close to the plumbing fixture being used. It takes the same amount of time for hot water to travel through the pipes with either type of water heater. Traditional tank heaters actually have hot water ready to go while the tankless heater has to turn on and start heating the water when it detects a demand, so in fact most tankless water heaters will take longer to deliver hot water than a traditional tank water heater.

Pros: Tankless water heaters can be more energy efficient, are compact and take up less space than a traditional tank water heater and can provide continuous hot water over a long period of time.

Cons: Tankless water heaters are more expensive and mechanically complicated than tank water heaters and are not able to deliver as much hot water simultaneously as a traditional tank water heater.

Each situation is different and there are many factors to weigh in determining which type of water heater is best for your purposes. Do tankless water heaters save money? The bottom line is you may be able to lower your monthly electric or gas bill with a tankless water heater, however it will take a long time to recoup your initial costs, and with regular maintenance costs, it’s unlikely you will save money when all costs are factored in.

For more information about the pros and cons as well as energy costs of tankless water heaters, please refer to the following article:

Edited and posted by

McKee Homes online marketing manager

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29 thoughts on “Do Tankless Water Heaters Save Money?

  1. It’s good to know that tankless water heaters are more energy-efficient than the traditional tank heaters. Moreover, they also take up less space because of their compactness. My husband and I are having another new house built soon, so perhaps it would be wise to have a tankless water heater installed. Thanks for this!

  2. Tankless water heaters can save money. Wow! That’s a wonderful concept. Thank you very much for this information. Saving money is a very important thing and worth concern for all. This post was worth reading. I would love to see more good posts like this in future too.

  3. There is always a confusion in our mind about when we install a tankless water heater it save money or not. This post has defined all the information about the tankless water heaters cost. Thank you very much for providing this. Next time we will consider all the costs included before reaching any conclusion.

  4. Iā€™m glad reading your article. I want to make sure that I get the right water heater. It makes sense that a tank less water heater would be beneficial! The website style is wonderful, the articles is really great.

  5. This post contains excellent details. Water heaters, i think are essential for every home. Making sure to get your installation professionally done is a good way to save money in the long run.

  6. It’s good to know that common kitchen items can do the trick! I just moved into a new home with a gas water heater, and I am used to having an electric one. Nice information, Thanks for sharing.

  7. Interesting I found this blog by accident. Really glad I did though, I’ll be back from now on. It can be difficult to find good blogs nowadays. Found one here though by the looks of things.

  8. I appreciate the information you have provided, It definitely would be good to check! Thank you for your comment and for checking out our blog! Tankless water heaters are a necessity of our lives actually. Thanks for sharing.

  9. Informative!! You provide a great input on saving using tankless water heaters. Most thing I loved with tankless is you don’t have to worry running out of hot water.

  10. Hi, I am very happy, You explanation is very simple which is very easy to understand.Great read thanks for share a real content. Thanks a lot.

  11. I liked that you talked about how a tankless water heater will take up less space. It does seem like a good thing to be aware of when you need to have installed the heater for you so you know it will work properly. So, it does seem like a good idea to know what space you are going to have to put the tank in. I have been considering getting a new tank soon and this would be good for me to consider.

  12. This is some really good information about water heaters. I like that you talked about you should have try using a tankless water heater. It does seem like a good thing to be aware when you want to have hot water and not lose a lot of money. I hate not being able to take long hot showers.

  13. Nice Blog! Thanks for sharing this one great post by blogger well,we have see its all thing will be very intresting post! I appreciate to blogger well, good Job, Thanks again.

  14. My husband and I are wanting to replace our water heater, and we want to know which type will be the best. Obviously, money and energy efficiency are big aspects in considering this. I did not realize that the initial cost of a tankless water heater is so much more upfront in comparison to traditional tank water heaters. Thank you for sharing! We will be sure to take this information into account for our new water heater installation.

  15. Yes, tankless water heater saves the penny. And they are best for the performance. I would really recommend the tankless water heater for the beginner and who are thinking to purchase the water heater for the 1st time. Thanks.

  16. I am already using one of the best tankless water heater and I know how a tankless water heater can help to save some money. BTW nice explanation and thanks for sharing. I hope this post will help others. šŸ™‚

  17. I appreciate your post. All of my friends have been telling me that they prefer tankless water heaters. Mostly because of the money they save on their energy bill. However, I don’t much like the idea of waiting longer for cold water. It is kind of a waste, and I am impatient. So, I will probably stick to the more traditional water heaters. If it ain’t broke, don’t fix it.

  18. This is some great information, and I appreciate your point that tankless water heaters can provide continuous hot water over a long time. My husband and I have five kids, so getting everyone through the shower in the morning sometimes leaves one or two of them without heat. We’ve been wanting to upgrade our unit for a while, so we’ll definitely look into installing a tankless one. Thanks for the great post!

  19. Having a water heater that is energy is efficient is very desirable. I am impressed at all the benefits that water heaters can bring. That is smart to always leave the installation of your water heater to a professional.

  20. We were redesigning our bathroom not so long ago and got rid of our traditional water heater. We bought tankless one and for now (2 years and counting) we can not be happier about that decision.

    It’s impossible to ran out of hot water and I must say my daughters love it… even to much šŸ˜‰

  21. This is some great information, and I appreciate your point that tankless water heaters can provide continuous hot water over a long period of time. My husband and I have five kids, so there are a lot of us that have to share hot water for our morning showers, and usually the last two people don’t even have any. I’ll definitely look into the option of getting a tankless water heater so we don’t run out. Thanks for the great post!

  22. That is awesome that tankless water heaters help save you money each month on your energy bill. I love the idea of never running out of hot water. Right now I live in small apartment and it seems to always run out of hot water. That is so cool that a tankless water heater can hold up to 300 gallons of water verses a normal size tank with 80 gallons. Thank you for sharing why updating your water heater to a tankless option would be a great idea!

    • Actually tankless water heaters do not hold more water than a standard tank water heater. In fact they don’t store or reheat water which is why they can be more efficient. Tankless water heaters heat water as it passes through the heater only when the water is needed so there is no hot water storage.

  23. I really like how you explained that its not necessarily that tank-less water heaters will save you money, but more that they run more efficient. I still think its an advantage to have them because you will never run out of hot water again. My house has six kids in it and we are always running out of hot water in the morning. How much does a tank-less heater cost?

  24. Wow, I didn’t realize the initial cost could be three times that of traditional water heaters. I also didn’t realize that they can take longer to deliver hot water than the tank heaters. However, I really like the idea of being more energy efficient, and I still feel like a tankless heater is going to be our best option. Thanks!

  25. My wife and I were just made aware of a tankless water heater option for our home. My wife and I are always looking to save money, but it sounds like this option can sometimes be more expensive and complicated. We may just invest in a regular water heater so thanks for sharing this with me!

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