Tankless water heaters have exploded in popularity thanks to their promise of endless hot water and energy savings. But do they actually use more electricity than traditional tank models? If you’re considering a switch—especially to an electric tankless heater—understanding how these units use power is crucial for comfort, utility bills, and your home’s electrical system. In this guide, you’ll find clear, honest answers about tankless water heater electricity usage, real-world comparisons, best practices for saving energy, and the top products for efficiency.
Quick Picks: Best Energy-Saving Tankless Water Heaters
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Best Overall Electric:
EcoSmart ECO 18 Electric Tankless Water Heater – Self-modulating technology and digital controls keep electricity use in check. -
Best Gas Alternative:
Rheem Performance Platinum 9.5 GPM Condensing Gas Tankless Water Heater – Ultra-high efficiency, less electrical draw, and lower operating costs. -
Best for Small Homes:
Stiebel Eltron DHC-E 12 Electric Tankless Water Heater – Ideal for point-of-use or whole-house in mild climates.
How Tankless Water Heaters Use Electricity (And When They Don’t)
- Electric Tankless Models: Heat water on demand using high-wattage heating elements. Only use electricity when hot water is running.
- Gas Tankless Models: Use a gas burner to heat water but still require electricity for ignition, controls, and vent fans—typically a very small amount.
- Traditional Electric Tank Water Heaters: Keep a full tank of water hot 24/7, cycling the heating elements on and off even when you’re not using hot water.
Key takeaway: Electric tankless water heaters can use a lot of power—but only when hot water is needed. Gas tankless models draw very little electricity.
Do Electric Tankless Water Heaters Use More Electricity Than Tank Models?
- Per Hour: Electric tankless models can draw 60–120 amps at once (14,000–28,000 watts), much higher than tank models (typically 18–25 amps, 4,500–6,000 watts).
- Per Year: Tankless heaters are “off” most of the day and only run when hot water is needed. Tank models maintain water temperature all day, even during standby.
- For Small, Frequent Uses: Tankless models are far more efficient—no energy lost keeping water hot between uses.
- For Long Showers or Simultaneous Use: Electric tankless heaters use high current while water is flowing, but total energy use is often similar or lower over time.
In most homes: Tankless water heaters use less total electricity per year, but require higher amperage wiring and breakers. Gas tankless models use very little electricity and are even more efficient.
Electric Tankless vs Gas Tankless vs Electric Tank: Power Comparison
| Type | Power Draw | Electricity Use (kWh/year) | Typical Operating Cost | Notes |
|---|---|---|---|---|
| Electric Tankless | 14,000–28,000W (on demand) | ~2,500–4,500 | Moderate–High (depends on rates) | High amps, needs large breakers |
| Electric Tank | 4,500–6,000W (cycles on/off) | ~4,500–6,000 | Moderate–High | Standby losses 24/7 |
| Gas Tankless | ~60–120W (for ignition/fans) | < 100 | Lowest for gas homes | Needs gas line/venting |
Buyer’s Guide: What to Know Before Switching to Tankless
- Electrical Service: Most electric tankless heaters need 100–150 amps of available capacity. Your home may need a panel upgrade.
- Wiring & Breakers: Each unit needs heavy-gauge wire and 2–3 dedicated 240V breakers. Never use undersized wiring.
- Hot Water Needs: Tankless models excel in homes with intermittent hot water use or small households.
- Energy Efficiency: Both electric and gas tankless models are 10–35% more efficient than tanks—especially in homes with low hot water usage.
- Installation Costs: Electric tankless may cost more to install if you need electrical upgrades, but operating savings are real over time.
- Gas vs Electric: Gas tankless units are usually cheaper to operate and use little electricity, but require gas lines and venting.
- Maintenance: Both types should be flushed yearly for long life and top performance.
How to Use Less Electricity with a Tankless Water Heater
- Set your temperature to 120°F—hot enough for comfort, but not wasteful
- Install low-flow showerheads and aerators to reduce water (and power) use per minute
- Fix leaky faucets and insulate hot water pipes
- Flush your heater annually to prevent scale buildup and loss of efficiency
- For electric models, avoid running multiple hot water taps at the same time
- Consider a gas tankless if your home already uses natural gas or propane
Top Energy-Efficient Tankless Water Heaters: Reviews
EcoSmart ECO 18 Electric Tankless Water Heater
- Self-modulating technology adjusts energy use to demand
- Digital temp control for precise comfort
- Compact and wall-mounted—frees up floor space
- Perfect for small to medium homes in warm climates
Final Verdict: A smart, efficient upgrade for households looking to save energy.
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Rheem Performance Platinum 9.5 GPM Condensing Gas Tankless Water Heater
- Ultra-high efficiency—up to 94% UEF
- Very low electricity draw—only for controls and vent fan
- Can run multiple showers at once (9.5 GPM)
- Durable stainless steel heat exchanger
Final Verdict: The best overall for energy savings and low electricity use.
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Stiebel Eltron DHC-E 12 Electric Tankless Water Heater
- Compact, easy-to-install, and great for point-of-use or small homes
- Modulates power for efficiency and comfort
- Reliable German engineering and support
Final Verdict: Ideal for condos, studios, and single-bath homes.
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FAQ: Electricity Use & Tankless Water Heaters
- Will a tankless water heater raise my electric bill?
Electric tankless units can have a higher momentary power draw, but usually lower your annual electricity use compared to tank models—especially if you use hot water sporadically. - Do gas tankless water heaters use much electricity?
No, they use very little—mainly for ignition, sensors, and vent fans. - Do I need to upgrade my electrical panel?
Many homes do. Check your panel’s capacity and consult a licensed electrician before installing an electric tankless heater. - Are tankless heaters more efficient than tanks?
Yes, especially if you don’t use hot water constantly throughout the day. - Is a tankless heater right for my home?
If you want energy savings, instant hot water, and have the right electrical or gas setup, a tankless model is a smart upgrade.
Conclusion
A tankless water heater can use more electricity per minute than a tank model—but over a year, it usually uses less energy overall. Gas tankless models use very little electricity, while electric tankless units offer efficiency and savings for the right homes. Choose a high-quality, efficient model, install it with the correct wiring or gas line, and enjoy endless hot water with lower bills and no wasted energy.