With the invention of tankless electric water heaters, consumers are promised a quick and abundant supply of hot water anytime they need it. (In a home with two teenagers, endless hot water seems like a dream!) It's no wonder why over 9 million units are sold each year in the US. But considering they may be more expensive up front and require an upgrade to your electrical systems, does it make sense for you to replace your tank-type water heater with an electric tankless one? To make that determination, it is important to look at the one-time installation costs, annual maintenance, and the monthly cost of electricity.
(Before we dive into this topic, take a moment and read how a tankless water heater works vs. a traditional tank-type storage water heater if you don't already know.)
How much does it cost to install tankless electric water heaters?
According to Angie's List, the average electric tankless water heater costs $1,063 for the unit and a full eight to 10 hours to install. (Our MODEL 3 Water Heater retails for $899.) Comparatively, electric storage water tanks average $750 and will take a professional two to three hours to install it.
It is also important to keep in mind that due to the metal heating elements inside, both storage water heaters and tankless models should be serviced and cleaned annually, and that annual maintenance will cost about the same for both of them. However, one exception does exist — Heatworks water heaters use graphite electrodes in place of traditional metal heating elements so no annual maintenance is required. Read more about the technology here.
Let's now take a look at how energy efficiency plays into the equation.
How much do Americans spend a year on heating water?
The average American household spends about $280 a year on water heating. It's about 18% of your utility bill after heating and cooling and the second largest energy expense in your home. Of course, this cost fluctuates depending on where you live, the size of your house or apartment, and the extent to which you make smart decisions about conserving energy.
With some much energy going towards heating water, it is important to find the most energy-efficient water heater available on the market.
How do the different types of water heaters compare in energy efficiency?
Beginning, June 12, 2017, EF ratings was replaced with the new industry standard for measuring energy efficiency in water heaters called, Uniform Energy Factor (UEF). The new UEF rating method improves the industry's ability to:
- Define consistent standards for measuring energy efficiency performance
- Simplify the water heater selection process
- More accurately reflect real-world scenarios that impact energy efficiency ratings
- Enable apples-to-apples water heater comparisons across brands
The higher the UEF value is, the more efficient the water heater. Product labels are now required to show estimated yearly energy cost and annual energy use, as well as as First-Hour Delivery (FHD), the amount of hot water a tank-type water heater can provide in the first hour of operation, or the maximum gallons per minute (GPM) that a tankless water heater can handle.
Our MODEL 3 Electric Tankless Water Heater has a UEF of .95. That's one of the highest in the industry!
Did you know? The first national appliance efficiency standards for water heaters took effect in 1990. Updated standards, effective in 2015, required that, in storage water heaters, at least 95% of the fuel energy reaches the point of use. (In a conventional gas storage water heater, less than 50-60% of the fuel energy reached the point of use.)
So, will a tankless electric hot water heater save you money?
If you purchase a Heatworks water heater, the answer is a resounding yes. Sure, the initial cost to install one may be slightly more. The exact cost will depend on unit placement, location of your home, fuel types available and if it is a new home or a replacement for an older home. However, with our family of water heaters requiring zero annual maintenance costs and offering almost complete elimination of standby losses when used in place of storage tank hot water system, one will pay for itself in a few years and will save you even more money in its lifespan.