The savings can be significant for a household that uses a lot of hot water and plans to stay in the same house for a length of time. On average, households change homes about every 5 years. If you are moving less than that, then installing instant hot water system may not save you much money. But that’s not the whole picture.
Saving money as the price of energy goes up is a concern for everyone. Greenhouse warming is here to stay and adjusting for not just today but the future is financially wise. The annual cost of operating a tank type water heater is on average about $500 for a household. By switching to an instant hot water heater using electricity will save about 40-45% or $200 to $$225 per year.
In the case of a tankless gas water heater, the savings is even more significant for the simple reason that gas is that much less expensive to operate.
But here is the catch. If you already have a tankless system installed then there is little you can do to save money. However, if you are contemplating an installation, then it will cost you considerably more to purchase and install a tankless system. The gas system is more expensive to install by about 20%; but the annual savings is even more. One of the reasons that it is more expensive than an electric tankless water heater is that the venting system is made from stainless steel.
The electric unit however requires no such venting unit, since there is nothing to vent. But the cost to operate an electric system is about 20 to 30% more than gas.
These tankless water heaters are about 3 to 4 times the cost of a conventional tank-type. If a standard heater runs about $300 to $400, then a tankless unit will run between $900 and $1600. The difference of between $600 and $1200 will be made up over the next three to six years, and even less time if energy prices continue to escalate.
It is important to understand that cost and savings are only one of the many considerations necessary before deciding to change to an instant hot water heater. Knowing all you can about how they work is a simple process, but also a very important one.