What Is a Water Heater Energy Cost Calculator?
A Water Heater Energy Cost Calculator is a tool designed to compare the estimated annual energy costs of a standard electric tank water heater versus a more efficient electric tankless model. By entering your household's water usage and local energy rate, you can make an informed decision based on both the upfront purchase price and the long-term operational savings. This free calculator provides clarity on the financial impact of your choice.
Last updated: November 8, 2025
How to Use This Calculator
Our free cost comparison tool provides an instant estimate. Follow these simple steps:
- Enter Daily Hot Water Usage: Estimate the gallons of hot water your household uses per day. An average person uses 15-20 gallons.
- Input Your Energy Rate: Find your cost per kilowatt-hour ($/kWh) on your electric bill.
- Set Water Temperatures: Enter your region's groundwater temperature and your water heater's set temperature.
- Add Unit Costs (Optional): Enter the purchase prices of both unit types to calculate a payback period.
- Click "Calculate Costs": Instantly compare the annual operating costs of both systems.
Understanding Your Cost Comparison
This calculator highlights the long-term financial differences between tank and tankless electric water heaters.
- Annual Cost (Tank vs. Tankless): A direct comparison of the estimated electricity cost to run each type of heater for one year.
- Annual Savings: The difference between the two annual costs, showing how much you could save each year by choosing the tankless option.
- Payback Period: If you enter the purchase prices, this shows how long it will take for your energy savings to offset the higher upfront cost of the tankless unit.
According to the Department of Energy, water heating is the second largest energy expense in most homes, accounting for approximately 18% of your utility bill.
Example Cost Comparison
This example shows a typical comparison for a family of four.
| Input | Example Value |
|---|---|
| Daily Hot Water Usage | 60 Gallons |
| Energy Rate | $0.17/kWh |
| Temperature Rise | 70°F (50°F to 120°F) |
| Tank Annual Cost | ~$604 |
| Tankless Annual Cost | ~$556 |