Energy Savings Calculator (Tank vs Tankless)
Compare the annual energy costs and long-term savings between a traditional tank water heater and a tankless (on-demand) water heater.
Average U.S. household uses ~64 gallons/day
$/therm
Natural gas: ~$1.17/therm (U.S. avg 2024)
Typical tank UEF: 0.58–0.70 (gas), 0.90–0.95 (electric)
Typical tankless UEF: 0.82–0.96 (gas), 0.96–1.0 (electric)
Typical range: $500–$1,500
Typical range: $1,000–$3,500
Formula
Annual BTU Required:
Q = Gallons/day × 365 × 8.33 BTU/(gal·°F) × ΔT
Where ΔT = 120°F (target) − 58°F (avg groundwater) = 62°F (DOE standard)
Annual Energy Consumed (in fuel units):
E = Q / (UEF × BTU_per_unit)
Annual Operating Cost:
Cost = E × Price_per_unit
Simple Payback Period:
Payback = (Tankless_installed − Tank_installed) / Annual_savings
Total Cost of Ownership (TCO):
TCO = Installed_cost + (Annual_cost × Years)
BTU conversion factors used:
- Natural Gas: 100,000 BTU/therm
- Electricity: 3,412 BTU/kWh
- Propane: 91,500 BTU/gallon
Assumptions & References
- Temperature rise (ΔT) = 62°F (120°F delivery − 58°F average groundwater), per DOE test procedure (10 CFR Part 430).
- Water density/specific heat approximated as 8.33 BTU per gallon per °F.
- Average U.S. household hot water use: ~64 gallons/day (U.S. DOE, 2023).
- Default natural gas price: $1.17/therm (U.S. EIA, 2024 average).
- Default electricity price: $0.16/kWh (U.S. EIA, 2024 average).
- Default propane price: $2.50/gallon (U.S. EIA, 2024 average).
- UEF (Uniform Energy Factor) replaces the older EF rating per DOE 2017 rule.
- Typical gas tank UEF: 0.58–0.70; gas tankless UEF: 0.82–0.96 (ENERGY STAR).
- Typical electric tank UEF: 0.90–0.95; electric tankless UEF: 0.96–1.0 (ENERGY STAR).
- Installed costs are estimates; actual costs vary by region, labor, and venting requirements.
- Analysis does not include maintenance costs, rebates, or time-value of money (no discount rate).
- References: U.S. DOE Energy Saver, ENERGY STAR, U.S. EIA Monthly Energy Review.