from Matt in Watertown, WI :
#191
Taking into consideration both up-front investment (purchase and installation costs) and energy use costs, is there really a big difference long-term in cost between a standarad electric water heater and a newer technology "tankless" one? If so, with which are you more likely to save?
This depends on the energy used to heat the tankless water heater.
When comparing a standard efficiency electric storage water heater and an electric tankless water heater there is not a significant difference in savings, probably less than $40 per year. However, when comparing a standard efficiency electric water heater to a gas tankless water heater the savings are more substantial, almost $200 per year.
It is important to consider the purchase price as well. If the electric tankless unit is $1,000, the simple payback (the amount of time it will take to recover installation costs based on annual energy cost savings) would be over 25 years. If the tankless unit cost is $3,000 the simple payback is a little more than 15 years. In addition, there are Focus on Energy Cash Back Rewards and Federal Tax Credits that can reduce that payback even further.