If you’re thinking about switching to a tankless water heater, you’re probably wondering what it might do to your electric bill. The simple answer is that most tankless systems do not use a lot of electricity. However, this can depend on whether the unit is gas or electric. Gas tankless models use a small amount of electricity to run controls and fans, while electric tankless models use more electricity to heat water with powerful electric elements.
Why Tankless Water Heaters Need Electricity
Even though tankless water heaters heat water “on demand,” they still rely on electronics to operate safely. Inside the unit, sensors and a control board track water flow and temperature. The system then adjusts the output to maintain a steady stream of hot water and prevent overheating. That means your tankless water heater uses electricity even if it runs on gas. The difference is how much electricity it uses and what that electricity powers.
Gas Tankless Water Heaters: Low Electric Use
Gas tankless water heaters use natural gas or propane to create heat. Electricity plays a supporting role. It powers the ignition system, the control board, and, in many models, a small fan for venting. In most homes, a gas tankless water heater will not noticeably increase your electric bill. It uses electricity the way a small appliance does: mainly when you’re using hot water.
One important detail is that gas tankless water heaters usually shut down during a power outage. Even though the fuel is gas, the unit still needs electricity to operate safely. If that concerns you, ask about backup options, like battery support or a generator connection.
Electric Tankless Water Heaters: Higher Electric Use
Electric tankless water heaters heat water using electric elements. These units can use a lot of electricity while running because heating cold water requires significant power. Many electric tankless systems require multiple breakers and a strong electrical capacity.
That doesn’t mean electric tankless is always a bad choice. It can work well for smaller homes or homes with low to moderate hot water use. It can also work well as a point-of-use system, such as one installed for a single bathroom, a kitchen sink, or an addition. The main point is that electric tankless systems draw high power during use. If several people shower at the same time, the unit works harder and pulls more electricity.
What Affects the Amount of Electricity a Tankless Water Heater Uses
No matter which type you have, a few factors control how hard the system has to work. Incoming water temperature matters. In winter, the water is colder when entering your home, so the unit needs more energy to heat it. If you live in a cold region, you may notice the system runs longer during the winter months.
Your household hot water habits also matter. If you take long showers, run laundry frequently, and use a dishwasher daily, your tankless unit will run more. That increases energy use, whether the unit heats with gas or electricity. System size is another factor. A properly sized unit efficiently keeps up with demand. An undersized unit may struggle during peak usage and produce temperature swings.
Maintenance affects efficiency, too. Scale buildup inside the heat exchanger can reduce performance. Hard water areas often require regular descaling to keep the system operating properly and avoid unnecessary strain.
Will a Tankless Water Heater Raise Your Electric Bill?
For most homes with gas tankless systems, the electric bill typically stays about the same. The unit uses electricity, but not enough to make a major difference. For electric tankless systems, your electric bill may increase depending on usage and the temperature of the incoming water. The total cost can still make sense when compared to a traditional electric tank water heater, which uses electricity throughout the day to store water hot. Tankless systems shift energy use to the moment you need hot water instead of using energy all day long.
What About Installation Electrical Requirements?
A tankless water heater may not use much electricity during normal operation, but it may still require electrical work to install safely. Gas tankless models often plug into a standard outlet, though some installations require a dedicated circuit, depending on local codes. Electric tankless models often require multiple dedicated circuits and enough electrical panel capacity. If your home has an older electrical panel, you may need an upgrade before installation. That’s why a professional evaluation matters. Our team can confirm what your home can support and recommend the best option.
Do Tankless Water Heaters Save Money Overall?
Tankless water heaters can save money, but it depends on the system type and your home’s usage. You may like tankless systems because they heat water only when needed, and they often last longer than tank models with proper maintenance. However, tankless installation can cost more up front, especially if you need gas line upgrades, new venting, or electrical improvements. For many households, the long-term value comes from efficiency, longer equipment life, and fewer worries about tank leaks.
Electric vs Gas Tankless: Which One Makes More Sense?
Gas tankless usually makes the most sense if your home already has natural gas service and you need strong hot water performance for multiple bathrooms. It provides high output without putting a heavy load on your electrical system. Electric tankless can make sense for smaller homes with low hot water demand or targeted point-of-use installations. It can also work well if your home doesn’t have gas service and your electrical system can handle the load.
One more factor to consider is your daily “peak demand” window. If your household stacks hot water use into the same hour (morning showers, laundry, and dishes), electric tankless systems may struggle unless they are aggressively sized. Gas tankless models usually handle higher demand better, especially in homes with multiple bathrooms.
It also helps to think about long-term reliability. Both types can last many years, but performance depends heavily on water quality and maintenance. If your home has hard water, you may benefit from a water softener or regular descaling to maintain high efficiency and reduce wear on the heat exchanger. Skipping maintenance can lead to reduced output, error codes, and more frequent service calls.
Finally, consider recovery expectations. A tankless system heats continuously as water flows, but it still has a maximum capacity. If you expect to run two showers and a dishwasher at the same time, choosing the right size matters as much as choosing gas versus electric.
The Simple Answer
Tankless water heaters don’t use much electricity by comparison. Gas tankless units use a small amount of power for controls and venting, while electric tankless units use much more electricity because they generate heat. At Blue Best Plumbing, Heating, Air, & Generators, we have more than 20 years of experience providing water heaters and other plumbing services to the Bountiful area. We know how important it is to you to have optimal hot water, so we offer trusted service you can rely on. We also offer financing options. Contact us today to schedule installation.
