How Americans are Saving 37% on Water Heating Costs, According to


For most middle-class families, saving money on monthly expenses is one of the most important aspects to managing the household. With the cost of everything on the rise, small ways to save money can make a big different to your standard of living. In addition to cost, we are becoming more conscious of our energy consumption and carbon footprint; conserving energy is becoming an important way to curb global warming.

According to the Economist, coal power still accounts for 30% of all energy production in the United States, so that electricity in your home is most likely powered by coal which is a huge contributor to greenhouse emissions.

One way to both conserve energy and save money is by making the switch from a traditional hot water tank to a tankless water heater. Traditional hot water tanks are comparatively inefficient — they keep a large, fixed amount of water hot at all times. As water sits in the tank unused, energy is constantly being spent to keep that water at a fixed, high temperature. Tankless water heaters, on the other hand, only heat water on-demand, resulting in significant energy savings. In addition, most households are renting hot water tanks from their utility company, resulting in not only increased energy costs but increased rental costs.

According to, switching to a tankless water heater from a hot water tank will directly result in an average of 37% savings on energy costs. Depending on how inefficient your water tank is, the savings can be upwards of 50%. Since most of us are heating water in tanks using either electricity or natural gas, the emissions we reduce is significant by making the switch. The drawback of course is a tankless water heater can be expensive both to purchase and to install and will take some time before you recoup your investment with monthly savings.


How to pick the right tankless water heater

Tankless water heaters come in a variety of shapes, sizes, power sources, ventilation requirements and flow rates. One of the most important considerations before buying is the temperature of the incoming water, especially in northern parts of the united states with cold winters. Most tankless water heaters are rated by their ability to raise the temperature of water and maintain a consistent flow rate, measured in gallons per minute (GPM). Generally speaking, the lower the incoming water temperature, the lower the flow rate of your tankless water heater.

If you live in an area with cold winters, you’ll want to opt for a large, natural gas powered tankless water heater that is capable of outputting over 7.5 GPM of hot water. At this time, electric tankless water heaters aren’t capable of raising water temperature over 50F at a flow rate of 3.0 GPM which is the minimum you’d need to run a shower, for example.

For southern states, electric tankless water heaters are usually the best bet, although you’ll need to install several of them to power an entire house. Since you’ll rarely need to raise the temperature more than 30F, electric tankless water heaters have more than enough power to provide sufficient hot water to your household. In combination with the abundant amount of sun, you can even power your electric water heaters entirely with solar power, which is even further reducing your carbon footprint.

It can be a complicated choice picking the right tankless water heater, we’d recommend reading these tankless water heater reviews to get a better idea before you buy.

More savings with Tax Credits

In addition to the monthly rental cost and energy cost savings, you can also save money on your annual taxes with tankless water heating. Various states have their own tax credits and you should discuss them with your tax advisor to see if you’re eligible. keeps a list of state tax credits that are available depending on the type of energy saving investments you are making in your home.

Some of these tax credits are one-time credits to aid with the up-front investment in the water heater; others are recurring tax credits for your on-going saving of energy.

Tankless water heating is the wave of the future when it comes to energy efficiency in the home. Over the last decade, the technology has improved significantly and capable of handling nearly any demand that a regular household can produce.

Making the switch from a hot water tank to a tankless water heater will not only save you money, it also saves our environment. Contact your local plumbing professional to discuss whether or not tankless water heating is the right choice for you.