Tankless Water Heater Savings Calculator

Calculator Inputs

How to Use This Calculator

1. Enter your daily hot water usage and temperature settings.
2. Select the fuel type and input your local energy price.
3. Set efficiency and loss percentages for both options.
4. Add installation, rebates, and maintenance assumptions.
5. Press Calculate Savings to view results.

Formula Used

The calculator estimates the delivered heat needed to warm water, then adjusts for heater efficiency and losses to estimate the input energy you pay for.

• Heat required (BTU/day): Gallons × 8.34 × ΔT
• Annual delivered heat: BTU/day × Days/year
• Input energy (storage): (Delivered ÷ UEF) × (1 + standby% )
• Input energy (tankless): (Delivered ÷ UEF) × (1 + idle% )
• Annual cost: Energy units × Unit price + Maintenance
• NPV: -Upfront + Σ(Yearly savings ÷ (1 + discount)^year)

Standby losses reshape baseline spending

A storage tank typically loses 10–20% of delivered heat annually. If standby loss is 12% and UEF is 0.62, the paid input energy rises about 1.12/0.62 ≈ 1.81 times delivered heat. Tankless units still have small idle losses, often 1–3%, so the paid multiplier can drop near 1.02/0.92 ≈ 1.11.

Usage and temperature lift dominate energy demand

Heating demand scales with gallons and temperature rise (ΔT). At 50 gallons/day and ΔT of 65°F, daily heat is about 50×8.34×65 ≈ 27,105 BTU. Over 365 days, delivered heat is roughly 9.9 million BTU. Converting that to kWh gives about 2,900 kWh delivered before efficiency and losses. Cutting use by 10 gallons/day reduces delivered heat about 20%.

Fuel prices convert performance into real dollars

When electricity is $0.18/kWh, 1,000 kWh shifts the bill by $180. For gas, a $1.60/therm rate means each 10 therm change equals $16. This is why small efficiency improvements can matter more in high-price regions or for larger households with frequent showers and laundry loads.

Upfront cost, rebates, and service life define payback

Net upfront cost includes equipment, installation, permits, and disposal, minus incentives. A $3,000 net cost with $250 annual savings implies about 12 years simple payback. Extending service life from 12 to 18 years increases the window for savings, but maintenance assumptions can narrow that advantage if annual descaling costs are high.

Discounted savings clarifies long-run value and risk

The projection escalates energy and maintenance, then discounts future savings. With 3% energy escalation and a 6% discount rate, later-year savings count less in today’s dollars. The NPV metric helps compare upgrades consistently, and the cumulative discounted line shows the first year when discounted savings exceed the upfront investment. Emissions are estimated by multiplying annual energy units by your factor. For example, 0.40 kg per kWh turns a 500 kWh reduction into 200 kg CO2e avoided each year. Cleaner grids reduce carbon savings, yet bill savings persist; adjust emissions factors for accurate reporting.

FAQs

What does UEF mean in this calculator?

UEF is an efficiency rating that links delivered hot water to energy input. Higher UEF means less energy for the same hot water output, which lowers annual utility cost and improves payback assumptions.

How can I estimate gallons per day?

Use household size and habits. A quick method is 15–20 gallons per person per day for showers and sinks, then add laundry and dishwasher use. Adjust until the storage annual cost roughly matches your past bills.

Why might the calculator show negative savings?

Savings can turn negative if your tankless efficiency is set low, idle losses are high, maintenance is expensive, or your current heater assumptions are already efficient. Recheck UEF values, losses, and your local energy price.

Does this include installation upgrades like venting or gas line changes?

Yes, add those items inside the installation, permits, and misc fields. If your job needs a larger gas meter or electrical panel work, include that cost so the payback and NPV reflect the full project.

What discount rate should I choose?

Use a rate that reflects your alternative returns or borrowing cost. Many homeowners use 3–8%. A higher rate reduces the present value of future savings and can push the discounted break-even later.

How is the emissions result calculated?

Annual emissions are energy units multiplied by your emissions factor (kg per unit). Update the factor for your electricity mix or fuel type. The calculator then reports annual and lifetime avoided emissions when tankless uses less energy.