Tankless Electric Hot water heaters compare water storage heater energy costs

How to buy the right sized electric hot water heater and save money too   .. part 1 Energy Factor

The two really important factors to consider are Energy Factor and First Hour Rating. These two terms are explained elsewhere and you can go there by clicking the relevant links below ..

hot water heaters energy factors

first hour rating for hot water heaters

The cost of the energy source is also critical bearing in mind that electricity generally is most expensive .. click here for gas fired tankless and storage heaters

1. Energy factor ... there are significant differences in terms of energy factors between electric tankless (also called instant or on demand hot water heaters) and electric storage heaters.

The energy factor is important and is used to calculate the amount of energy used in a year as follows where you must use the cost of electricity per kiloWatt hour. I have assumed $0.06 per kiloWatt hour

From the table below you can estimate your annual cost taking into account your approximate water consumption per day for every day of the year and you can see in the red section the impact that Energy factor has on the total cost per year. For example take the purple line .... and compare to the bottom red line and you will see that if you use 65 gallons per day of hot water (77 degrees above cold water inlet) using an efficient 0.99 Energy factor unit that you will save (315.00 - 270.45  = $44.55) per year. Over a period of 10 years this will come to $445 saved. Remember that a gas fired tankless heater could have cost only $107 per year for a similar duty.

Clearly there are significant saving in converting from electricity to gas hot water heaters .... despite the higher efficiency of the electric hot water heaters.
Water per day in gallons 50 55 60 65 70
kWhr per year 3433 3776 4119 4462 4806
Cost per kWhr 0.06 0.06 0.06 0.06 0.06
Annual cost 100% Energy factor electricity  $  205.96  $  226.56  $  247.15  $  267.75  $  288.34
Energy factors impact          
0.85  $  242.31  $  266.54  $  290.77  $  315.00  $  339.23
0.9  $  228.84  $  251.73  $  274.61  $  297.50  $  320.38
0.99  $  208.04  $  228.84  $  249.65  $  270.45  $  291.26

Do take note that any percentage saving in Energy Factor has a lower percentage saving effect upon the bill you will pay .... this leads to what can be considered misleading advertising.

To give you an example for any hot water heater (tankless or storage) an Energy factor of 0.85 is 30.7% better than an Energy Factor unit of 0.65 but the cost saving is not 30.7%. In actual fact the cost saving is only 23.5%

This table below shows Energy factor difference between best and worst units for different types of tankless and storage tank hot water heaters. This table clearly shows that tankless hot water heaters are certainly more efficient than storage hot water heaters ... but do not forget that this is only one factor that will determine your final choice
Type Energy Factor Parameter Energy Factor
Storage Electric MAX value 0.95
Storage Electric MIN value 0.77
Storage Electric AVG value 0.89
Tankless Hot Water Heaters Electric MAX value 0.99
Tankless Hot Water Heaters Electric MIN value 0.99
Tankless Hot Water Heaters Electric AVG all values 0.90

Energy Factor ... every hot water heater tankless or storage tank heater must be provided with a certified Energy Factor. This factor in simple terms means that if the Energy Factor is high then the annual cost of power to run the tanklless hot water heater or the storage heater will be lower than it would be for a low rated Energy Factor.

First Hour Rating ... this number refers to the amount of hot water the heater can supply per hour ... if a storage tank system is in use the assumption is that the tank is full of hot water at the start of the first hou

Part 2 how to buy an electric hot water heater