How Much Money Will A Tankless Save?

    There are a number of factors that go into how much a tankless will save you here are the main points to consider.

    Can a tankless save me money? this is one of those questions I get asked a lot but is difficult to answer because every home is different.  I’m going to try and layout the proof and arguments as to how and why a tankless can save you money. Ultimately I’m leaving it up to you to apply these results to your home and family as you know your habits much better than I ever will.

    Tankless Lifespan

    This is an important one and I have mentioned it many times on this site. A conventional water heater is designed to be a throw away system that will last roughly 10 years. Sure some last 15 maybe even 17 or 18 years but they are severely inefficient. Will a tankless save you money?Calcium and lime scale build up on the heating surfaces reducing heat transfer by 2% per year. After 10 years your system is 20% less efficient than its already low efficiency rating. Now compare this to a tankless which has a designed 20 year lifespan but could last upwards of 30 years. Yes they do get calcium and lime buildup which reduces efficiency but, your tankless is designed to be flushed out with vinegar. This simple flushing technique restores efficiency back to the original efficiency rating from the manufacturer.

    Fuel Savings From A Tankless

    Again it will really be determined by the homeowner and your family. A tankless offers unlimited hot water so if you have someone that like really long showers than you may end up spending more on fuel. To try and quantify some numbers I like to reference the CMHC tankless study from 2011 done here in Canada. They compared natural gas consumption for roughly 40 homes with a conventional tank and then a tankless. The result was roughly a 44% reduction in gas consumption when heating your water.


     Original Water HeaterTankless SystemAnalysis
     Monitored Period (#days)Average Gas Use  (m3/day)Monitored Period (#days)Average Gas Use  (m3/day)% Change In Gas


    Payback Peroid On A Tankless

    It’s hard to determine any specific timeframe due to the numerous variable but i think its safe to say a tankless will pay for itself over time. Thus we should get into the costs of tankless systems here in Toronto and the GTA. Typically a condensing tankless starts at around $34.95 a month to rent and around $2699 for purchase and installation. Where does that line up to a conventional tank? Well we start our power vented systems at around the $1600 mark fully installed. Thus you’re going to need to save $1100 from a tankless somewhere.

    • Lifespan – you will probably end up purchasing two conventional tanks to match the lifespan of a tankless
    • Fuel – 95 percent of 1 dollar worth of natural gas actually heats water with a tankless, you would be lucky to be getting 50 percent of that dollar with a conventional natural gas hot water tank.


    To conclude, a tankless has the potential to more than make up the extra cost of the unit. You as the homeowner would probably have the best estimate on how long the payback period will be knowing your water heater usage trends.  It is quite likely I have opened up even more questions on how a tankless saves but I love to answer people’s inquiries. Feel free to give me a call anytime and I will be happy to help you out (my name is John by the way). 


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      Author: John

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