On 30-Mar-2004, (m Ransley) wrote:

One major thing not discussed is the energy it takes to heat 40 - 50
gallons , the BTU to heat that water is where waste is , Tankless
heat what they use Immediately. No waste.

That is true only for the first hour that a normal (tank) water heater is on.
After that time, the water has reached the set temperature and the energy
consumption (other than by drawing hot water) is just from the heat loss
through the tank. There is a difference between storing energy and consuming
energy.

When you take a hot shower, a fixed number of BTU's are required to heat the
cold water flowing into either a tankless or tank water heater. The heat is
exactly the same unless one has a higher efficiency heating core (unlikely if
they are both electric). So the only difference in energy consumption is due
to the heat loss from the tank while the standard water heater is storing hot
water. What my analysis shows is that this heat loss comes to about $4/month.
That is the upper limit on how much energy (money) can be saved by a tankless
water heater. The actual savings will be less than that because "tankless"
heaters actually have a small tank where the water comes in contact with the
heating element, and the heat from the water in that (small) tank and the metal
around it is lost between the times when you draw water.

My guess is that a tankless water heater saves about $2/month in energy costs.
If a tankless unit costs an extra $480 (pretty typical), then the payback time
is 20 years (assuming it lasts that long).