Will a Tankless Water Heater Save You Money in Seattle?

A question people often ask us is: in the Seattle area, is it worth it to buy a “tankless” hot water heater (also known as a “hot water on demand”), or an instantaneous hot water heater?

It’s a great question to ask, and the answer differs depending on what area of the country you live in. If you live in any of the northern states which have colder ground water temperatures, including Washington State, you are on average, going to spend more money on heating the hot water in your house compared to people who live in southern states.

The reason for this is that before going into the tank or the tankless, ground water is colder, and therefore the water heater has to work harder to raise the temperature in your tank or tankless. A conventional gas hot water tank has an approximate AFUE rating of around 55%. What this means is that for every $100 of fuel that you spend, on average, you will lose about 45 cents going up your chimney. Not a great value.

Tankless water heaters, which are the most high-efficient, can get up to 97% efficiency, or AFUE, meaning that for every $100 that you spend on fuel, you’re only going to lose about 3 cents up your chimney. The other 3% of potential efficiency is almost impossible to capture. If it were, there would be zero heat left to carry the flue gases away in the steam as it leaves the appliance.

At the time of writing this blog post, the average family of four in the Seattle area will pay up to about $500 in fuel per year to heat their gas hot water tank. Comparatively, a tankless water heater will use approximately $225 of fuel. Over the course of one year, it doesn’t add up to much, but if you spread that over the average 10-15 year life of a hot water tank, it can add up to $2000 or $3000.

A secondary difference is that after 10-15 years a conventional tank will break. However, a tankless could last you up to 30 years, paying for itself a couple of times over.

I would say what matters more is the timeframe that you’re going to live in the house. If you’re planning on moving out in the next year, getting a tankless, or a hot water on demand, is probably not going to be good value. If you’re going to be in the house for a longer period of time, then you will save plenty of money by buying a tankless.