Heat pump water heater vs electric tankless

The verdict

The heat pump wins outright, and it is not close. An electric tankless unit is still resistance heating: it converts electricity to heat at 100%, which is the ceiling, and going tankless saves the standby loss of a tank and nothing else. A heat pump water heater moves heat out of the room and into the water instead of creating it, so it delivers two to three units of heat per unit of electricity. One is avoiding a small waste; the other is beating the ceiling.

Side by side

Heat pump water heater and tankless water heater (electric) are costed by the same function from the same dataset, so the $263 between them is a difference in the appliances and not in how each was measured. Heat pump water heater draws an average 110 W across the hours it runs; tankless water heater (electric) draws 274 W across its own.

Both at 18.34¢/kWh, the EIA residential average for June 2026. Ten years is roughly the service life of either.

The assumptions behind those figures

Nothing above is a manufacturer’s claim. 550 W at 20% for 24 hours a day, 365 days a year, is where heat pump water heater’s 964 kWh comes from; 18,000 W at 2% for 24 hours over 365 days is where tankless water heater (electric)’s 2,397 kWh comes from. The duty cycle is the input most published comparisons leave out, and it is why the ratings and the running costs are not in the same proportion here.

Change any of these on the appliance’s own page and every figure moves with it. The duty cycle is a property of the machine; the hours are a property of you.

Does the switch pay for itself?

The saving is $263 a year. What that has to pay back is the one number this site does not have — what heat pump water heater costs you, installed, after whatever incentives you qualify for — and quotes for the same job differ by thousands. So put yours in rather than have this page invent one, and the arithmetic runs in front of you.

The gap in your state

The appliances are the same everywhere; the rate is not. The gap between these two is worth $756 a year in Hawaii and $188 in Nevada — 4× apart, on identical appliances.

A year of each, by state. Residential average price, EIA June 2026.

Questions

Other head-to-heads

• Heat pump water heater vs a standard electric tank

  $322 a year apart

  How much does a hybrid water heater actually save?

Source: U.S. Energy Information Administration, Electric Power Monthly, Table 5.6.A, June 2026. U.S. Government work, public domain.

How every figure on this page is computed · Where the data comes from