Cost to Run a Tankless Electric Water Heater in California
At California’s April 2026 average residential rate of 35.25¢/kWh, a typical tankless electric water heater costs about $135.19 per month — or $1621 per year.
Uses 12.6 kWh/day · 4599 kWh/year.
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Formula: cost = watts × duty × hours/day × days/year × rate / 100 / 1000
About this appliance
A whole-home tankless electric water heater. High peak draw, but only operates on demand.
This page uses California’s residential average electricity price. California households pay 87% more than the U.S. average of 18.83¢/kWh, so running the same tankless electric water heater in California costs about $1621/year, compared with the U.S. typical of $866/year.
Tankless Electric Water Heater cost across other states
| State | Rate (¢/kWh) | Yearly cost |
|---|---|---|
| North Dakota | 12.35 | |
| Idaho | 12.70 | |
| Nebraska | 13.28 | |
| Utah | 13.29 | |
| Oklahoma | 13.31 | |
| Iowa | 13.86 | |
| Montana | 13.90 | |
| Missouri | 14.01 | |
| Arkansas | 14.16 | |
| Nevada | 14.29 | |
| Washington | 14.36 | |
| California | 35.25 |
How to lower the cost of your tankless electric water heater in California
- Lower the tank temperature to 120°F. Most are factory-set at 140°F. Going to 120°F cuts standby losses 6–10%.
- Add a tank insulation blanket (R-10+). Cuts standby losses by another 25–45% on uninsulated tanks.
- Consider a heat-pump water heater. Uses 60–70% less electricity than a resistive tank — in California that's roughly $973/year saved.
Gear that helps
Tools and upgrades that pay back fastest for this appliance category. Affiliate links — we may earn a small commission at no cost to you.
- Water heater insulation blanket — cuts standby losses 25–45%
- Low-flow showerhead — cuts hot water use 30–50%
- Hot water pipe insulation — saves 2–4% on water heating
FAQ
How accurate is this estimate?
The calculation is exact for the given inputs. Real-world variation comes from your utility’s actual rate (which varies by plan and time-of-day), your specific appliance’s efficiency, and your usage pattern. Use the customize box above to plug in your own numbers.
Where does the 35.25¢/kWh come from?
It is the California residential average from the U.S. Energy Information Administration’s Electric Power Monthly, Table 5.6.A (April 2026). See the methodology page.
How can I lower this cost?
Three high-impact moves: (1) shift heavy usage to off-peak hours if your utility offers time-of-use pricing; (2) switch to a more efficient unit (Energy Star); (3) reduce hours of use. For appliances with always-on standby draw, an inexpensive plug-in Kill-A-Watt meter often pays for itself by revealing surprise loads.