Tankless Water Heater Payback Calculator
Size up whether a tankless water heater's efficiency pays off. Enter the price premium versus a tank and the yearly bill savings to see a simple payback in years, the present value of savings over its life, and the lifetime return on investment at your chosen discount rate.
For planning purposes only; real-world performance depends on usage patterns, inlet temperatures, and maintenance.
Examples
- $1,800 premium, $220/year savings, 5% discount rate, 15-year life ⇒ Simple payback: 8.18 years | Present value of savings: $2,283.52 USD | Net present value after premium: $483.52 USD | Lifetime ROI: 26.86% over 15.00 years.
- $2,500 premium, $320/year savings, 6% discount rate, 18-year life ⇒ Simple payback: 7.81 years | Present value of savings: $3,464.83 USD | Net present value after premium: $964.83 USD | Lifetime ROI: 38.59% over 18.00 years.
FAQ
Does this include maintenance or descaling costs?
No. Add recurring maintenance expenses to the cost premium before calculating if you want to include them.
What if I finance the installation?
You can approximate loan impact by increasing the premium to include interest paid over the loan term, then rerun the payback.
How do fuel prices affect the result?
Higher gas or electricity rates increase the annual savings input, shortening payback and boosting net present value.
Additional Information
- Assumes constant yearly savings and no major maintenance costs outside normal ownership.
- Discount rate converts future utility savings into today's dollars; leaving it blank applies 5.00%.
- Service life defaults to 15 years; update if the manufacturer warranty or water quality suggests a different horizon.
- ROI is net present value divided by the premium, expressed as a percentage over the modeled life.