The reason is demand charge.
Tankless electric water heater vs electric tank.
All else being equal the tankless unit will use less kwh electricity than the unit with the tank because the tankless does not spend energy keeping hot water on standby.
This is because it tends to be quite complicated to switch from electric to gas.
Most notably a 40 gallon propane storage tank water heater can deliver the same amount of hot water as a 50 gallon electric model.
Propane storage tanks efficiency and smaller size can free up valuable space.
Gas and electric tankless water heaters run more efficiently than the conventional water heaters of the same fuel type.
Plus the larger electric tank will experience greater standby losses due to its greater surface area.
We rated the annual energy consumption cost excellent for a gas.
This energy star certified titan of a tank delivers up to 72 gallons of hot water per hour dependent on tank capacity which is a rate much faster than the normal electric water heater.
Longer useful lives than storage tank water heaters.
However depending on your local electric utility s billing policy the tankless may be much more expensive to operate.
The simplicity of the storage tank water heater makes for lower cost repairs when they stop functioning properly.
Either a gas burner or an electric element heats the water.
It uses high powered burners to rapidly heat water as it runs through a heat exchanger and deliver it directly to your faucets or shower without storing it in a tank.
Storage tank water heaters operate more simply than a tankless water heater which means there maintenance and repair costs are less.
Electric tankless water heaters still save homeowners around 44 per year according to the us department of energy.
Tankless water heaters heat water directly without the use of a storage tank.