Water Heating · West
Cost to run a tankless water heater in Alaska
At Alaska’s average residential rate of 28.23¢ per kWh, a tankless water heater drawing 18000W for 0.5 hours a day costs about $61.87 a month. Change the numbers below to match how you actually use yours.
Quick answer
Based on 18000W at a 80% duty cycle (this equipment cycles on and off rather than drawing full power continuously) and 28.23¢/kWh, the Alaska average for May 2026.
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— per year
Why the cost differs in Alaska
Alaska has the 45th cheapest residential electricity of the 51 US states and territories we track, at 28.23¢ per kWh against a national average of 18.44¢. That is +53.1% compared with the national figure. Alaska is not one grid but many. The Railbelt system serves Anchorage and Fairbanks, while remote communities run isolated diesel microgrids where fuel arrives by barge or plane. That logistics cost, not generation efficiency, is what puts Alaska well above mainland rates. Heating demand runs most of the year, and lighting load is unusually seasonal given the extreme daylight swing.
For this appliance specifically, the difference works out to an extra $257 a year over what the same tankless water heater would cost at the national average rate. Run the identical appliance in Hawaii and it would cost $1,367 a year; in Idaho it would cost $325. That spread of $1,042 is entirely down to location.
At Alaska's rate this single tankless water heater accounts for roughly 25% of a typical household's entire annual electricity bill. It is not a rounding error on your statement - it is one of the largest single line items in it.
Because Alaska is among the most expensive states for electricity, efficiency upgrades pay back faster here than almost anywhere. A more efficient tankless water heater that saves a given number of kilowatt-hours saves noticeably more money in Alaska than the same upgrade would in a cheap-power state.
Retail service in Alaska is regulated, so most households pay a tariff set through state rate cases rather than a shopped rate. The state average is a reasonable proxy, though your utility's specific tariff still varies.
| Location | Rate | Per month | Per year |
|---|---|---|---|
| Alaska this page | 28.23¢ | $61.87 | $742 |
| US average | 18.44¢ | $40.41 | $485 |
| Idaho cheapest state | 12.35¢ | $27.07 | $325 |
| Hawaii most expensive | 52.00¢ | $114 | $1,367 |
Alaska electricity rate trend
Rates in Alaska have moved from 26.87¢ to 28.23¢ per kWh over the last twelve months of published data. Nationally, residential rates rose about 6.2% year over year.
2025-06 to 2026-05 · cents per kWh
About running a tankless water heater
Enormous instantaneous draw but zero standby loss. Whether it saves money depends heavily on household usage patterns and incoming water temperature - cold-climate installations need far more power for the same output temperature.
What actually changes the cost
- At typical use this is a major load - around 2,628 kWh a year. Efficiency upgrades here pay back faster than on any small appliance.
- Models vary widely, from about 10000W to 28000W. Check the nameplate on your own unit rather than assuming an average, because the spread is more than 2x.
- If your utility offers time-of-use pricing, shifting this load off-peak can cut its cost substantially without using any less energy.
How we worked this out
The arithmetic is simple and we would rather show it than hide it. Divide watts by 1,000 to get kilowatts, multiply by hours of use and by the duty cycle to get kilowatt-hours, then multiply by your rate:
18000W ÷ 1000 × 0.5h × 80% = 7.200 kWh/day × 28.23¢ = $2.033 per day
One honest caveat: Alaska’s figure is a state average published by the EIA. Your own utility’s tariff, any time-of-use pricing, fixed monthly service charges and local taxes all shift the real number. Put your actual per-kWh rate into the calculator above for a figure that reflects your bill.
Questions about tankless water heater running costs
How many watts does a tankless water heater use?
A typical tankless water heater draws about 18000 watts while running, with most models falling between 10000W and 28000W. Check the nameplate label or manual for your specific unit - the range is wide enough that averages can mislead.
How much electricity does a tankless water heater use per day?
At around 0.5 hours of use a day and a 80% duty cycle, that works out to roughly 7.2 kWh per day, or about 216 kWh a month. Your actual figure depends on your usage and model.
Why does the cost differ so much between states?
Residential electricity rates across the US range from about 12.35 cents per kWh in North Dakota to 46.62 cents in Hawaii - nearly a fourfold difference. The same tankless water heater, used identically, therefore costs almost four times as much to run in the most expensive state as in the cheapest.
Is it cheaper to run a tankless water heater at night?
Only if you are on a time-of-use or variable tariff. On a flat rate, the time of day makes no difference to cost. If you are on time-of-use pricing, off-peak hours are typically materially cheaper, and shifting this load can reduce its cost without reducing usage.