Energy cost based on comparing standard electric 40/50 gallon tank with heater to “Series 3” Electric Tankless Water heater. 

Represents the national average for electric rated (8.4 cents per kWh) and the average daily household hot water usage (64 gallons per day).

Note:  Estimated annual operating costs are based on a 55” temperature rise with a 99% efficiency rating of the heater.  Home construction with average lengths of plumbing and pipe insulation.  These costs do not reflect losses incurred due to non-insulated pipes installed in a concrete slab or crawl space. 

Source:  GAMA Consumers Directory of certified efficiency ratings. 
Based on 2001 costs.

Dept. of Energy Article on Tankless Hot Water Heaters