How Much Propane Does a Tankless Water Heater Use: A Complete Guide

If you do a search trying to find out how much propane your tankless water heater uses you will be met by a ton of fluff, not many people actually giving you an answer. In short, the average household running a tankless water heater, using propane as the fuel source, will burn around 200 gallons of propane for water heating per year.

If you want to know how this figure was determined then read on ahead, I will go into it in detail so you can adjust the number to reflect your situation a little more closely.

Besides figuring out how much propane you will use I also discuss the potential cost savings compared to a storage tank system and an electric water heater, so you can decide if the tankless option is something you should consider.

Does it save money to switch from electric to gas hot water heaters?

In most cases, simply switching from an electric to a gas hot water heater is an easy way to save money on your utility bill. Because a gas water heater is more efficient than an electric tankless water heater. Plus, when they are not in use they use little to no electricity.

How much gas does a tankless water heater use?

A tankless water heater uses 1/3rd the amount of propane that a traditional water heater does.

This is because they only heat water when needed so they are not wasting energy keeping a large volume of water hot in a storage tank. Also modern instantaneous type water heaters have highly efficient heat exchangers, so they waste very little heat energy compared to older style units.

This results in a lower annual unit cost of fuel making them a great choice for anyone looking to save on their energy bills.

New regulations mean that water heaters should come with an energy label and tell you how much propane and water they use, but if you are buying your unit online they may not come with the U.S. compliance stickers.


If you don't have the information on your unit or you are a numbers geek like me and want to work out for yourself just how much gas you use, it is actually quite easy to do so using a few simple formulas.

To determine how much propane your tankless heater will use you first need to know what the Energy Efficiency Rating of your heater is. Usually referred to on your unit's datasheet as either EF or EUF. For the following example, we will use the propane-powered Rheem RTG-95DVLP with an EF rating of .82 which is about the average for a modern instant gas heater.

Once you know your hot water units EF/EUF Rating it is as simple as doing a little maths. It is worth noting that this calculation is based on the average 3 person household use, so if you are single it will probably be lower, likewise, if you are a large family, or have kids like mine that spend hours in the shower it will be higher.

Based on the US Department of Energy assumptions the average 3 person household uses a bit less than 1/2 a therm a day on water heating, 0.4105 therm/day to be exact.

Never heard of a Therm before? That is because it is not used very often. You will probably have seen BTU noted on your heater somewhere though. Water heaters use BTU as their unit of measurement, 1 BTU is the measurement of energy used to raise 1 pound of water, 1 degree Fahrenheit.  (8.33 pounds of water = 1 gallon)

1 therm = 100,000 Btu meaning the average household uses 41,045 Btu/day for water heating. And there are 91,502 BTU per Gallon of Propane.

Confused yet? Don’t be... it all will make sense when we start putting the information together. Okay, let's put all that crazy information into a fairly simple math equation that way we can figure out how much propane you will use per year, assuming that you have a tankless system similar to the  Rheem RTG-95DVLP.

Formula for Calculating Annual Tankless Water Heater Propane Use

The formula we are going to use to work out the yearly propane consumption is:

(Days in the year) X (Av BTU use) ÷ (Energy Efficiency Rating) ÷ (BTU per Gallon) = Average Annual Propane Use (in Gallons)

365 X 41045 ÷ 0.82 ÷ 91,502 = 199.7 Gallons of propane per Year

Currently, the average price per gallon of propane in the US is $2.295, making the cost to run this propane heater around $460 per year *source

How much money could you save switching to a Tankless Water Heater?

Let's assume you had a heater with a much lower energy efficiency rating, would it really make much difference to your annual propane bills? Let's have a look and see two comparisons.

Calculating Gas Storage Heater Propane Cost

If you had an old storage hot water system your EF rating could be as low as 0.35. If we run the calculation again it is clear to see that you would be spending quite a bit more per year on your energy bills.

365 X 41045 ÷ 0.35 ÷ 91,502 = 467.8 Gallons of propane per Year. Costing you $1,073 per year.

Calculating Electric Tankless Heater Cost

To work out how much your electric water heater costs we use a similar formula, however instead of BTU we use kilowatt-hour (kWh) and the average daily household kilowatt-hour usage for water heating is 12.03.

In this example, we will use the Rheem Performance Standard 36 Gallon Electric Water Heater with a UEF of .92 and the average American electricity cost of 10.42 cents per kilowatt-hour.

365 x 12.03 ÷ 0.92 x 10.42 = $497 per year

How location can affect your propane use

The above examples are based on the average use for a 3 person household in the United States. So if you are an average home, in an average climate, with average water input temperatures then these numbers will be pretty close to your needs.

Unfortunately, water heaters are greatly affected by the water temperature they are receiving, simply because the larger the temperature gap, the more energy will be used to heat the water to your chosen temperature. Thankfully Rinnai has a very useful map showing water temperatures throughout the country, and it even includes a rough guide to how it will affect the hot water output.

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