"When you are thinking about having a water heater installed in your home, you obviously need to choose what model heater that you want first. Whether you are considering a traditional storage water heater, an on-demand, or tankless, water heater, or a heat pump, the U.S. Department of Energy has provided a formula you can use to estimate the annual operating cost of the heater you are considering. Then, using the formula, you can compare the typical costs to operate a water heater with other models that are more energy efficient and less energy efficient." (Quoted from article)