Some experts contend that switching to a tankless water heater can cut your water heating costs by 40%. But this upgrade option isn’t always the best choice. Here’s why: First of all, a tankless or “demand” water heater can cost twice as much as a new tank-type WH. Secondly, tankless savings are directly related to the amount of time you’re NOT using hot water. A household consisting of two people who spend a great deal of time out of the house would enjoy maximum savings. A household with stay-at-home family members who use hot water throughout the day (showers, laundry, washing dishes, etc.) would be better off buying a new ENERGY STAR® tank-type water heater.