Electric resistance heating is never very efficient when you draw the box properly. Sure you can have a well insulated tank with what appears to be very high efficiency, but generation of electricity is much less thermodynamically efficient than simply burning the fuel to create low level heat in the first place.
The above is why electric resistance water heating costs so much more than natural gas in most places. If you have nuke, wind, or hydro your electric cost will be much lower but for coal and natural gas the thermal efficiency is poor.
By putting in the electric water heater the operating cost advantages of the tankless have just been lost.





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