Operating costs of different sized water heaters
There is minimal cost difference between different sized water heaters. The only difference in energy costs relates to the difference in stand-by heat losses.
Stand-by losses are caused when the water heater inside temperature is higher than the outside temperature. A 60 gallon water heater has an average loss of 116 watts, while a 40 gallon size has an average loss of 96 watts, as an example. Comparatively, the approximate savings in stand-by losses to go from a 60 to 40 gallon size is $6.85 versus $5.67 – a difference of $1.18 per month.