Water Heaters - Electric tankless option ?

I have been pumping water out of my basment for about a week now, I've been told that it's rain comming in through the wall, but I thik I sprung a leak in my tank, I'm clutterd around the tank at the moment, can olny get to the controls, but I'm correcting that today, if I find I have sprung a leak I'm considering going tankless, it would be electric, my question is, would tankless be cheaper to operate than a regular tank, there are only 2 of us here, and I don't forsee that changing anytime soon, I've been trying to guesstimate how often it would need to come on each day to provide us hot water, if were not doing laundry that day I'm guessing around an hour a day, wich is a lot less that the current 6 hours each night our tank runs to heat up, our current tank is a 120 gallon tank that we got from AEP 13 years ago.
Any info would be appreciated.

...would tankless be cheaper to operate than a regular tank,...

Probably not.

However, a 120 gallon water heater is a HUGE water heater for a residence. Unless you are washing dishes or clothes immediately before or after taking a long hot shower you can easily get by with an approximately 60 gallon heater.

The electric water heaters of today have far better insulation than the ones of twenty years ago. They have extremely low "standby" losses. They only use electricity when actually heating the water and if you use no hot water they will stay hot for days without using any electricity.

as i am planning on building a home soon I have been reasurching this and mostly what I have found is that a tankless only saves you money if you hardly ever need hot water, and even then you need it close to where the hot water will be used. the pay back for tankless for most people is about 5-6 years according to the fed dept of energy web site.
get yourself a 60 gal high eff unit and start saving now.
life begins when the kids leave home and the dog dies

Unless you are building new construction, go with the new 95% efficient electric tank water heaters. 50 or 80 gallons. Makes good sense. Electric tankless is for new construction because you will need to upgrade your electrical service (double it). It cost mke $1,000 to upgrade the service from 200 amp to 400 amp when building the new home. It would cost $5,000 to do the same thing after the fact.

I love the unit but there is a learning curve and I have found that my wife (and other wives of friends) do not adapt so easily to the tankless. Temp fluctuations at the kitchen tap. Tankless doesn't like on/off..on/off, etc.

Personally, I'm going to install a 50 gallon electric tank as a pre-heat to the tankless. The storage tank (hence the purchase of a 50-gallon electric tank) will eventually be solar powered. Instead of incoming inlet water at 52 degrees hitting the tankless, the water will be pre-heated to about 85 degrees. Momma will be much happier. Me...it works fine just the way it is. However...I've got (and want ) to live with momma. :)

A gas tankless would be the preferred method, and they DO save money, regardless of how much water you need.
I'd recommend against an electric tankless unless that was absolutely your only option.

Computer controlled models will output the same temp water within a degree or two regardless of the flow rate.

A properly sized unit can be centrally located with no problem.

As Furd said, 120g is huge for a residence, especially for 2 people. A 50g would be more than enough if you want to keep the tank.

I installed a Bosch electric tankless almost 1 year ago. The inital costs were significant (cost of the the unit,cable,breakers and in my case sub panel).

Heres the real deal. I'm married living in upstate NY, a family of five, we all take one shower a day. Some of us -2- when it's required. We use cold water only for the clotheswasher, we have a dish washer.

We had a 50 gallon oil fired hot water heater. Two years ago it cost me $368.00 for enought oil to last -6- months ! That was -2- years ago.

The Bosch is costing me about $35.00/month more on my National Grid bill.

Theres some down sides to be sure. We have a well and with the variable water pressure the temp will change when your taking a shower. The other problem is start-up, my unit has a lag time that my wife hates (oh well).

Good luck
JOB