Tankless Water Heaters Tankless Water Heaters

Did you know that around 20 - 25 percent of every dollar you spend on energy in your home goes to heating water? That estimate by the California Energy Commission is a pretty big number, but luckily there is a way you can reduce it: Get rid of your hot water storage tank and replace it with a tankless water heating system.

What's a Tankless Hot Water System?

Long established in Europe and Asia, tankless or on demand water heaters are becoming more common in North America. Basically a tankless water heater heats water only as it is required. It doesn't heat and store 40 or so gallons of water in a large tank, just waiting for it to be needed.

A tankless unit contains a heating device that is activated when someone turns on a hot water tap. The pressure of the water passing through the unit turns on a series of burners or electric heating coils to provide a supply of hot water, literally on demand. The result for a homeowner is a win-win - they can get rid of that big storage tank in the basement, and they can also save on energy for heating water since they are only heating water when they use it.

Tankless systems are available in electric, propane or natural gas fueled models. You can use them in a distributed hot water system (i.e., have a number of small systems installed in closets or under counters close to where the hot water will be used), or more commonly as a central system (in place of that large storage tank). The tankless water heaters themselves are relatively small, about the size of a medicine cabinet, and you can mount them on a wall.

Do They Really Work?

Providers of tankless systems claim energy savings of 10 to 20 percent due to the elimination of standby losses - the energy that's required to keep the water in a storage tank hot while it's waiting to be used. Think about how hot water tanks operate. Even if no hot water is used, the heat is constantly escaping through the walls of the tank, so the heater will turn on periodically just to keep the water at the required temperature. Plus, in gas-fired systems, the pilot light is constantly burning fuel. These are the standby losses that a tankless system eliminates.

Choosing a Tankless Water Heating System

Since a tankless water heating system doesn't store water, it can't run out, unless the amount of water demanded exceeds the capacity of the system to provide it. So, a tankless water heater's capacity is based on the amount of hot water it puts out (or more technically, the flow rate, measured in gallons per minute or gpm), and the temperature it can raise the water.

For example, a faucet typically uses .75 gpm, a showerhead about 1.0 to 2.0 gpm, and a washing machine or dishwasher about 2.0 gpm. So, if you want to be able to turn on a hot water faucet and run the washing machine at the same time, you will need a tankless system that has a flow rate of at least 2.75 gallons per minute.

If you assume your incoming water temperature is 50 degrees and you want to raise the water temperature to 120 degrees, your system will need to be capable of raising the water temperature 70 degrees. Therefore, in this example, you would require a tankless system capable of supplying at least 2.75 gpm with a temperature rise of 70 degrees.

Generally speaking, the larger the system the higher the cost. So in choosing a system, you do need to do an analysis of your home and lifestyle. Take into account factors like how many people live in the house, how many showers or baths are taken in a day (and at the same time), how many loads of laundry are done and how many times the dishwasher is turned on. These will all directly impact your system requirements.

Advantages of a Tankless System

Beside the energy savings and the elimination of that big storage tank in the basement, there are other advantages to tankless systems.

  • Since it provides hot water almost instantaneously, tankless systems use less water (you don't need to run out cold water waiting for the hot water to arrive).
  • Tankless systems are less prone to rust and corrosion, so the expected life of a tankless system is about 20 years, while a storage tank's life expectancy is 12 - 15 years.
  • If you install a tankless water heater you may be eligible for a federal income tax credit of up to $300.

Sounds great! What's the downside?

As with everything in life, tankless water heaters do have a downside.

  • The initial purchase price of a tankless system is substantially more than a storage system. Prices range from around $200 for a small under sink unit to well over $1000 for a central system (versus about $500 for a storage tank). If you are going to be staying in your home for 10 to 15 years, you should get a return on your investment, but depending on the price of fuel, the payback period can be long.
  • Tankless gas fired units will likely require modifications to your home's gas venting capability, while electric units will probably need an upgrade to your electrical service. These costs are over and above the cost for the tankless system itself.
  • Tankless systems use a lot of energy when they are operating. If having an endless supply of hot water means that you end up taking longer showers and using more water than previously, you could end up eliminating any energy savings.

So, depending on lifestyle, a tankless system may not be for everybody. However, we've all felt the bite of higher energy prices, and for some of us, tankless water heating systems do give us a chance to make that bite a little less painful.

Read our article on Instant Hot Water Dispensers for another hot water option.

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Looking to purchase a water heater? Check out our Water Heaters Buyer's Guide.

Murray Anderson is an experienced freelance writer with articles published in both the United States and Canada. He has written on a wide range of topics, but specializes in home maintenance and how to's.

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