What to Expect from Tankless Water Heaters

As sales of on-demand, instant, or tankless water heater sales skyrocket in the US, more consumers are starting to wonder: are tankless water heaters worth it? As of 2009, they had taken roughly 8% of the market, with expected increases of that figure in 2010. Because the technology is beneficial to the environment but can involve some inconveniences, I feel that people should be able to look at an unbiased source to decide for themselves what is best for them.

Advantage Number One – Conservation of Energy

Reports indicate that tankless water heaters conserve between 10-30% of the energy that conventional water heaters use, which means that without a doubt they are beneficial to the environment. On average, each household spends about ¼ of its energy on water heating. So, going tankless, one can expect to shave 5% off utilities.

Problems with Going Tankless – Upfront Cost

But I would not cut off my right arm to save twenty gallons of oil each year, and I would not pay $2,000 to do so either. So, the question becomes, do the disadvantages to the consumer outweigh the benefits, or not? Here's the economic perspective:

Tankless units are more expensive (almost 2x the cost of conventional water heaters). However, one of the reasons they have become more popular, despite the price gap, is Energy Star, the Environmental Protection Agency's seal of approval on products that are beneficial to the environment. Any water heater with the Energy Star seal will allow for a tax refund for 30% of the cost, up to $1,500. For more information on Energy Star, see my other blog entry on Hybrid Water Heaters.

But even with the government incentives, tankless water heaters are still more expensive, especially due to increased installation costs. Gas powered heaters, in particular, which are more efficient and have a higher output (more gallons/minute) than their electric counterparts accrue installation costs that can rival the cost of conventional units, as new gas lines must be made from scratch. Free estimates in the California Peninsula can be found here.

Tankless – Less Convenient?

Consumers report that tankless water heaters have problems with either small or large demands. On the large side of the spectrum, that means that running the dishwasher and shower simultaneously can overrun some units. While paying a little more attention to the hot water consumption in one's home is not a deal breaker, at least in my opinion, it is definitely a red mark.

On the small end, the amount of hot water required for washing one's face, or shaving, is not enough to turn many units on. As a result, adjustments must be made, say, by filling the sink with hot water instead.

Some Useful Resources for Further Reading

• The most useful consumer review

• The most comprehensive, technical, but easy-to-understand explanation of tankless heaters, with gallon per minute (gpm) ratings on most household water sources, flow rates, etc.