Tankless Water Heaters -
The Debate Goes On

I have many conversations about tankless water heaters. People want to know how good they are, whether they can heat a lot of water at a time, what they cost, how long they last, and what type they should buy. I have several friends who have owned them for years - some love them, and others have learned to put up with their quarks.

While I don't own one yet (I use an indirect water heater), I have experienced them frequently, and have had a few break down occasionally. My friend "Dan, the HVAC Man" who repairs them HATES them. (Click here to watch my "no holds barred" interview with Dan.) Let's cover the essentials so you decide for yourself, whether this is a technology you want to try.

User Experience with On-Demand Heaters

What are Tankless Water Heaters?

How do They Work?

When Not to Choose These Heaters?

How Much will You Save

Average Costs

Deciding How and What Type to Buy

Installation and Maintenance

User Experience with Tankless Water Heaters
Many who own these water heaters claim that there is virtually no difference in how fast water is heated and delivered compared to the storage tank water heater. However, some state that the water takes longer to heat to temperature, and there are others who experience a glitchy hot-cold, hot-cold pattern before the water equilibrates to the desired temperature.

During a recent trip to Europe, the tankless water heater in our apartment was taking its sweet time of 20 minutes to warm up the water to a luke-warm temperature in the shower with no other water running. The technician who repaired the unit replaced a valve. This resulted in slightly better operation, but caused leaking/flooding overnight into our luggage and all over the floor!

The third repair in one week resulted in the whole heating unit and plumbing to be replaced ($$$). Once repaired, the heater was able to heat water within a minute or two of operation to 115 degrees F.

Obviously, operational issues are related to the make, model, flow rate capacity, type of fuel used, where it is installed, and whether the unit is for a single- or multi-point application.

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What are Tankless Water Heaters?
Tankless hot water heaters are also known as demand, instantaneous or on-demand water heaters and provide hot water only when called for. This eliminates the heat losses that conventional tank-style heaters have, during standby mode.

When water is not used for long periods of time during the day, a traditional water heater with a tank frequently cycles on and off to keep the water heated in a storage tank. Eliminating this waste can make heating water 10-45% more efficient, depending on how much water you use.

Tankless water heaters supposedly can last about 20 - 30 years whereas water heaters with storage tanks last 10-15 years. Remember though that the life of any water heater is very dependent on the hardness of the water and how well it is maintained.

So, they potentially these water heaters have a lower life cycle cost (purchase price and operating costs). According to the ACEEE, the average life cycle cost of a gas-fired, no pilot tankless unit with an efficiency factor of 0.82 is about $4,925, while that of a conventional storage tank heater is $5,394 over 13 years.

In other words, the tankless will cost about $370 less to operate during the first 13 years than a storage tank heater. The tankless should also provide many more years of operation, whereas, you would probably need to replace the conventional one within 15 years.

However, repairing these units is pretty expensive, so that might undo some savings you get, unless you are good about simple and periodic maintenance.

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How do They Work?
In order to avoid pipe heat losses, tankless water heaters are usually installed close to the water supply. If your bathroom faucet is too far from the exterior wall, or location of the proposed heater, the cost and logistics of running the plumbing may not be worth your while.

Electric instantaneous water heaters have an electric heating element which passes cold water steadily through, before reaching its destination; in gas powered water heaters, a gas burner heats the water. Typical flow rates are between 2 to 5 gallons (or 7.6 - 15.2 liters) per minute. Gas-fired heaters provide a higher flow rate than the electric ones.

Before buying one or more units, you should have a good idea of your water needs. For example, if you plan on using the unit for more than one task at a time, such as simultaneously taking a shower (uses 2 gallons per minutes)and running the washer, a smaller tank with a 2 gallon flow rate will be stretched to its limit. To deal with your various hot water demands, you can either:

  • Buy a whole-house water heater,
  • Buy two or more units and connect them in parallel,
  • Buy a separate unit for each appliance.

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When Not to Choose These Heaters?
On-demand water heaters are not appropriate for every home application. Check your distribution line to see if your plumbing fixtures are clustered in a small space, and not too far from an exterior wall. Otherwise, you will have a lot of pipe losses. It's very frustrating to turn water on, and wait for a "slug" of cold water to turn warm each time you start the water at a far point-of-use...

Often, for electric tankless water heaters, residential wiring is not adequate to supply the juice needed for the water flow rate, if the unit is to heat water for many applications. Electric units are good for small applications such as half-baths, or kitchen sink.

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How Much will You Save
How much you save over a conventional water heater with a storage tank depends on how much hot water you use per day. If your average daily use is less than 45 gallons, expect to save about 25 - 35 percent. If your average water use is higher, up to 90 gallons, expect to save about 10 - 15 percent over a water heater with a tank.

You can save more if you dedicate a separate unit for each water fixture, but make sure you compare the cost of the unit to the savings you get per year, and see if the savings will pay back for the extra cost within a reasonable period (4-7 years).

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Average Costs
Average installed costs for tankless water heaters are about $1,600. This cost doesn't account for any incentives and rebates that might be available through the government, utility company or manufacturer.

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Deciding How and What Tankless Heater to Buy
If you are considering purchasing one or more tankless water heater, take an inventory of how many water applications you have and how much water each application uses in gallons or liters per minute, so you can determine your demand. I am listing the average flow rates in gallons per minute(GPM) for some basic applications below:


Flow Rate in GPM1.5 - 3.02.0 - - 1.52.5 - 31.0 - 3.0

In order to calculate your demand, add the different flow rates for the applications you might run simultaneously. For example, water for showering, and kitchen sink would require a maximum flow rate of 3 + 1.5 or 4.5 GPM.

Knowing your demand is the most important part of the equation, because how hot the water gets depends directly on how much water is running through the heating element. For the same flow rate, different units heat water by different amounts. So, once you know what your flow rate is, you can choose the model based on the temperature difference between the cold water and the hot water.

The amount of heat needed to raise the temperature of water varies for different areas. For colder areas such as Vermont or New York, the water temperature needs to rise by a higher amount than for a warm area such as Florida. This is an important consideration when deciding on what unit is appropriate.

In winter for example, if your incoming water temperature is 50 degrees F, and the water needs to rise to 115 degrees F for a shower (using 3 GPM), look for a heater that raises water temperature by 65 degrees (115 minus 50 or 65) for 3 GPM flow rate. If someone is going to use the kitchen sink at the same time at 1.5 GPM, then look for a unit that can raise water temperature by 65 degrees for 4.5 GPM of water.

If you choose a tankless unit, look for a gas-fired model with at least an Energy Factor (EF) of 0.82.

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Installation and Maintenance
It should go without saying that before you install your tankless water heater, make sure that you can accommodate the required voltage, current, and circuit capacity for the heater. Generally, most retailers will sell units that can handle most household voltages.

For current and circuit capacity, make sure you have enough capacity at the circuit breaker box to handle the current needed by each unit. Chances are that you will need a separate breaker for each unit. This is what the licensed electrician installing the unit will need to assess.

Once installed, preventative and regular maintenance - like everything else - are key to longevity. Read the owner's manual on the care of the unit, and perform the simple steps necessary to keep things running smoothly. You will also need to have an HVAC technician inspect the unit once in while.

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