Thinking tankless?

September 23, 2008 at 2:25 am 4 comments

By our favorite South Austin contributor–Patti P. 

One night last week I planned on cooking pasta for dinner—knowing what time the family would most likely be home and ready to pounce on their plates—and being that it was my turn to cook—I started the big pot of pasta water before everyone was home and let it simmer on the stove, figuring I could turn up the flame as soon as the front door opened to get the pot to a rolling boil quickly.  Thus dinner would be served, consumed, cleaned up in record time and we could hop right on to evening events. 


Instead of being an organized time saver, I unwisely wasted quite a bit of energy keeping that pot of pasta water on simmer.  Yep, I’m a noodle head in more ways than one. 


But simmering that pot of water is no different than the traditional water heater that you probably have in your house.  It keeps your water heated 24 hours a day—when you’re sleeping and even when you’re not home.   Wasting energy?  Yep you are.  Which may make you a noodle head too. 


An energy efficient but not necessary economical alternative to those continuously heating water tanks is the tankless or “demand” water heater that has been common in Japan and Europe and has gained some popularity in the U.S. since the “go green” movement started leafing out in the early 1990’s.   


Tankless water heaters heat water on demand with a heating device that kicks in when a flow of water goes across the internal sensors (you’ve opened the hot water valve).  The flow sensors turn off when the flow detector detects that you’ve turned off the hot water valve.  Tankless water heaters are about the size of a briefcase; no storage heater with drip pan needed.   


Traditional storage water heaters rise and maintain hot water temperature and have to turn on sporadically to store and maintain your set temperature 24/7.  And they are much much bigger than a briefcase. 


There’s a plethora of information out there on tankless water heaters, and the pros and cons differ depending on whether the source of information is a green energy company, a utility provider, a consumer organization or a tankless water heater manufacturer.  To help you decide if going tankless is for you, I’ve combined all the major pros and cons from the sources above and will leave it to you to weigh your “greens”: energy savings vs. green dollars. 


Tankless pros:  energy, baby

·     Tankless heaters run by cleaner* renewable gas (with electronic ignitions) use about 20% less energy than traditional gas run storage water heaters based on an average usage of 78 gallons of hot water a day (which is about 3 showers, 1 laundry load, running dishwasher once and the faucet 9 times).  Does this reflect your typical household usage?  This percentage of savings is according to the October 2008 issue of consumer reports.  Manufacturers tend to claim 30%-50% energy savings, and the green guide comes in at 34% (which is the average of all claims above).  *Cleaner than electricity. 

·     Tankless do not have energy “standby” losses which can represent 10-20% of a typical household’s annual water heating costs.  Standby loss means that traditional storage heaters have to keep heating water in the tank as it cools off. 

·     Tankless take up only a small space: again the size of a briefcase as opposed to a small water holding silo.  Great feature for smaller house living. 

·     With a tankless you don’t have a huge tank of water sitting in your house with a drip pan underneath…and drip pans are for… 

·     Tankless are less likely to leak or rupture (good news if your water heater is in your attic like my last one was). 

·     Reportedly tankless are less prone to mineral and sediment build up—which makes sense because you’re not storing up water. 

·     Once the tankless water senses the hot water faucet is turned on, you’ll have a limitless supply of hot water (based on your water wise conscience and ability to pay for the gas that is heating your water). 

·     Tankless last about 20 years vs. 10 years for a traditional storage heater (helping to cut down on waste in the landfills). 

·     You can save $70-$80 a year on your household energy bill (based on conventional bill of $200 a year for gas storage heater and $450 for an electric storage heater).  

·     You may be able to qualify for utility company rebates and state tax credits by installing a tankless heater.  Go to  This is a data base of state incentives for renewable energy. 

·     The greenguide says that tankless can provide hot water in as little as 5 seconds as opposed to 30 seconds that it takes some storage heaters to send that warm liquid your way.  Some consumer reports contradict this statement (which is coming up in the cons…)

Tankless cons: green conscience vs. green dollars 

  • Upfront costs for a tankless water heater are high: $800-$1,500 compared to $300-$400 for traditional storage tanks.  The greenguide tested what they claim to be the most efficient systems and these run as high as $3,920 down to $850 depending on size of house and proximity of main tankless to farther faucets/bathrooms.   
  • Installation costs run around $1,200 (compared to $300 for a storage water heater) because tankless need electrical outlets for the fan & internal electronics, upgraded gas pipes and a new ventilation system.   
  • OK, based on the cited initial costs of installing a tankless, it would take you about 22 years to recoup your initial investment (which might be superfluous at this point as tankless have a life expectancy of 20 years. 
  • In order to have enough water available on demand, you may have to have a central unit for the house and then additional POU “point of use” units installed in bathrooms and farther faucet.
  • You may find inconsistent hot water temperatures with an on demand water heater; e.g. if you just need a tiny trickle of water so you can shave, there may not be enough water passing over the internal sensors of the tankless heater to know to start heating.  So, in this case you could end up wasting water by letting the faucet run at a higher rate just to get hot water to lather up your mug. 
  • The faster the flow of water, however, that passes over the internal sensors the less time the water spends in the heating element.  So, particularly in the shower, you may find yourself mixing some cold and some hot water until you can fine tune the temperature.  Could take a little practice.   
  • And, this is where my eyes started glazing over with facts and figures: depending on your ground water temperature for your area (no I do not know mine) your tankless may not deliver sufficient hot water if the ground water is cold.  Like in Vermont where hairdryers are used more for thawing frozen pipes than they are for creating high hairdos.   


So, there you have it.  The pros and cons of going tankless.  If saving energy is important you, the expense may be worth it.  If you want to take baby steps toward saving energy—insulate your current water heater well and reduce your use of hot water. 


Thanks for reading.  Patti P.




Entry filed under: Fix It, Green, Smart Buyers, Smart Real Estate, Smart Sellers. Tags: , , , , , .

Flood zone? Bail out

4 Comments Add your own

  • 2. Plumber Pete  |  November 22, 2008 at 11:58 am

    Your payback calculation may be a bit dated. Energy costs have risen quite a bit in the last year or so, and the yearly energy cost difference between tank and tankless is $100-$200 now. Also, you neglect to include the longevity difference, tankless last twice as long as tanks (DOE study in 2002 found the average tank water heater last 9.1 years in the US). Payback depends on the install costs, as much as anything, which can be two or three times higher with a retrofit tankless. Generally you are looking at 8-12 years payback, and that period will shorten as energy costs rise.

  • 3. Kelly the Builder  |  December 30, 2008 at 4:32 pm

    Another option if the cost of going with a tankless ti too much: A timer on a conventional water heater can save you energy. We set ours to heat in the morning and in the evening. Just as you would set your thermostat for home and away.

  • 4. Clock  |  December 5, 2009 at 3:28 am

    Great info, but a couple things:
    – I have heard that for real savings, a central system is inefficient and wastes money. Point of use connected to showers/tubs/appliances makes sense, and means you’ll need a much smaller central tank and save a ton on energy. However, connecting sinks, or connecting a central unit, causes uncomfortable temperature surges and eliminates the savings.
    – You buy the unit based on the flow rate needed for your local temperature. So if you live in the north, you need a higher capacity machine. It is only insufficient if you do not take that into account, which I’m pretty sure any installation professional would take into account.


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