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Tankless Water Heaters

Q: My water heater is rapidly approaching the end of its life. I’ve been reading a lot about tankless water heaters but they seem so expensive. Do you think they are worth the higher price?

A: What appears to be a large expenditure at the outset will eventually save you money in the long run. In contrast to the traditional method of keeping 40 to 80 gallons of hot water at-the-ready in an insulated tank, tankless or on-demand heaters produce hot water only when it is needed. Since hot water is generally required for less than a few hours each day, you can easily benefit from high efficiency designs that provide hot water when you want it. Less fuel is required for a given volume and temperature of water, with corresponding cost savings and pollution savings.

Assuming that you consume the same amount of hot water at the same temperature as before, you can save energy and money by eliminating the slow leakage of heat from the hot water tank and piping. Actual savings will depend upon how much water you use, how far it must be piped from your existing heater and the extent to which that piping travels through unheated spaces. It is reasonable to expect improvements in your hot water bill of 20 cents on the dollar. For a monthly water-heating cost of $50 dollars, you may expect savings of $10 per month on your energy bill. If the switch to on-demand water heating is made when your old hot water tank conks out, which you say it is, the effective net cost of change will be much lower and your monthly cash-flow will improve immediately.

On-demand water heaters heat water directly without the use of a storage tank. Therefore, they avoid the standby heat losses associated with storage water heaters. Either a gas burner or an electric element heats the water. As a result, on-demand water heaters deliver a constant supply of hot water. You don’t need to wait for a storage tank to fill up with enough hot water. However, an on-demand water heater’s output limits the flow rate.

Typically, on-demand water heaters provide hot water at a rate of 2 to 5 gallons per minute. Gas-fired on-demand water heaters produce higher flow rates than electric ones. Sometimes, however, even the largest, gas-fired model cannot supply enough hot water for simultaneous multiple uses in large households. For example, taking a shower and running the dishwasher at the same time can stretch an on-demand water heater to its limit. To overcome this problem, you can install two or more on-demand water heaters, connected in parallel for simultaneous demands of hot water. You can also install separate on-demand water heaters for appliances – such as a clothes washer or dishwater – that use a lot of hot water in your home.

For homes that use 41 gallons or less of hot water daily, on-demand water heaters can be 24% to 34% more energy efficient than conventional storage tank water heaters. They can be 8% to 14% more energy efficient for homes that use a lot of hot water – around 86 gallons per day. You can achieve even greater energy savings of 27% to 50% if you install an on-demand water heater at each hot water outlet.

Although gas-fired demand water heaters tend to have higher flow rates than electric ones, they can waste energy if they have a constantly burning pilot light. This can sometimes offset the elimination of standby energy losses when compared to a storage water heater. In a gas-fired storage water heater, the pilot light heats the water in the tank so the energy isn’t wasted. The cost of operating a pilot light in an on-demand water heater varies from model to model. Ask the manufacturer how much gas the pilot light uses for the model you’re considering, if this is what you decide to do. If you purchase a model that uses a standing pilot light, you can always turn it off when it’s not in use to save energy. Also consider models that have an intermittent ignition device (IID) instead of a standing pilot light. This device resembles the spark ignition device on some gas kitchen ranges and ovens.
There may be some initial obstacles to overcome. Installation will be required in the immediate vicinity of a bathroom, kitchen and/or laundry room. So, space could be a concern. If the new water heater is fueled by gas, there may be some fuel delivery piping and exhaust venting issues to be addressed by the installer. If the new unit is electric, expect some minor rewiring and the installation of new circuit breakers.

Most on-demand water heaters have a life expectancy of more than 20 years. They also have easily replaceable parts that extend their life by many more years. In contrast, storage water heaters last 10 to 15 years. Periodic water heater maintenance can significantly extend your water heater’s life and minimize loss of efficiency. You should read the owner’s manual for specific maintenance recommendations.

Be sure to get bids from two or three installers and/or plumbing contractors for true costs of equipment and installation.