Are Tankless Water Heaters Real Savers?

Tankless Water Heater

One hot area (yes, pun is intended) in energy reduction is that of hot water heating. As I discussed previously, traditional hot water heaters are (almost by design) inefficient. Storing 80 gallons or more of hot water, constantly being heated whether there is a need or not, simply doesn't make much sense. It's no wonder that many estimates show water heating consuming 10% to 25% of a typical home energy bill.

So when it is time to buy a new hot water heater, it would pay to consider a tankless or a solar hot water heater (to be covered next week). However, there are considerations to keep in mind if you want to see real reductions to your gas and electric bills.

Today we'll look at tankless hot water heaters, and the pros and cons of them.

How Tankless Water Heaters Work

There are two types of tankless water heaters - whole house (general) water heaters, and point-of-use water heaters.  Whole house units generally replace the function of an existing tank water heater and are meant to supply hot water to all hot water outlets within a home.  Point-of-use units are installed near the actual point at which they will be used, and only service one or two locations.  The idea behind the point of use unit is that there will be less delay in the hot water reaching the outlet, and less wasted water.

This discussion is primarily regarding whole-house units, though both types operate in a similar manner.  Tankless water heaters use a heat exchanger, powered by electricity, gas, or propane.   Electric units are most often used as point-of-use units, while gas s the most popular whole-house unit, since gas provides higher heating capability.

Tankless water heaters are demand-based, meaning they only activate when there is a demand (such as when you turn on your shower or faucet). Most tankless heaters only activate when a minimum flow is achieved (often 0.5 GPM).  This minimum flow requirement can take some adjustment.  For example, running a faucet part-way on may not trigger the tankless unit.  But then again, most people do not wait for the water to get hot to wash their hands anyway.

Sizing a Tankless Water Heater

Tankless water heater performance is measured using two parameters - flow (in gallons per minute), and temperature rise required.

For example, if your house is relatively new or has had faucets and showerheads replaced within the last 15 years or so, you can assume each water outlet roughly uses 2.2 GPM.  If you anticipate that three outlets might be used at the same time during peak times, then you'd plan for a flow rate of 6.6 GPM.

Temperature rise is a bit more difficult to plan for since you must have an idea of your ground water temperature.  Check out this groundwater temperature map for a rough idea.  Where I live in Arizona, the groundwater temperature is about 67 degrees, so if I want my hot water to be 115, I'd need a 48 degree temperature rise.

If you are looking at a unit whose specifications indicate that it provides 5 GPM heated 80 degrees, you'd need to calculate (or have the supplier calculate for you) how that translates to your needs.  In other words, if the flow rate is increased to your 6.6 GPM requirement, how much does that decrease the temperature rise that it is capable of?

A Note About Electric Tankless Water Heaters

Electric tankless water heaters are generally best suited for point of use applications, and not whole-house, since they do not have the same heating capacity that gas powered models have.

It is possible to use electric for whole-house purposes, especially if your hot water demands are low. However, you must understand how you are charged for electricity, otherwise you may be in for a surprise when you get your first electric bill.

Electric tankless heaters claim higher efficiency in heating water (you'll see claims that electric heaters are 98% efficient, while gas is only 80% efficient).  These claims of overall efficiency generally do not translate to how much it will cost you to operate.

• Electric tankless water heaters have a very high instantaneous demand.  If your utility has any sort of demand charge, you may see an extra premium on your bill
• Many utilities charge using a tiered system, charging more per KwH as you use more.  Adding another high consuming electric unit to your house may push you into a higher tier, resulting in a higher charge.
• In general, burning gas provides more energy for a cheaper price than consuming electricity

That said, I do see electric tankless water heaters as an excellent solution if you need extra hot water capacity in a room that doesn't seem to get hot enough water, or in a detached guest house, pool house, work shop, or similar.

Tankless Water Heater Pros and Cons

Pros

• Heat water "on-demand", so you won't ever run out of hot water - even when the in-laws are visiting.
• Take up less space than a tank water heater
• Less risk of water damage (more tank water heaters fail by springing a leak - this is not a concern for tankless water heaters)
• Last 5 to 10 years longer than tank water heaters
• Many units qualify for federal and other tax rebates
• Some units have remote control operation

Cons

• Tankless water heaters are expensive compared to traditional tank heaters
• Installation can have added costs, sometimes requiring upgrades to gas lines or a dedicated electric circuit, or enhanced venting
• A minimum flow rate is needed to activate tankless heaters (often .5 GPM).
• Whole-house tankless heaters may not supply enough hot water for peak demand if you live in a cold area, have a large family, and/or live in an older house with inefficient faucets and showerheads.

Are There Alternatives To Tankless Water Heaters?

Tankless water heaters provide an excellent alternative that have potential to reduce energy consumption, but you must take into account the pros and cons discussed above.

That said, you still have alternatives. You can stick with a traditional tank water heater, and follow my energy reduction advice. You can purchase a highly insulated unit, and consider a smaller unit if you have purchased other efficient/low water use products (dishwashers, clothes washers, shower heads, etc).

Solar hot water heaters may be an alternative as well. Look for an upcoming article in a week or two that will cover how solar hot water heaters work, and their pros and cons.

As great a solar sounds, you'll want to note that solar water heaters usually have a backup heater that is powered by gas or electricity. So if your usage is during times of the day when it is not sunny, you may be surprised at your bills.

Another option in hot climates (desert Southwest, south Texas, Florida) is the Heat Recovery Unit (HRU) which takes heat from your air conditioner and turns it around to heat water. Not only do you recycle the heat, but some manufacturers claim that your AC will operate at increased efficiency, reducing your cooling bills a up to 5%.

I have no direct experience with HRUs, but would love to get some feedback from those that do!