Is A Tankless Water Heater Worth It?

Intro

So, you think you would like to get a tankless water heater. You have done some research, and learned that they are more efficient. Perhaps you are environmentally conscious, and would enjoy spending a little extra to do what's best for the planet. Maybe you have 3 kids, and find yourself with the short end of the stick come shower time, anxiously rushing through it while hoping that the hot water doesn't run out. Have you ever asked yourself "if the cold water arrives slowly enough, maybe it won't feel uncomfortable?" Not good!

No matter what the reason, this article will explore the question "should I get a tankless water heater?". Note: all of the information contained in this article is based on my own evaluations of each aspect. In order to evaluate your specific water system with maximum precision, I would suggest consulting with a mechanical engineer (I have done this personally). Also, this article only details gas fired tankless water heaters (electric tankless water heaters will be mentioned briefly).

General info

A tankless water heater heats water as the water moves through it, as opposed to a tank (which heats it slowly, then stores it for use). This does not mean that hot water instantly comes out of your faucets (a common misconception). The tankless heater will burn precisely the correct amount of gas to heat up whatever amount of hot water you are trying to use-up to a point. This maximum amount the tankless can produce is measured in "gallons per minute", and is lower in the winter than the summer (because the water coming into the heater is colder during the winter). A larger size tankless, of the more efficient ("condensing") variety, can produce about 5.4 gallons per minute of hot water during the winter in middle Tennessee. If you try to use more, the tankless water heater won't let you-your hot water system pressure/flow will drop if you try to use more than the maximum.

The tankless does this to insure that the water coming out of it is precisely the right temperature. A tankless water heater is a machine with lots of parts. Although surprisingly reliable relative to their mechanical complexity, they are still...complex. This means that there is more that can go wrong. When it does go wrong, it may be challenging to find a plumber who can fix it. Each brand of tankless water heater is built differently, with different parts, and special training is usually required for each brand (including after each brand makes changes to their offerings). If you find a plumber who can fix it, they may not be able to get repair parts right away. A tankless water heater usually requires annual maintenance. Typically, this means "descaling" the heater, which removes hard water minerals that will accumulate inside of the heater and eventually cause damage. One way to mitigate this added expense is to descale the heater yourself (instructional videos may be available on YouTube), or utilize a water softener. Some new tankless water heaters are equipped with an internal hot water recirculating pump, which if connected to a hot water recirculating pipe, can significantly reduce hot water wait times in bathrooms that are very far away from the heater. This is very nice, since some people might have to wait minutes for the hot water to get to them if they don't have one. Some of the earlier tankless water heater retrofit installations connected the tankless to an external recirculating pump, resulting in all sorts of problems that were actually preventable. Issues may include: cold water "sandwiches", recurring error codes, and malfunctions resulting in having to have an "internal cleaning". If you have one of these systems, and have had lots of trouble with it, there is a solution available.

These issues have since been addressed by the manufacturers. A tankless water heater has an internal fan that makes some noise-if you do get a tankless water heater, make sure it isn't installed under your bedroom! Tankless water heaters rely on electricity to operate. This means that if the power goes out, so does your hot water. Some tankless water heaters are installed on the outside wall of the home. They have Small heaters inside of them that keep them from freezing...as long as the power is on. If it is really cold out, and you loose electricity, you will need to act quickly to protect your investment. Many people have asked me about electric tankless water heaters, and experience has shown that they tend to perform poorly during the winter. The electric tankless units themselves are relatively cheap. However, they require massive amounts of electricity in order to perform at their maximum capacity-possibly more than your electrical system can handle. Have you ever wondered how much an electrical system upgrade costs? It's usually not cheap. To answer this question, you will need to consult with a plumber AND an electrician.

Deciding

Below is a basic decision tree I have created. It is based on what I have observed are the 7 most common reasons people are interested in purchasing a tankless water heater. Start at the top of the tree, then follow it down to the different reasons to discover the merit of each reason. More detailed explanations of each reason will follow below:

"I don't want to run out of hot water". How much is it worth to you, to not run out of hot water? If the answer to this question is "whatever it takes", then your
research is concluded-get a tankless water heater, and don't worry about it again.

"I want the best technology and/or to upgrade". Featuring temperature sensors, flow rate sensors, and a computer control system, a tankless water heater definitely has more technology in it than a regular tank type water heater. Indeed, if one removes the front cover of a tankless water heater, they are sure to encounter a web of wires and tubes that would cause the nerdiest tech nerd to begin frothing with excitement as they reach for the owner's manual and installation guide. It is also most definitely a performance upgrade-run that sucker all day and night if you want, you won't run out of hot water!

"My spouse/partner wants one". This reason is best left for the individuals in the partnership to address. However...as almost anyone involved in a successful partnership can attest, a happy partner is of tremendous value to both parties.

"It is more efficient/environmentally friendly". This assertion is not as straightforward as it may seem. Yes, a tankless water heater is more efficient, which is to say that it burns less gas per volume of hot water produced. However, whether or not it is more efficient on your wallet depends on how long you own it, and how much energy costs where you live (see below section "I want to save money). As to whether or not a tankless water heater is more environmentally friendly, one must ask if the operation of AND the manufacturing of a tankless water heater results in less waste/pollution than a tank type water heater...for instance, if a tankless water heater were to produce half of the pollution that a tank type water heater produces while it is operating, but ten times as much pollution is created while manufacturing its mechanically complex components, then is it actually more environmentally friendly? Answering this question would take considerable knowledge and education (an engineer), and good luck getting answers from manufacturers!

"I want to save space". This one is fairly straight forward. How much is the saved space worth to you? Does that amount equal more than the extra cost?

"I want to save money". Ah yes, the factor that is the most important to the most prospective buyers. Since converting to a tankless heater costs considerably more than replacing a tank, hopefully you are wondering if the tankless will save you money in the long run. And just how long is that? This may be calculated by figuring out how much it costs to buy it, then adding that to how much it costs to operate it annually (multiplied by how many years you will probably own it). The annual operating costs that were used in this comparison were taken from the manufacturer's own energy guide (averages based on national energy costs and use rates). Check out the flow chart below, which compares the cost to replace a regular natural gas tank type water heater (50 gallon size), to getting a tankless water heater (not including maintenance vs including professional maintenance, more on that later), all starting from day 1 of a tank replacement or upgrade to a tankless, evaluated over specific periods of time (how much you will have spent after that amount of time). The chart assumes professional installation, $1500 for a tank, and $4000 for a tankless:

Notice this chart does not include electric water heaters...for that, we will need to calculate using the energy guide for an electric tank ($1300 professional installation), and add extra to the tankless install cost for permits/a new gas system ($5500 professional installation). Again, the costs reflect the installation price plus operating the heater over the number of years specified, starting from day 1 of either keeping a tank or converting to a tankless water heater (how much you will have spent after that amount of time):

As I mentioned above, the Energy Guide is based on national averages. Thanks to TVA, Tennessee has some of the cheapest electricity in the country, which means that keeping an electric water heater in middle Tennessee would be cheaper than what is reflected in this table. This suggests that energy rates would influence the annual operating costs in these tables, perhaps significantly. For instance: if natural gas in your area costs twice the national average, then the cost to own would be much higher than what is shown in the above tables (for both tankless heaters and tank type heaters). The other factor hidden in the energy guide is average use amount-this leads to the realization that if you use a ton of hot water, the cheaper energy source (gas) would pay off and begin to save money more quickly. After all, one must recover the initial investment/install cost before starting to actually save money.

The above tables are just a general guide that shows trends over time; if you would really like to know the numbers for your specific situation, you might visit www.energy.gov to make use of the "energy cost calculator for electric and gas water heaters". Remember-the extra efficiency and monthly savings of a tankless water heater must first pay you back for your extra investment before actually saving you money. Will you live in that house long enough to get there? The above tables show that it will likely take 10+ years before you begin to save. Also of interest would be local and/or federal rebates (I suggest checking your energy provider's web site for this after you get a heater replaced, even if you put in a new electric water heater).

"I want to increase the value of my home". I have asked at least 3 realtors if a tankless water heater can do this, and the results have been mixed. Better to ask your realtor this question directly.

CONCLUSION

Wow, that is a ton of information! Best of luck to you with your decision. With this article I have made every effort to give my honest evaluation of the myriad decisions involved in choosing to purchase a tankless water heater. I admit that the information contained in the article may not reflect actual specific conditions on any given tankless water heater installation, and I also admit that my writing may reveal my own personal biases which are of course based on my own experiences and values. I also will acknowledge that although I am a licensed plumber, I am by no means a licensed engineer, and I have attempted to minimize speaking outside my sphere of expertise. I hope that this article is of value to someone as they make their tankless decision!

-Richard Reynolds
Owner/Operator
Reynolds Independent Plumbing & Gas Piping Services LLC