Is a Tankless Water Heater for You?

Tankless water heaters are a popular item these days and they offer real advantages – they save energy and save floor space. That said, tankless heaters are not ideal for every home. Sometimes a tank-style water heater makes more sense (as it does at my house), as I’ll explain. For starters, let me start with a few key concepts . . .

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Hot water is an important part of modern life, and you can get it with a tank-style heater or a tankless model. There’s more to meet the eye with tankless, as you’ll see.

How Tankless Water Heaters Work

There are two kinds of water heaters in the world: tank-style and tankless. Tank-style heaters have been around for many decades and keep 40, 50 or 60 gallons of water hot all the time in an insulated tank, slowly heating new water as it enters the tank to replace what’s been used. The value of a tank-style heater is that it’s inexpensive and requires only a standard 220 volt electrical, natural gas or propane connection.

Tankless heaters, as you’d expect, have no tank. Instead, they heat water only when someone turns on a water tap somewhere in the house. In this way tankless water heaters save energy by eliminating heat that would otherwise be lost from a tank full of hot water just sitting there. These are called “standby losses” in the industry. The heat-only-as-needed function of tankless water heaters is why they’re sometimes called “on demand” water heaters. They only heat water when it’s being demanded.

The whole idea of tankless water heaters makes so much sense, doesnt it? So why aren’t they ideal in every situation? A couple of reasons . . .

Electric Versus Gas Tankless Heaters

At the moment there are two kinds of tankless water heaters on the market: electric and the more popular gas-fired (either propane or natural gas). Both electric and gas can work well, but the logistics of installation sometimes poses problems that aren’t always easy to see ahead of time. For example . . .

The gas-fired tankless water heater (right) is mounted on the wall and has an angled, white pipe coming off the top. Small size and no taking up of floor space is one advantage of tankless heaters.

The big challenge faced by any tankless water heater is the short time available for delivering heat to the stream of cold water flowing through the unit. To be useful in a typical household situation, a tankless heater must be able to raise the temperature of 20 L (about 5 gallons) of water by a whopping 40ºC (100ºF) in just one minute. That’s a huge rate of energy transfer, it has to happen in the second or two that a given volume of water is in the heater, and it’s the Achilles’ heel of electric tankless heaters. I’ll use my own house as an example . . .

As electricians have told me on several occasions, my 200-amp electrical service is not sufficiently large to handle the demands of a tankless electric heater along with all the other electrical loads connected to it. But even if it had been big enough, I’d still be cautious about installing an electric tankless heater because of possible changes in the way electricity will be metered in the future. Right now residential customers only pay for the total quantity of electricity used, with no special premium applied to peak demand. But high peak demand is hard on the grid, and the huge current required by electric tankless heaters during operation is something authorities will likely discourage in the future. Industrial clients pay a premium for peak demand right now. Residential clients probably will in time, too. Electric tankless heaters could be very costly indeed if this ever happens.

Then there’s the issue of how much hot water an electric tankless system can actually provide. For the various models I’ve investigated, water temperature would probably drop to lukewarm whenever more than a couple of hot water taps were turned on at the same time in the house. Who wants that?

The huge, short-term energy demands of a tankless heater makes natural gas or propane a much more practical energy source for tankless water heating than electricity. Trouble is, not all of us have access to natural gas. I don’t, and though I could’ve opted for a propane fired tankless heater at my house, that choice would have required the installation of an outdoor propane tank, supply lines and a vent through the basement wall. I almost considered doing this, too, then I remembered how very easy it is to fix a tank style water heater, and how troubleshooting any kind of tankless system requires a specialized technician. That did it for me. I installed another tank-style heater when it came to upgrade my old one a few years ago. This tank-style heater also allows me to heat domestic hot water with my outdoor wood boiler for six months of the year – something that no tankless heater could do.

All this said, I’m convinced that tankless water heaters are a great idea in many situations. They do use less energy and they certainly take up much less space than tank-style models. I installed a tankless water heater in the small home my son built and it made a lot of sense, mostly because of the heater’s small size. He doesn’t have much room. The technology behind gas-fired systems is mature and efficient. Most units occupy about half the volume of a laundry basket and they operate quietly enough that they’re practical to install just about anywhere. Just because my place isn’t one of them doesn’t mean yours isn’t.

Click to learn more about tankless water heaters in the video below . . .

Question from a subscriber . . .

Q: “I’m building a home in the country involving a well. My plumbing contractor has told me they have not had good experience with tankless heaters in rural applications. He has recommended a tank . Would appreciate your comments. Thanks, Bill.

A: Hi Bill! The issue with tankless heaters is that the heat exchanger inside can build up mineral deposits from the water. If water hardness is more than 15 grains (about 250 parts per million), you’ll need to back flush the heat exchanger using vinegar about once a year to remove mineral build up. Valves are available to make it easy to shut off water to the heater, flush the exchanger, then re-open the water flow without disconnecting any fittings. It’s not a hard job (you’ll need a little pump and hoses to do it), but it is a chore. Hard water is more of an issue with tankless heaters, though tank-style heaters do need to be flush every year or two as well. The job is easier (no little pump is required), so that’s something to consider. Click here to learn about flushing mineral sediment from a tank-style heater. Another issue is access to propane. Are you planning to have propane on your property anyway? If not, then getting one for a tankless heater is another fairly large hassle.

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– Steve Maxwell