TANKLESS WATER HEATERS: Is This Technology Right for You?

Of all the ways energy is used in modern homes, heating water is one of the largest and arguably one of the most wasteful. About one third of all household energy consumption goes to heating water, and reducing this percentage is the driving force behind tankless water heaters. But is a tankless model right for you? Perhaps, but not necessarily. I’ve installed and used tankless water heaters, and this article is a true view of what this technology is like.

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Pros and Cons of Tankless Water Heaters

Also called on-demand water heaters, the roots of this technology go back to 1930s Europe. On-demand water heaters are not only physically smaller than their tank-style counterparts, but also potentially more efficient. Today’s technology is mature and reliable, though it’s not necessarily for everyone. You need to understand the pros and cons of actually living with an on-demand water heater before you can make an accurate decision about whether or not to invest in the technology.

This tankless water heater is one we installed in my son’s house. Compact size is one of the advantages of this technology.

On-demand heating systems get their name from the fact that they heat water only as it’s needed, seconds before it comes out of the tap. Without the energy required to keep a 40 or 60 gallon tank of water hot all the time, on-demand heaters do use less energy – all else being equal – because they eliminate stand-by cooling losses. The hitch, however, is the rapid rate of energy transfer required to heat two or four or six gallons of water each minute, from icy cold temps to steaming hot. In some situations this challenge is a non-issue, but in others it’s something that might cause problems you need to consider ahead of time.

Two Types of On-Demand Heaters:

  1. Electric
  2. Gas-fired (both propane and natural gas)

Gas is definitely the way to go if it’s technically possible at your house. There are two reasons why and both spring from the high rate of energy transfer required to make on-demand water heating possible.

Electric On-Demand Heaters

These offer the advantage of simplicity, but they’re not my favourite. Sure, they don’t need a chimney or wall vent, and they require no new gas pipe connections entering your home. Simple wiring and plumbing connections are all that’s needed. The challenge, however, is the high rate at which on-demand heaters use electricity when water is flowing, and the wiring and electrical infrastructure required to support this current draw.

The fact is, it’s not unheard of even for homes with a 200 amp electrical service to lack sufficient capacity to support an electric on-demand heater along with other domestic loads. Before you make a purchase, contact an electrician to determine if your home has what it takes to support electric on-demand technology. Many don’t. Also, as electric utility companies start to change to smart metering systems, it’s quite likely you’ll be financially rewarded for keeping your peak electrical usage low and centered during off-peak hours. The sharp spikes in electricity usage created by non-gas on-demand water heaters makes life more difficult for utilities and will probably be financially discouraged more and more as time goes on.

Gas-fired On-Demand Heaters

Gas is a better energy source when dealing with high rates of energy consumption, because it can easily deliver the energy required in a short time. This is why gas-fired on-demand heaters are the dominant technology. Models that vent through the wall are typically easier to install because they need no chimney, though these direct vent models are sometimes more technically complicated and expensive.

How Much Hot Water Do You Consume?

Regardless of the type of on-demand heater you choose, it’s important to get an accurate sense of how much hot water you’re likely to need at any one time. Any model you choose must be able to match your maximum gallons per minute water demand. Some units, for example, can only heat enough water for one shower at a time. If someone decides to do the dishes while you’re lathering up, you both get lukewarm water. Models are certainly available large enough to handle multiple loads, you just need to realize that it’s important to look for them specifically. This is especially true if your incoming water is particularly cold, as you’d get from a deep well.

Also, if your water supply is rich in dissolved minerals, you will have to periodically remove scale build up on the heat exchanger inside the unit. Be sure that water supply lines feeding the heater are equipped with shut off valves and quick disconnect fittings to make this maintenance chore easier. Descaling is not an insignificant chore. We do it at my son’s place, and it requires a pump, some hoses, and a 5 gallon pail to circulate vinegar through the heat exchanger. The process takes several hours. Given the moderately hard water he’s got, this needs to happen every six months or so.

Water passes through these finned passages as flames from this gas-fired unit heats the water in seconds. Tankless models eliminate standby energy losses, making them more efficient than tank-style water heaters. If your water is hard, you’ll need to descale this heat exchanger ever six to twelve months.

Technical Complication

Tankless Water Heater
There’s lots of technical magin going on inside any tankless water heater, making DIY troubleshooting success unlikely.

Tankless water heaters are vastly more complex than tank-style heaters. There’s circuitry and switches and all kinds of other stuff. Open up a tankless heater and it looks like the insides of a laptop computer. While any handy homeowner can troubleshoot and repair a tank-style heater using inexpensive parts available at any hardware store, if something goes wrong with your tankless heater you’ll need to call in a skilled professional. All this complication also means that tankless heaters are 3x to 4x more expensive to buy than tank-style units. I’d be surprised if energy savings would ever pay back this difference in purchase price.

The video below I made shows tankless water heater technology in more detail.

On-demand water heaters are here to stay, and that’s a good thing. They’re a compact, efficient, reliable option for many households. Understand what’s involved in choosing well for your situation and you’ll be heating water as efficiently – and enjoyably – as possible.

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– Steve Maxwell