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Are tankless water heaters worth it?

What is the tankless water heater claim?

Many homeowners have seen advertisements for tankless water heaters, otherwise known as “on-demand” water heaters, that promise great features and big savings. An unlimited supply of hot water definitely sounds like a sweet deal. So do reduced water heating costs and instantaneous hot water on demand. But are these claims accurate? Are tankless water heaters any better than a traditional tank water heater?

Tankless water heaters vs. traditional tank water heaters

Below, we’ll compare tankless to traditional tank water heaters to give you a better idea of which might work for you. This includes a few noteworthy downsides that can be associated with tankless water heaters.

1. They’re No Better at Producing Hot Water “Instantly”

"On-demand” tankless water heaters are really no better at producing hot water “instantly” than a traditional tank water heater. If a tankless unit is installed in a basement the same distance from a shower as a tank water heater, it may take more time for hot water to reach the shower from the tankless unit. Tank water heaters send hot water to the plumbing lines as soon as the faucet is turned to hot. But tankless units require a little more time to start sending hot water into the lines because they have to produce it first.

2. They Don’t Supply Enough Hot Water for Large Families

Even the largest whole-house tankless unit may not supply enough hot water for simultaneous, multiple uses. Such a unit may be able to supply only two showers simultaneously or perhaps one shower, a dishwasher and a sink. If the users demand too much water, the temperature will drop. An “on-demand” tankless system probably won’t meet the needs of a large family. In an emergency situation, a tankless water heater doesn’t provide stored potable water like a tank water heater would provide.

In an emergency situation, a tankless water heater doesn’t provide stored potable water like a tank water heater would provide.

3. Tankless Water Heaters Cost More

One major downside of tankless electric water heaters is they are often more expensive to purchase than tank water heaters, and installation costs are normally higher as well. The higher costs are because the construction of tankless units are more complex and thus require a contractor who is highly experienced in installing the units.

4. Tankless Water Heaters Come with Hidden Costs

“On-demand” tankless water heaters do not require a lot of space. That being said, another downside of tankless water heaters is they do often require an upgrade in electrical service. This means members who want to replace an existing tank water heater with a tankless unit or add one as part of a home-remodeling project, will incur additional costs.

If a tankless water heater is installed without upgrading the electrical service, low voltage or sudden voltage drops are likely. This will cause dimming and blinking lights, and other problems.

The extra load also necessitates a larger and more expensive meter loop and main breaker panel for the house. In some cases, members also must pay for new wiring between the distribution transformer and electric meter. Check with a licensed electrician or your local electric cooperative to determine if you must upgrade your electric service connections to support a tankless water heater.

Gas (Propane) vs. Electric Tankless Water Heaters

Gas tankless water heaters, powered by propane, generally do not require upgrades to a home’s basic services like an electric tankless water heater does. However, the same considerations must be made when determining how many hot water faucets will be turned on at any given time and how far away the tankless heater is from sinks and showers that will be using the water. In addition, a study done by Consumer Reports states that the payback for the higher cost of a gas tankless unit is up to 22 years; longer than the 20-year projected life of many models.

Should You Buy a Tankless Water Heater?

Members looking for an efficient water heater should avoid tankless water heaters. Instead, consider a tank electric water heater that is heavily insulated. Look for an energy factor of .9 or higher. These water heaters are often the most cost effective option over the life of the water heater. 

How to Reduce Water Heating Costs

Here are some tips to lower your water heating use and costs from the U.S. Department of Energy:

• Use less, pay less. Fix leaks, install low-flow fixtures, and purchase an energy-efficient dishwasher and clothes washer to conserve hot water.
• Lower the thermostat setting on your water heater. Each 10 degree reduction in water temperature can save three to five percent in energy costs.
• Insulate your tank. Unless your water heater’s storage tank already has a high insulation value, adding insulation to it can reduce standby heat losses by 25 to 45 percent. This will save you about four to nine percent in water heating costs. If you don’t know the insulation value of your water heater tank, touch it. A tank that’s warm to the touch needs additional insulation.
• Insulate your hot water pipes. This reduces heat loss and can raise water temperature two to four degrees more than uninsulated pipes can deliver, allowing for a lower water temperature setting. You also won’t have to wait as long for hot water when you turn on a faucet or shower head, which helps conserve water.

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