Are Tankless Water Heaters worth it?

Should you invest in a tankless water heater?

Water heating has existed for several decades and most household, as well as commercial usage requirements, have so far been met with the tank type water heaters also known as storage water heaters.

These are the conventional units and the tankless unit is the modern day innovation that is based on a single USP – provide water “on demand!”

These tankless water heaters come with the promise of providing an instantaneous and continuous flow of hot water. So where’s the catch?

There is no catch except that the instantaneous and continuous flow is limited. In a conventional water heater, you can receive hot water based on the capacity of the tank, which could vary from 30-50 gallons. Obviously, you will need to wait for the water to get heated and that’s where the tankless models have a distinct advantage.

The question still remains: is it worth investing in a tankless water heater?

The answer to this question lies in the advantages the tankless unit has over the conventional unit and the benefits you can derive. Let’s get a bird’s eye view of what’s on offer.

Replacement of traditional tank water heaters by tankless water heaters amounted to savings of almost 37% in terms of water heating energy per household. Tankless water heaters not only helped households to save energy but also provided homeowners with an acceptable device for heating water at a reduced monthly cost and that too without increasing the total hot water consumption.

Is it the Right Investment Choice?

What is the one thing that everyone wants from their heating appliance? Efficiency!

Higher efficiency is one of the biggest advantages that a tankless water heater has over its conventional counterpart. A study conducted by Center for Energy and Environment based in Minnesota revealed the following:

Let’s start by looking at some of the salient aspects of the tankless water heaters.

Cost of Installation

There are primarily 2 types of tankless water heaters – gas heaters and electric heaters. The gas heater runs on natural gas or propane.  The installation cost is as follows:

  • Electric Tankless: A high-quality whole house unit is available in the range of $500-$700 and the installation costs will require you to change your entire electrical system to accommodate 200AMP electrical service as most homes have a 100-150AMP electrical system. Most electric water heaters require 150-200AMP to ensure you get on-demand hot water.
  • Gas Tankless: There are two types of gas heaters and a high-quality whole house unit is available in the range of $1,000 to $1,500. Apart from this, there will be added installation cost related to venting requirements.

** The tank water heater is less expensive as compared to the tankless unit and the cost varies from $300 – $500.

Energy Cost

A study conducted by Center for Energy and Environment based in Minnesota revealed that the average estimated annual energy cost ranges per household for tankless water heaters $87.70 vis-à-vis tank heaters where the cost is $148.20.

The Present Value Life Cycle Cost (PVLCC) is a tool that is used for identifying the most cost-effective option among different appliances including water heaters that people want to buy.

The above study revealed that PVLCC for the conventional water heater is $5,914.82 and $5,701.95 for tankless water heaters and this revelation makes the latter a preferred choice.

Hot Water Flow Rate

Hot water flow rate is an important criterion for determining the efficiency of water heaters. This rate is different for gas and electric tankless water heaters.

  • Electric Tankless: An electric tankless water heater has the ability to provide a flow rate varying from 3 to 3.5 GPM in cold climatic conditions and 8 GPM in warmer climatic conditions.
  • Gas Tankless: A gas tankless water heater has the ability to provide a flow rate varying from 8 to 10.6 GPM (gallons per minute) in warmer climatic conditions.

** Since tank water heaters have storage space that varies from 20 to 120 gallons, the GPM or flow rate is higher than tankless water heaters. The good news is that a tankless heater can maintain their flow rate for a longer duration but conventional heaters can maintain flow rate as long as there is hot water in the tank.

Space

One of the greatest advantages that the tankless water heating units have over conventional storage heaters is space. They can be installed just about anywhere inside your home. They are mostly used as a Point-of-use (POU) device as well and are quite commonly placed where there is a constant requirement for hot water like bathroom or kitchen.

The only exception is gas water heaters, which needs to be installed in a place from where proper venting can be done.

**On the other hand, traditional water heaters require a lot of space due to their tank size.

Lifespan

This is another big advantage of tankless water heaters. The working lifespan of tankless units is almost 20 years as compared to the conventional heaters that can last for a period of 10-15 years.

The long life span makes this unit highly energy efficient and helps it to provide a better ROI (return on investment) in the long run.

Another interesting aspect is that the tankless units require very little maintenance as opposed to the conventional units.

Yes, tankless water heaters have several advantages and benefits they provide a better Savings to Investment Ratio (SIR). The Savings to Investment Ratio determines whether the potential savings of installing a tankless water heater justifies the initial investment or not. On a long run, the energy factor (EF) of tankless water heaters is higher than that of conventional heating units. The average energy cost of tankless models is $11.21 per household per month while the average energy costs of storage water heaters are around $21.06.

On a long run, the energy factor (EF) of tankless water heaters is higher than that of conventional heating units. The average energy cost of tankless models is $11.21 per household per month while the average energy costs of storage water heaters are around $21.06.

Conclusion

At the end of the day, it’s definitely not an easy decision to make but whether tankless water heaters are worth the investment or not depends completely on your specific requirements. As an example: if you live in a region where electricity is not readily available then it will boil down to choosing between as gas tankless or a gas storage heater. Some of the other requirements include climatic conditions or regions with hard water, size of the household, daily hot water usage predicted, budget, and life span along with maintenance costs.

As an example: if you live in a region where electricity is not readily available then it will boil down to choosing between as gas tankless or a gas storage heater. Some of the other requirements include climatic conditions or regions with hard water, size of the household, daily hot water usage predicted, budget, and life span along with maintenance costs.