Forget the old adage “some like it hot.” When it comes to water for our washing machines, dishwashers, and especially our baths and showers, we all love it hot on demand.

No doubt this is why on-demand or tankless water heaters, long the standard in Europe and Asia, are growing in popularity here in America. Although space constraints and energy demands have led other countries to rely on tankless water heaters, here in the United States there is definitely a dependence on storage or tank-type water heaters.

These systems work by heating up water, typically stored in 40 to 80 gallon insulated tanks, until it is needed. This process goes on 24 hours a day whether the water is needed or not. Although such water heaters have their benefits — they are affordable and capable of providing large amounts of hot water for specific periods of time — they have a downside in that they waste a lot of energy. An Associated Press article recently quoted Peter LaRose of Nelson and Small, a Northeastern U.S. distributor of Rinnai tankless heaters, as saying “a typical 40-gallon heater is like running your car all night in the garage until you drive it.”

How It Works

Tankless water heaters are designed to combat such energy waste by heating water as it is needed. The heating process begins once you turn on the faucet. “Your hot water tap acts as an ignition key for the energy used to heat the hot water,” says Joe Maggio, customer service representative for Controlled Energy Corporation, a tankless manufacturer based in Waitsfield, VT.

Depending on the heating source, either the gas burners or electrical elements will turn on, heating the water as it passes through the unit. Tankless hot water heaters rely on higher Btus to heat the water faster, and seemingly instantly. “It’s a lot of Btus, it’s a lot of heat. It’s like one big instant coffee machine,” says Maggio. The process ends when you turn the faucet off.

Benefits

The result is an endless supply of hot water. “You never run out of hot water, so that’s one of the significant advantages for consumers. You can literally take a 1,000 showers because the water keeps flowing and the unit keeps heating it,” says Jim Tabor, a spokesperson for Controlled Energy Corporation.

No doubt the certainty of finding hot water each time you turn on the faucet is a big draw, but in today’s world perhaps one of the greater benefits of tankless water heaters is the resulting energy savings that translates to money in your pocket and a positive impact on the environment. Because tankless units do not have to cycle on and off to keep and store water at a specific temperature, they literally use a fraction of the energy that tank heaters consume. “Hot water heating is every household’s second largest energy consumption factor,” says Tabor.

According to Seisco, another tankless water heater manufacturer, an average home will waste approximately 10,000 gallons of water per year running it down the drain waiting for hot water. Industry experts suggest, however, that tankless water heaters use 30 to 50 percent less energy than storage tank water heaters and reduce a consumer’s energy bills anywhere from 30 to 40 percent.

Another advantage to tankless water heaters is that they have no tank to fail, rust out or spring a leak. Storage tank water heaters can also decrease in efficiency over time as minerals build up in the tank. The average life expectancy for tank water heaters is 10 to 15 years at which time the tank usually rusts.

Industry experts suggest, however, that tankless water heaters use 30 to 50 percent less energy than storage tank water heaters and reduce a consumer’s energy bills anywhere from 30 to 40 percent.

“Government figures show that about 6H million tanks fail every year in the U.S. and are shipped into landfills and dumps where they take hundreds of years to decompose. This is a significant environmental problem,” says Tabor. “A tankless heater can basically last the lifetime of the house because it has no components that degrade the way a tank does.” Tabor notes that Controlled Energy Corporation has units in the field that are at least 20 years old. If a small component such as an electrode fails it is generally easily replaceable and does not require the replacement of the whole heater.

Tankless water heaters are also small, about the size of a large suitcase, and do not require a whole room for the storage tank. In retrofit situations, replacing a tank water heater with the tankless variety can free up a room for a closet or other storage.

Disadvantages

Tankless water heaters are not without their faults, chief of which is cost. Tankless water heaters do cost more upfront. Experts estimate that a Rinnai tankless water heater could cost $1,000 to $1,200 with installation compared to $200 for a storage tank and $300 to $500 for installation. Tabor estimates that “a top-of-the-line, 80-gallon tank heater” runs $400 to $500 compared to a top-of-the-line, high capacity, tankless heater that might cost $900 to $1,000, depending on where you purchase it. The higher price tag stems from the complex technology and expensive materials inside the tankless water heater.

“When you have a big tank heater, it’s a big tank that has a relatively small heating element on the inside. It can be small because the water sits there all the time and it runs all the time,” says Tabor. In contrast, a tankless heater has a long intestinal heating coil through which the water runs as it is being heated. This coil is usually made of a high-quality material such as copper. “The use of copper as well as the more sophisticated electronics inside really contribute to the cost.”

Powerstream tankless electric water heaters put hot water right where you need it — at the point of use.	Pro Tankless™ by Bosch is a gas water heater.

Considerations

Although tankless hot water heaters promise an endless supply of hot water, there is a catch. In order to do so, the unit must be sized correctly to meet your household’s hot water needs. Before you purchase a tankless hot water heater, you should consider your family’s needs and habits. For example, do you run two hot showers at the same time, or perhaps a dishwasher or washing machine while the shower is running? If so, you will probably need to purchase a high-volume heater that can put out between six and seven gallons of hot water per minute.

On the other hand, if you are a retired couple living alone, your need for such volume may not be as great and you could get by with a less expensive heater that puts out four to five gallons of hot water per minute. Most manufacturers produce more than one model, providing you with the option of purchasing a unit capable of only one major application such as a shower or two major applications such as simultaneous showers or a shower and washing machine.

Tankless water heaters also come in a variety of sizes for different applications. The most common are whole-house versions, although smaller point-of-use heaters are available for heating specific or remote locations such as an extra bathroom or kitchen sink.

Popularity

Major chains such as Home Depot, Lowe’s and Ace Hardware are now carrying tankless hot water heaters and, as Tabor notes, promoting them very aggressively.

“As energy costs go up and environmental concerns become more severe, we are going to see a reversal of the current situation in which 80 percent of American households rely on old-fashioned tank heaters and 20 to 22 percent use tankless,” says Tabor, who expects this reversal over the course of the next 10 years.

The increased popularity of tankless water heaters seems to be consumer driven. Many area plumbing and heating companies admit to not yet dealing too extensively with tankless water heaters.

“Customers tend to be more willing to look at, examine and embrace this technology than do old-line industry professionals, who are very familiar with installing and repairing tank heaters. They are very good with that technology and very comfortable with it,” says Tabor. As a result, companies such as Controlled Energy Corporation have established programs to introduce and train industry professionals such as architects, plumbers, engineers and HVAC people in tankless technology.

Until such programs catch on, Tabor recommends “go ahead and press installers for information. Ask them ‘What about these new tankless heaters I’ve heard so much about on Bob Villa and The Today Show?”