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Tankless Water Heaters – Is it a Good Investment for Your Home?

Most homes rely on a water heating system that is ridiculously wasteful. There is usually a large storage tank between 40 to 50 gallons in size, which is filled with water, and energy is poured into it round the clock to get the water ready. Once someone uses up all the hot water, it can take a while before the emptied tank is heated again. There is also the issue of energy-robbing sediment and leaks. It is for this reason that most people are now turning to tankless water heating systems for homes.

But is a tankless water heater a good thing? The answer is yes because this system generates hot water only when it is needed and for as long as you need it. Additionally, tankless water heater costs will save you between 27 to 50 percent on fuel costs. The question you may have now is can I replace my water heater with a tankless system? Yes, you can, but you need to understand the tankless water heater pros and cons before you get started.

What is a Tankless Water Heater?

Also known as an on-demand water heater, tankless water heaters only heat water when you need it. They require less space compared to storage water heaters and can thus be installed in a closet, on exterior walls or any convenient place in the house. Tankless water heating systems for homes can heat water in the entire house or a single point like the sink, shower or appliance.

When the hot water is turned on, water will run through pipes and end up in the heater unit. The water is then heated by an electric element or a gas burner. The tankless water heater is best because the system provides between 2 to 5 gallons of hot water a minute. What is even better is the fact that you can install 2 or more tankless heaters if your demand for hot water is high.

How Do Tankless Water Heaters Work?

Can you run out of hot water with a tankless water heater? Before you replace water heater with tankless, you should understand how it works. Here is a description of a tankless water heater installation.

  • Hot water tap (1) activates the system.
  • The flow sensor (2) detects the flow of water into the heater and signals the control panel to produce hot water.
  • For gas-fired units, the control panel (3) turns the fan (4) on to force air in. The gas valve (5) opens to allow gas in, and the burner (6) ignites.
  • The heat from the flames will be captured by the heat exchanger (7) and transfer it to the water.
  • The overheated water will be tempered by the mixing valve (8) as it exits the exchanger.
  • The temperature sensor (9) detects if the water is at the right temperature. If it is not, the panel will adjust the gas valve, mixing valve and flow-regulating water valve (10) accordingly.
  • Exhaust gases are removed through a sealed vent (11).
  • A pressure-relief valve (12) prevents a dangerous build-up of pressure.
  • Isolation valves (13) make flushing out scale deposits fast and easy.

water heater scheme

Difference Between Gas and Electric Tankless Water Heater

Are gas tankless water heaters better, or are electric tankless water heaters more efficient? This is a question you must answer before choosing between a gas and electric tankless heater. There is never a really simple response to this question. Both options are great since they have a fair share of strengths. You also need to note that each household is unique, so a full house electric tankless water heater that works for your neighbour may not be necessarily ideal for you.

When selecting a tankless water heater, the decision has to be based on your budget, hot water demands, personal preferences and installation opportunities. There is also the fact that many areas are not fortunate to have both electric and gas options available. In this case, the decision is made for them. If you are torn between a tankless gas water heater and tankless water heater electric, it is recommended to consult a professional to help you make the best decision.

Gas Tankless Water Heater Cost

In terms of the initial installation cost, gas tankless water heaters cost significantly more. This is because costly modifications have to be made to your home to accommodate the gas and venting requirements. On average, it will cost more than $1,000 to get a whole-house gas tankless water heater. This does not include the cost of installation. All the same, gas prices are lower than electric costs in most areas. The operating cost is thus lower.

Electric Tankless Water Heater Cost

Electric tankless water heaters are easier to install just anywhere and are thus cheaper to install. Whole-house electric tankless water heaters cost between $500 and $700.

Gas Tankless Water Heater Installation

Gas tankless water heaters are harder to install. They cannot use existing gas lines due to their high gas consumption. The existing venting ducts are also rarely adequate. As a result, gas tankless water heaters have a complex venting and combustion air supply requirement. These requirements make the installation both complicated and expensive. Extensive and often expensive home modifications will have to be made to accommodate gas and venting requirements. While the initial cost is high, it is worth it when you consider the low operating costs.

Electric Tankless Water Heater Installation

The electric tankless water heaters are a lot easier to install. This usually leads to a low installation cost. In addition, these units are smaller in size, which means they can be installed in more spaces than gas tankless heaters. The units are about a third the size of tankless gas heaters. Moreover, since there is no gas combustion, the unit does not need ventilation. This reduces the cost of installation significantly and offers great flexibility in regards to where the unit can be installed.

Electric tankless water heaters are less complicated than gas units. They are smaller and can thus be installed in closets or other concealed spaces. This makes them an excellent choice for new home construction where you can plan the location of the electric tankless water heater.

If you will not require to upgrade the power of your home, installing the electric unit will be inexpensive and very easy. However, if a power upgrade is needed, the costs may skyrocket. This is why electric tankless water heaters are not ideal for older homes.

Gas Tankless Water Heater Efficiency and Operating Costs

Although gas tankless water heaters are more efficient than their tank counterparts, their peak efficiency stands at 80 to 85%. This makes them less efficient than electric tankless water heaters that have an efficiency of 98+%. All the same, gas tankless systems are cheaper to operate thanks to the low gas prices. However, gas prices are more volatile than electricity prices.

Electric Tankless Water Heater Efficiency and Operating Costs

Electric tankless water heaters achieve a consistent efficiency rating of 98+%. This makes them more efficient than gas tankless systems. It is also good to note that in many regions, high gas prices are experienced. This makes electric tankless systems the more affordable option. Even where the cost of electricity is high, the efficiency of electric systems usually offsets the high cost of fuel.

How Much Hot Water Gas Tankless Water Heater Can Deliver

Tankless water heaters measure their output in terms of flow. Gas tankless water heaters deliver more hot water per minute than electric systems – they deliver more than 8 gallons per minute. This is what makes them the better choice for households with high hot water demand.

How Much Hot Water Electric Tankless Water Heater Can Deliver

Electric tankless water heaters are able to deliver up to 8 gallons per minute of hot water. It is important to note that with tankless water heaters, the output gallons per minute will be impacted by the incoming water temperature. The colder the incoming water is, the lower the output will be. Colder regions get a lower output flow.

How to Maintain Gas Tankless Water Heater Can Deliver

Gas tankless water heaters have a higher maintenance requirement than electric tankless water heaters. The gas tankless heater has to be inspected at least once a year by a qualified technician. This is done to ensure there is safe fuel combustion and all the appliances are performing correctly. Gas tankless units are prone to mineral scale build-up and thus require frequent flushing. A homeowner can complete most general maintenance tasks, but it is always good to leave the work to a licensed professional. Gas units are harder to troubleshoot.

How to Maintain Electric Tankless Water Heater Can Deliver

Electric units require very little maintenance. The only maintenance required is occasionally cleaning the inlet screen filter and flushing the unit annually to eliminate limescale build-up. Electric tankless water heaters are easy to troubleshoot, diagnose and repair. The simplicity of their design further makes them last longer.

Factors That Impact Any Tankless Water Heater’s Life in Your Home

The most common issue with tank-style water heaters is that they will eventually start leaking and will have to be replaced. Tankless water heaters, on the other hand, are built to last. Their design makes them easy to repair, and the parts of the unit can be replaced as required. The service life of a typical tankless water heater is 20 years, both gas and electric. You should, however, take note of the factors that impact the service life of a tankless unit. They include the following:

  • Acidic water

Acidic water will break down the plumbing and heat exchanger. Acidic water is also unhealthy and hard on your appliances. In many cases, acidic water is usually treated before the installation of a tankless unit. Always address the issue of acidic water before installing a tankless unit.

  • Hard water

This is water that has high mineral levels. Hard water causes gas tankless units to build scale at an accelerated rate. Installing a water softener or performing frequent maintenance is the only way of dealing with hard water.

  • Installation

To get the most from your tankless unit, you have to ensure it is installed properly. Always work with a qualified professional to help with sizing and installation.

  • Maintenance

Annual maintenance will extend the life of your tankless water heater. Your unit needs to be flushed annually to eliminate scale build-up.

Gas Tankless Water Heater Service Life and Warranty

Gas tankless water heaters are designed to offer a service life of up to 20 years. However, the service life can be impacted negatively by poor servicing. Needless to say, these units are more difficult to service than electric units because they are more complicated. They come with varying warranty covers. The most common warranty you will find is a 10-year warranty on the heat exchanger, 5 years warranty on other parts and a 1-year warranty for labour.

Electric Tankless Water Heater Service Life and Warranty

The service life of an electric tankless water heater usually exceeds 20 years. This is all thanks to the simplicity of the unit’s design. Warranty for the unit varies, and parts are usually covered for 5-years and 1 year for labour. Electric units are easier to troubleshoot, diagnose and repair.

Do Homeowners Prefer Gas Tankless Water Heater Over Electric Tankless Water Heater And Vice Versa?

As you may have noticed, both electric and gas tankless water heaters do the same thing; they deliver hot water. However, they are also totally different in several ways. As a result, the final decision on whether to go with a gas or electric unit comes down to a homeowner’s preferences.

For safety reasons, some homeowners are uncomfortable using gas units. In that case, they opt for electric units. Others have preferences for one type over the other for various reasons, including the availability of energy in the event of a major regional emergency like a natural disaster. In contrast, others make their choice based on environmental reasons.

Each homeowner usually evaluates their needs against the pros and cons of each option. If you are stuck on which option to use, you can always consult a professional for help. An expert will give advice mostly based on your budget and hot water needs.

Pros and Cons of Tankless Water Heater

Pros of Using Tankless Water Heaters

  • Instant hot water

The grand benefit of using a tankless water heater is that you are no longer limited by the capacity of the storage tank heater. You will be able to turn any water source into hot water when you need it. The tankless water heater technology will offer a consistent supply of hot water for washing dishes, washing clothes or drawing a hot bath, even when doing all those tasks all at once. You will get up to 8 gallons per minute with an electric unit and more with a gas unit.

  • Lower energy bills

Tank-style units rely on a tank. As soon as water sits in the tank, it loses heat, and the unit will keep turning on and off to keep the water warm. Tankless water heaters heat the water fast and when it is needed. As a result, these tanks offer a whopping 40% energy savings. These modern units are engineered to be highly efficient.

  • Long-lasting

Tankless units have rugged construction and materials that enable them to have a long life expectancy as well as low operating costs. Unlike tank-style units with a maximum lifespan of 12 years, tankless water heaters have up to 20 years. Electric units last longer. It is also good to note that tankless units have replaceable parts, which helps extend their life even longer.

  • Space-saving

Traditional water heaters take up about 16 square feet of floor space. Modern tankless units are the size of a carry-on suitcase. This means you can install them almost anywhere. They hang on a wall up and out of the way.

  • Eco-friendly

Tankless units reduce the consumption of non-renewable fuel sources and have replaceable parts.

  • They are safer

Tankless units will not spill gallons of water or harbour bacteria.

Cons of Using Tankless Water Heaters

What is the downside of a tankless water heater? Tankless units do have a few disadvantages. These disadvantages include:

  • High installation cost

When switching to new technology, you will pay a high initial cost to install a tankless unit. The high costs go to both the heater itself and the installation costs. Tankless units require new venting and new gas lines. This may involve expensive home modifications. However, the low operating costs will help you recover the installation costs.

  • Water output

While it is wasteful to have a 60-gallon tank filled with hot water, it is pretty convenient to have that much water. This is more so if your household has high hot water needs. Tankless water heaters are efficient, but their output is slow. This problem can be solved by installing several tankless units.

  • Payback takes time

Bearing in mind a tank-type heater costs about $400, and a tankless gas heater can save you $100 per year, it may take time before you recover the high installation cost of a tankless unit. However, because tankless units last long, you will start saving after 6 years, the same time it takes for a tank-type heater to start failing.

How to Choose the Right Tankless Water Heater

Choosing the best tankless water heater requires that you understand the size that will be perfect for you. Tankless water heating systems for homes that are too small will not adequately meet your hot water needs. Then again, a heater that is too big will be an unnecessary cost.

Can you run out of hot water with a tankless water heater? The answer is no, but the supply may be slow. To determine your hot water needs, calculate how much water you need during peak demand. This is when the dishwasher is running, you are doing laundry and are taking a shower all at the same time. This will help you know how much water you need. Always consider the flow rate (GPM) and the temperature rise of a unit.

Calculate the GPM

To better understand your hot-water needs, you have to make a list of the total number of fixtures or appliances you use simultaneously during peak demand. You then have to add up individual flow rates to get the total flow rate. The manufacturer’s manual for each appliance or fixture will give you information on the flow rate. All is not lost if you cannot find the flow rate or GPM (gallon per minute) on your appliances. You can calculate the GPM of a unit using a bucket and a timer. The formula to use here is 60 divided by the number of seconds it takes to fill a gallon. Calculate for all fixtures or appliances and add to get the total.

Be Aware of Temperature Rise

The second thing to think about is the temperature rise. The GPM of a tankless unit depends on the temperature of the water coming in. To do so, groundwater temperatures vary and range from the mid-30s to upper 70s degrees Fahrenheit. North America has three climate zones: Northern Zone, Central Zone and Southern Zone. The Northern zone registers the lowest temperatures, whereas the southern zone registers the highest temperatures.

Home water temperatures typically range from 110 degrees to 120 degrees. To determine temperature rise, you need to subtract the temperature of incoming water from the desired internal water temperature. For example, if the incoming water temperature is 57 degrees and desired shower water temperature is 120 degrees, the temperature rise will be 63 degrees.

Taking a look at sizing charts or consulting an expert will help choose the best tankless heater for your hot water needs.

If You are Not Sure to Consider Getting a Hybrid Water Heater

Are you still not sure if a tankless water heater is right for you? If you are used to tank-style heaters, it can be hard to switch to modern tankless units. The good news is there is a hybrid water heater option.

The hybrid water heater is a totally different system that uses electricity. This unit has a storage tank which is similar to that on a traditional tank-styled water heater. The distinguishing feature is how the water is heated. The unit does not create heat. Instead, it works by moving heat from surrounding air into a converter which uses the acquired heat to heat the water with the help of a heat pump. Since these units get heat from the surrounding air, it is imperative that they be installed in a climate-controlled area. The unit must also be in a large space to allow it to pull more heat from the environment.

The hybrid water heaters combine the features of a tank-style and a tankless water heater. As a result, the unit is twice as efficient and can be installed using the existing setup. In addition, supplemental heat from the air means less heat will be needed from conventional methods.

Final Thoughts on Tankless Water Heater – Is it Actually Worth It?

When tankless water heaters first hit the market, manufacturers fell short of delivering on their promises. Instead of abandoning the concept, they went back to the drawing board and fixed the problems that consumers’ problems. One of the questions consumers were asking was can I replace my water heater with a tankless? Some manufacturers place their input and output waterlines on top of the unit instead of the bottom to respond to this question. This makes it easy to transition from tank-style to tankless units. Some added flexible exhaust pipes can be connected to the existing ductwork. Newer models of tankless gas water heaters are compatible with existing ½ gas lines.

Advances made by manufacturers have made it easier to meet tankless water heater requirements. But, if you are wondering, is one tankless water heater enough for a house? Our team can help with sizing or recommend installing more than one unit.

Whether you are wondering why tankless water heater or torn between gas and electric tankless water heater, we are here to help. Call us today.

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