Bring the Heat: Tankless Water Heater Gaining Acceptance As Energy Prices Keep Going Up

By Janice Gaston, Winston-Salem Journal, N.C.

Jun. 14–With water heaters representing 17 percent to 25 percent of a home’s energy costs, it makes sense for consumers to take a harder look at new technology that could save money.

Tankless water heaters have been available in the United States since 1979, but until recently, most consumers had paid them little attention. They are noticing them now because of the energy savings that they promise.

A conventional, storage-tank water heater holds a specific amount of hot water, typically between 20 and 100 gallons. Cold water enters the bottom of the tank, rises as it is heated by a heat source fueled by gas or electricity, and exits out the top of the tank into hot-water pipes. As the water stands in the tank, waiting for someone to turn on a tap or start a washing machine, it loses heat, and more fuel is burned to keep the temperature constant. As storage water heaters sit idle, the water within them loses heat. Those “standby” losses, according to BuildersWebSource.com, can represent 10 percent to 20 percent of the cost of operating the water heater each year.

The tank always contains water, but all the hot water can be used up during periods of high demand. The tank will need time to “recover” and heat more water.

Tankless heaters don’t store water, so they don’t run constantly to keep water hot. Cold water travels through a pipe into the heater, where, on demand, the water is heated by a gas burner or electric element set at a high temperature. Water continues to flow through the heater as long as it is needed, but the flow rate of smaller units may not be fast enough for some applications.

Once tankless water heaters started catching on, Danny Gough said, “Tank people got paranoid and started building better-insulated tanks.” Gough, a building-performance consultant, owns Energy Solutions in Lewisville. Better insulation means less heat is lost from the water in the tank, which translates to energy savings.

Although some consumers have developed a mindset that tankless water heaters save homeowners tons of money, the reality isn’t quite that dramatic, said Michael Cosgrove, an inside-sales representative for Ferguson Enterprises, Inc. Ferguson Enterprises is a distributor of plumbing and lighting supplies.

Gough compared the cost of operating a tankless water heater and a 50-gallon storage water heater. Both water heaters were run by gas, and both were installed in garages.

A family of four would save $38 a year with the tankless heater, Gough said. A tankless heater would show bigger savings in a vacation home, where hot water sits unused for much of the time.

Tankless heaters offer several advantages. The units are small; they can hang on a wall, fit under a sink or in a shallow closet. They don’t require time to “recover” from the use of hot water; the supply is endless.

Then why do tank-style heaters — 60 percent to 65 percent of heaters sold, according to Cosgrove — still outsell tankless versions, which represent 35 percent to 40 percent of the market?

Contractors are more accustomed to installing storage heaters, and plumbers are more accustomed to working on them, Cosgrove said. Also, consumers are more familiar with them.

A tankless heater can cost twice as much as a typical storage water heater run by gas or three times as much as a storage heater run by electricity, Cosgrove said.

A typical, 50-gallon electric storage heater costs about $330, he said, and a gas-fired one costs about $450. A tankless heater that would be considered equivalent to those runs about $1,075.

Gough said that it costs about $400 to install a tanked heater and about $600 for a tankless one, but that labor for either will cost less than that in new construction.

An energy-efficient, heavily-insulated storage water heater can cost about as much as a tankless heater.

Consumers who sometimes have to watch water pour down the drain for a minute or two as they wait for hot water to arrive from a distant storage tank might be intrigued by the notion of the “instant” hot water that tankless heaters are said to supply. But a tankless heater goes through a test sequence when it starts up, Gough said, to check for obstructions in the flue and to check for a reliable means of ignition. The test takes 10 to 15 seconds.

The distance the hot water travels also helps determine how quickly it arrives at a faucet or showerhead. “The record I’ve had is four minutes,” Gough said. That’s how long it took hot water to arrive from a storage heater to a far corner of a “5,000-square-foot starter castle.” In a long run of uninsulated water pipes, hot water loses heat no matter what its source.

A combination of a poorly-designed plumbing system and a tankless water heater can prove disappointing, Gough said. A storage gas water heater with a 60 percent energy-efficiency rating will probably use less energy than a tankless heater in a system that has been haphazardly designed, he said. “Sometimes jumping on the bandwagon is not necessarily the best value.”

Janice Gaston can be reached at 727-7364 or at jgaston@wsjournal.com.

For more information on water heaters, check the Web site at www.eere.energy.gov/consumer/your_home/water_heati…

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