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Are Tankless Water Heaters Really Green?

Instant water heaters don't have the standby losses of storage units, but when the result is an 'endless supply of hot water' real savings are dubious

Posted on Jul 19 2010 by ScottG

Tankless water heaters have one advantage over conventional storage units: no standby losses. Instead of keeping water hot around the clock, regardless of whether it's actually needed, tankless units heat water only when a tap or an appliance is turned on. By rights, this should mean lower energy consumption, a decidedly green advantage.

But, as Ed Welch asks in a Q&A post, where are the savings when he can't get his kids out of the shower? "I know we waste more water, as a result waste more energy heating that water," he writes. "And the kids are not even teenagers yet!"

In addition to arguing the merits of tankless vs. tank heaters, Green Building Advisor readers had plenty of suggestions on the most economical ways of heating water and how to reduce consumption.

Pros and cons of tankless heaters

Welch writes that according to the Department of Energy, a tankless heater should save between $100 and $150 per year when compared to an Energy StarLabeling system sponsored by the Environmental Protection Agency and the US Department of Energy for labeling the most energy-efficient products on the market; applies to a wide range of products, from computers and office equipment to refrigerators and air conditioners. storage heater. But, he adds, the savings aren't significant and they probably don't factor in the long-shower problem. Moreover, tankless units cost two or three times as much as the best storage units, require a stainless steel flue, are difficult to install and cost more to maintain.

You got it, answers Robert Riversong. "You're quite right that the super-sized burners on high-volume tankless heaters make no ecological sense," he says. In addition to high initial costs and higher maintenance costs, Riversong adds, hard water can leave mineral deposits in the heat-transfer coils, which may force the purchase of a water softener.

Yes, says Michael Chandler, a builder in Chapel Hill, NC, on-demand hot waterSystem to quickly deliver hot water to a bathroom or kitchen when needed, without wasting the water that has been sitting in the hot-water pipes, which circulates back to the water heater. heaters are "more of a luxury than an energy conserving solution," but keep in mind that most gas tank-style hot water hears are only about 60% efficient. Electric heaters can be even worse from an efficiency point of view. If the source of utility power is a coal-fired plant, only about a third of the energy potential of coal is actually available at the panel, making it "practically criminal" to use one of these appliances.

"One thing not mentioned in this discussion is that a tankless HWH is a great solution for some, not all," writes Richard. He lives alone, is frequently away from home and doesn't see the point of keeping 40 gallons of water hot around the clock. "I use cold water for laundry and quick hand washing," he says. "My only hot water use is showers, dishwashing and washing up."

First, limit hot water use

No matter how the water is heated, using less of it conserves energy. That's a no-brainer. But posters differed on the best ways to accomplish that seemingly simple end, especially when children and teens live at home.

That's simple, Riversong says: "The only 'green' way to save water heating energy is to use less hot water. Unfortunately, that requires imbuing our children with the old-fashioned ethics of forbearance and limits - and no piece of technology is going to do that. It's part of the responsibility of parenting."

Besides, he adds, people seem hung up on taking frequent showers in the first place. With water shortages expected to become a major problem, it's better for health as well as the environment to bathe less often. After all, that strategy served our forbears just fine.

Lucas Durand came across an interesting conservation approach when he visited his brother in South Korea. The brother's small apartment was served by a tankless hot water heater, but it could be activated only by pushing a button on a control panel. That got you 10 minutes worth of water. If you wanted more, you had to press the button again. The "big catch" was that you could press the button only five times in a 24-hour period, and that had to cover all hot-water needs, not just showers.

"This set-up may not have been typical of every home in Korea, but it does show that concepts of hot water use vary widely even within the developed world," Durand wrote. "In other words there are many, many people living in civilized parts of the world that do just fine on what some North Americans might consider a water ration."

Danny Waite had another suggestion: an $8 ball valve installed on the hot side of the water heater. It could be shut off whenever a shower went on too long. "My teenage sons quickly learned to limit shower times to under 5 minutes after instantaneously having their hot water eliminated," he says. "Cold water seems to awaken the senses and get one to think 'green.'"

Looking for economy water heating

If on-demand heaters are not a shoo-in for most economical, what is?

Riversong's suggestion is an indirect hot water tank connected to a high-efficiency boiler. Indirect heaters have no heat source of their own but tap into the boiler via a heat exchangerDevice that transfers heat from one material or medium to another. An air-to-air heat exchanger, or heat-recovery ventilator, transfers heat from one airstream to another. A copper-pipe heat exchanger in a solar water-heater tank transfers heat from the heat-transfer fluid circulating through a solar collector to the potable water in the storage tank.. The arrangement, he says, provides nearly unlimited hot water as it heats the house with very low standby losses. Fuel consumption is a fraction of what a large tankless unit would use.

Chandler proposes using a tankless heater to heat water in a tank, in much the same way an indirect system uses a boiler, and adds a link to an illustration (with a warning that while he's a licensed plumber, there's still something of a "mad scientist experimentation" at work).

Solar hot water collectors are another possibility, but here opinions were divided on whether the sizable investment they require is going to pay off.

While Chandler thinks solar collectors will reduce energy consumption, fellow senior editor Martin Holladay writes that most people won't see a payback for between 30 and 60 years. In particular, he cited a 2006 study by Steven Winter Associates that examined a $7,800 solar hot water system in Massachusetts and a $6,500 system in Wisconsin.

In the case of Massachusetts, annual savings were a measly $135 with a payback of 58 years; in Wisconsin, savings were even lower, $86 years, with a payback after 76 years. "Finally," he adds, "it should be pointed out that the researchers assumed zero maintenance costs -- and we all know that's not going to happen."

Stephane Boisjoli suggests the installation of a drain water heat-recovery system, which captures transfer heat from the water draining from a shower to the incoming water supply. These passive devices are installed vertically to replace a section of conventional drain line. There are no moving parts, and no maintenance. Savings can be considerable.

Finally, there are on-demand hot-water circulation systems in which hot water is pumped to its point of use after a button is pressed or a motion sensor in the bathroom goes off. As the water warms up, it's recirculated so none of it is wasted. After a short wait, when the shower or tap is turned on, hot water is available right away. For long plumbing runs, such a system might make sense.


Jul 19, 2010 3:04 PM ET

The premises here are all wrong...
by Roger

Take a look at a So. Calif. freeway in rush hour traffic: over 90% of the cars have one person in them, and a significant percentage are gas guzzling SUVs. If we follow the logic of this article, we should only make Smart Cars and Prius's available on the open market, since if you give people an inch they'll take a yard.

You've got to separate human behavior and technology: work on your children's behavior so they don't take 15-minute showers, and don't blame the technology for their bad behavior.

The modern tankless water heater is largely German technology, who have been using it as their primary water heating source for decades now. German behavior complements their technology: they take quick two-minute showers because saving and conservation are ingrained social values (Germans consume half as much energy as Americans, per capita).

We heat our water with a state-of-the-art propane tankless water heater, for less than $8 a month. We heat our well-insulated home with wood pellets, for about $800 a year (Massachusetts). By focusing on the source of good energy conservaton--personal conservation habits--we can live rich, comfortable, lives with a fraction of the energy of the highly wasteful boiler system proposed here.

The boiler system proposed in this article is incredibly wasteful from an energy point-of-view: it has to operate all year round, whether one is at home or not. Running water through pipes in the walls and floors during a New England winter is flat-out insanity, it's a ludicrous waste of energy. Numerous homes where I live suffer significant damage every winter because of broken water pipes. The solution? Crank that boiler up and make sure those pipes are hot enough! Ditto for the summer: you got to have that boiler cranked up and running to heat water, even though it's 90 degrees outside. Yeah, real smart.

Jul 19, 2010 11:32 PM ET

public hot water, private hot water
by user-788447

I like this type of blog entry. I think you are smart to mine some of the more substantive discussions, reformat them, summarize various points and provide links to related content.

I would like to expand on Lucas Durand's comments on South Korea. I lived in South Korea for over two years and the system he describes is typical. My beliefs in how people can live better are influenced by what I experienced in Korea (although Korea culture gradually moves in the direction of our culture in many aspects.)
Small on demand units were used for both DHW and space heating. South Korea's heating season is relatively mild compared to our cold climates and the average size residence is small compared to US standards (although newer apartments are getting larger). Single family houses are typically only found in the country side in farming villages. Single family homes in the city are reserved for the wealthy. Multi unit condo-like buildings (but not exactly) and high rises are the norm. Small on-demands suffice for in floor heating because 1) the milder winters, 2) smaller square footage, 3) lower heat loss because mutli unit building, and 4) Koreans traditionally sat and slept on the floor. People kept warm not so much by maintaining warm conditioned air but by direct conduction and radiation from the floor. I found the direct heat sensation on the body very pleasant. (The younger generation of Koreans are moving towards using chairs more exclusively. This is going to mess up their effective heating method.)
The push button system that Lucas' describes is in part a function of bypassing the in-floor heat to supply DHW. I found it very difficult to control the water temperature when I showered in Korea.

Koreans don't expect the same at home shower/bath experience as we do. I observed on average Koreans sweat a lot less than I did and probably did not need to shower as much to get rid of body order. Also Korea has a strong public bath culture so on a frequent basis, instead of the daily shower at home, one a week more or less you went to the bath house and spent time not only washing put doing the sauna, hot bath, cold bath, massage, scrap the skin clean ritual.

Our efforts to be 'green', 'sustainable' etc. are largely tied to private residences that encompass many functions that used to be part of the public realm. Not only do I think there are limits to how much we can reduce our impacts on the environment when everything is contained and privatized in single family homes, but I also think our culture lacks some of the most interesting spaces and experiences that occur in public venues.

Jul 20, 2010 4:56 AM ET

Response to J. Chesnut
by user-756436

J. Chesnut,
Good post. I used to live in South Korea, where I taught English. They have the best public baths in the world! For about a dollar (okay, this was 30 years ago) you got showers, faucets, a sauna, a cold pool, a warm pool, and a pool that was so hot you couldn't get in unless you were shivering from staying too long in the cold pool.

In most of Asia, including Turkey, Russia, Japan, and Korea, bathing facilities have traditionally been provided on a neighborhood basis instead of in every private home. This is a much more efficient use of energy. If you are lucky enough to live somewhere with a rich tradition of public baths, you certainly get better facilities than the typical U.S. home. And it's more social.

Jul 20, 2010 9:22 AM ET

modern boilers
by NRT.Rob

to Roger:

Your understanding of modern boiler technology apparently lacks. the article was referring to modern modulating/condensing, low mass boilers with attached indirect fired water heaters. they don't "run all summer' for hot water. They run when the tank needs heat, then shut off. Good ones will even purge their remaining heat into the tank when they are done, leading to relatively small heat waste per firing cycle, and even if they don't, they are low mass, not big heavy cast iron beasts like they used to be, so the thermal mass issue is greatly reduced in any case. Cast Iron boilers with coils in them running 24/7 are dinosaurs. Unfortunately, still too common up here in the northeast for the oil burners. Purge controls are a must in those cases, if you get a cold start model with an indirect.

The lower your hot water usage, the more standby losses stack up, as a percentage of total energy used. However, flip side of the same coin, the less you use, the longer any potential payback period is for a tankless water heater and/or its ongoing maintenance costs. With your usage, you may be "being green" on energy used, but your situation in no way cost-justifies the use of an on demand heater. You would be best served by a tank heater, economically speaking, and the total energy usage, assuming a well insulated tank, would be only fractionally higher. Especially when you factor in lifecycle costs for maintenance and replacement.

You could have saved more than the cost of a drainwater heat recovery unit going with a tank heater, and saved FAR more energy overall if you had a place to install such a unit. This is why economics matter in green discussions: every dollar you spend unwisely potentially wastes a wise expenditure decision that could result in being further ahead. In fact, the money spent on a tankless could likely have saved more energy other places in the home entirely.

Tank heaters and drainwater recovery are by far the most cost effective and energy effective ways to reduce domestic water energy usage... for ANY GIVEN BASELINE USAGE... short of extremely intermittent usage in which standby losses could dwarf any actual usage, such as in vacation homes.

While tankless heaters have their place, they are probably the most over hyped "green" tech I've seen.

as for the comments on solar and the SWA study, I have to admit I'm confused. they state normal levels of hot water usage, and that the solar provided a 61% solar fraction. But then they calculated the savings at $135 and $86/year. Very simply: does anyone know a home using 60 to 70 gallons of hot water/day that is paying less than $300/year on domestic hot water? Especially the oil boiler in that study... most oil boilers will burn a tank of fuel over the summer if they are doing DHW. I think the "aux. energy factor" assumed is way off base in that study, especially after taking ORNL's domestic hot water study into account which estimates cast iron oil boiler domestic efficiency at closer to 40% than 80%!

Jul 21, 2010 9:02 AM ET

All great comments
by wjrobinson

Roger... you are right... Americans do not take 2 minute showers if hot water is unlimited. How to change that is the carbon tax. Should have used the tax to slow down the economy during the last two bubble economic cycles too, but no now the idiots want to pas it on the backside of a bubble. Dumb and dumber drive this country looking out the back window.

NRT.Rob great post too... lifecycle etc.... total cost of ownership... matter. Hopefully we all go toward solar for water heat and get done with any other form of energy consumption that emits CO2 and comes from a Cartel that isn't happy with us.

My opinion on tankless... not for me or my customers.

Let's get the solar assisted systems down in cost by half soon. Then use a Daikin AC Altherma unit with solar PV. Tax energy till taxes are most of the cost of purchase and drops the BPs of the world take down to $10/barrel (carbon tax @ $70/barrel>$80/barrel oil)

Deficit gone... Solar supported without rebates and teenagers forced with the ball valve trick to take two minute showers. The beginning of the end of foreign dinasour blood dependence.

And the best thing one can do is stop procreating till human populations drop a few billion.

Green... what a funny topic

Jul 21, 2010 10:40 AM ET

more to add
by user-788447

Building Science dot com recently published an article "RR-1002: Preliminary Modeling, Testing and Analysis of a Gas Tankless Water Heater" which argues that the energy savings percentages claimed by lab testing for tankless heater are on average 8%-10% inflated because the test procedures were based on few large draws of hot water that didn't really represent how household typically use there hot water heaters.

Question: When employing solar thermal for DHW do the same arguments hold against using a tankless as a backup/booster for the stored solar how water tank? Is it better to have a storage tank with a heating element inside it to maintain the stored hot water at a certain temperature?

Question: I've recently purchased a condensing/ modulating boiler with indirect hot water for my home. In the process of researching boilers I observed some had aluminum burners and some had stainless steel. Can someone describe what is better and why?

I was a little disappointed to see the long pay back period by the studies concerning solar hot water. (Maybe this is good in the sense that I overestimated the amount of energy a household uses for hot water.) I'm in a cold climate and with my indirect DHW I think now that solar would contribute even less to my own water needs during the heating season because as I understand it as I'm heating the house with the boiler it takes little extrad effort to heat the water in addition.

On the other hand I'm working on designs that meet Passive House energy standards and in cold climates solar hot water is necessary to bring down the total energy use of the househould to meet the requirements. For new energy efficient construction I still think solar hot water is an important component. It is relatively affordable, it is relatively simple and easy to maintain technology and when separated from heating it can be set up to provide a high percentage of the total demand during all seasons (I'm in a region with predominately clear skies).

I know the ROI arguments here are given not to argue against employing energy efficient technologies but to scrutinize priorities and justify costs among different building components. Although I think it would be best to couple ROI information with the associated energy savings figures i.e. it would take x years for the ROI but in that amount of time that would correspond to saving x kBTUs.

Jul 21, 2010 10:52 AM ET

regulators in technological devices is a great idea
by user-788447

I know Germans that take well over 2 minutes showers. I am more frugal then most the people I know from other cultures including those from societies whose on average consumption is much less then us Americans. I would argue most people adapt their habits according to their context. Give an inch . . .
Why does human behavior and technology have to be an either-or proposition. If technology can be developed to maintain appropriate consumption levels all the better. I love the idea of a valve that cuts off the hot water during a shower at a pre-set time. I could use that for myself.

Jul 21, 2010 3:55 PM ET

Carbon tax is an automatic cut off valve.
by wjrobinson

Nothing simpler than cost to change behavior.

Jul 26, 2010 6:57 AM ET

The point I'm trying to make
by Roger

The point I'm trying to make is you complement the technology with a desired energy-efficient behavior. If you are a couple that each take a 2-minute shower a day, use warm water a couple of times a day in the kitchen, and then perhaps once or twice for cleaning, does it make sense to keep a 50-gallon tank (or more) of water heated at 120 degrees fahrenheit 24 hours a day? All for, say, 10 minutes of warm water a day? Oh, by the way, we also have energy-efficient appliances that have their own heating units.

We live rich, productive, and fully modern lives with a fraction of the energy and water of the typical American. We don't need complex heat exchange units and expensive solar systems to justify wastefulness. By the way the drainwater heat recovery unit that NRT.Rob mentions would cost around $700, installed--how sensible is it to spend this money up front to capture a few degrees of warmth for a few minutes of warm waste water a day, all to keep that 50 gallon hot water tank at 120 degrees 24/7? Whether you've got it connected to a boiler or whether it's a standalone, keeping that hot water tank at 120 degrees 24/7 is pure insanity, in my book.

The cost projections given in these comments assume continued cheap American energy and continued American energy wastefulness. The equation will change radically as energy in this country becomes increasingly scarce and expensive.

Jul 26, 2010 7:14 AM ET

Pre-heat tank solar
by Jack

I lived in Houston TX, not known for the coldest climate, an in a 'modern all electric house' circa early '70s. We did find real energy savings during the Carter years when we put a passive solar pre-heat tank on the roof. For most of the year, we didn't need to turn on our electric hot water heater, and even when we did, it had 'warmer' water to heat to our using temp. ... It was less expensive than the various active systems, but I am not sure I would recommend it for cold climates. ... It lasted about 10 years, due to starting to leak because the installers used dissimilar metals (stainless to galvanized I think) on the roof. We had it pulled off when the roof had to be replaced. The tank and enclosure were both in good shape when they came down, so I am sure it could have gone back up but the contractors already had it in their dumpster before I knew they removed it.

Jul 26, 2010 8:09 AM ET

Dream Argument of Storage Heater Manufacturers
by Anonymous

I lived in London for four years and France, five, and tankless water heaters were absolutely reliable. To my knowledge they are the norm in Europe and have been from the 1960s, if not even earlier. To say they are more expensive than storage because of long showers is ridiculous and probably the misbegotten brain child of a pr department.

Jul 26, 2010 8:32 AM ET

Indirect Fired Water Heaters
by BG

Weil-McLain (a German company of all things) offers gas-fired boilers with indirect-fired water heaters. The boilers are high efficiency with an aluminum heat exchanger (93 - 96% AFUE efficiency). The hot water heater is essentially a storage tank that routes its water through the high efficiency boiler to heat the water, with much higher efficiency than you could afford in a tankless heater or conventional stand-alone heater. One advantage of this design is fast recycle time allowing a smaller storage tank compared to a conventional hot water heater. The same design also produces twice the peak flow of of a tankless coil, at least 50% more than a comparably sized direct-fired gas unit, and three times as much as an electric unit. The upshot of all of this is that when you are in the heating season and the boiler is operational you essentially heat water for free, piggybacking on any heating being done with the boiler.

I live in Chicago, which has quite cold winters, and my natural gas use had dropped a *third* over the conventional boiler and stand alone hot water heater the Weil-McLain units have replaced. This is with no upgrades to insulation and factors in the differential in degree-days (external temperature over the heating season).

I live in a 1923 brick colonial with essentially no wall insulation so an efficient heating system was my only easy solution for an otherwise antiquated house construction.

Jul 26, 2010 8:33 AM ET

Frankly, the point of
by Anonymous

Frankly, the point of tankless waters heaters is to save space, not energy.

As was pointed out in the article, there is a huge energy load to start the heater that gradually reduces as the tank is used. This equates to more energy utilized than with a standard aerican tank heater. The majority of the world does not have to room the install the big tanks. Believe me, they would if they could.

Jul 26, 2010 8:49 AM ET

Gas Boilers with Indirect Fired Water Heaters
by BG

Roger in reply to your first post, you've the design all wrong. The beauty of the Weil-McLain design is that the boiler and hot water are separately routed through the heat exchanger on the boiler. Otherwise you'd be drinking and bathing in non-potable water. So when the boiler side is calling for heat it is heating the water for the radiators. When the water heater requests heat it routes its water through a separate area of the heat exchanger, thus keeping it potable (drinkable, etc). In this mode I essentially get a high efficiency heater which one could not afford solely for hot water heating, for free, due to the integrated design.

A final point is that a properly done boiler system can and should be zoned. Meaning that you break the heating circuits (hot water paths from boiler to radiators) into separate zones, so that you only heat the water needed for specific radiators that need heat, rather than the entirety of the house. The zoning involved putting zone control valves on the supply side of the radiator circuit to each room zoned. Then connecting each zone valve to a thermostat installed in each room. I left the bathroom and front hall radiator on the neutral zone (uncontrolled) so that they receive heat when any zone calls for heat. In this way the bathrooms are always warm, and the cat always has a warm radiator to sit on in an otherwise cold house during the day, since I used set back thermostats. Not purely energy efficient, but a nice compromise between comfort and energy efficiency compared with the prior system.

Jul 26, 2010 9:10 AM ET

by BG

One of the most ironic aspects of this discussion is to frame energy efficiency in terms of the pay-back period, rather than in terms of energy conserved. From a planetary (resources) point of view if you can afford to spend more to save more energy, this is a good thing. In my case I can afford this and think this is the responsible choice.

Secondly payback period calculations should always take into account energy pricing. If energy costs of the system double or triple, the payback periods can shorten appreciably over the lifespan of a system.

Although high efficiency systems cost more, they offer upfront an immediate ecological payback (use less resources) and serve as a hedge against higher energy costs.

A perversion of this entire discussion would be to consider that the employing of a high efficiency water heating system would allow you to spend longer in the shower at the same energy usage as an inefficient system. Essentially spending your efficiency to indulge in luxury.

Jul 26, 2010 9:44 AM ET

Just got my email flyer from Fine Homebuilding/GBA
by James Morgan

The plug for this article has its own header which says it all:

"How to waste water more efficiently"

Jul 26, 2010 10:06 AM ET

tankless fad replaced by indirect condensing boiler facts
by Audetat

Necessity is the mother of invention.

The typical family of four uses $50.00 worth of natural gas a month to heat domestic hot water. You don’t have to be finance major to figure out the diversion of these funds to a $5000.00 tankless or a $10,000 solar heating system will not yield a good return, desert climates notwithstanding.

The fact is; Europeans (save the French) import the vast majority of their energy, having either used up most of their natural resources or quit using what remains for dubious "environmental" reasons. France is the only significant exporter of energy following the natural conversion of wartime innovation of nuclear bombs to nuclear power. We Americans originally developed this technology if you recall, but politics diverts reason (The French sell electricity and recycle the waste instead of fighting about which mountain to bury it in).

If we paid 8 times the amount we now pay for fuel –as do the Europeans- we too would be more frugal, suffering a stifled economy and living one-on-top-the-other in 600 sq.ft. or less. I do not long to live like any other culture (my grandfather immigrated from Switzerland of all places for the land of opportunity).

Former clients had me install a German tankless in 1984 and an American condensing boiler with indirect in 1987. My clients have had choices for many years and even though I now specialize in condensing boiler-based systems, I try to keep up with solar, geo (more accurately, ground source heat pumps), air-to-air heat pumps and even various forms of heat recovery and solid fuels.

A few simple “tankless facts”: Soft water is a must, the amount of hot water we in the U.S. use will dictate soft water as the expected serviceable life of any tankless will be much diminished if you feed your tankless hard water. More maintenance is a given. Since the old 60% efficient atmospheric tank-type water heater is thrown out every 10 years or so, we will have to get used to hiring a professional to install and maintain an appliance that lasts twice as long and has moving parts (think power-vented water heater). While we’re on the professional thing, you will need a professional to size a new gas line (and perhaps a larger meter) to accommodate on that “instant” hot water performance) as the typical tankless consumes more than 4 times the fuel of its conventional counterpart. Professionals as it relates to water heaters usually points to a licensed plumber. Having taken plumbing apprenticed and taken plumbing licensing tests in three states, I can tell you there are no questions about tankless water heaters minimum flow, water quality or electricity, forget about microprocessors or flow switches.

In a free society, one cannot successfully dictate the behavior of another (Lord knows we can try) but to be successful we must persuade (some would insult innate intelligence by insisting "educate"). There is no doubt that frugality can be a learned behavior (my wife was born with it) but 2-minute showers? Get serious.

An important point was made and is often ignored. The zealots among us would insist that no price is too high. Freewill comes into play here and everybody has a price. Freedom to choose is in-fact, freedom.

Cost benefit analysis, must naturally start with the numbers, but must end with the things that are important to the individual.

Many of my clients know that natural gas is a strategic investment (90% comes from North Americans sources), clean burning with half the carbon foot print of coal (which is about 90 percent cleaner than it was 20 years ago), and the real pollution NOx and SOx (think acid rain) has always been below the "State of California" standards for condensing boilers and water heaters.

So the sin – if there is one – is not in storing water or even how it is used, but rather in how it if made and the cost thereof.

It is true that most of the tankless water heaters do not condense and therefore have hot stacks, pollution and endless hot water, not much GREEN in there. I would have to disagree with the premise of the article in that geo-thermal (ground source heat pumps) is clearly the latest and greatest fad and diverting significant capital (both private and public) for a very low return on investment for the vast majority of residential applications.

Drain recovery works if you are draining anything, but if you have code dictated low flow appliances coupled with a two-minute shower, good luck with that!

Tankless water heaters are not boilers and should never be used of space heating. I design combi-heating systems for living and can’t design a good one misapplying a water heater. The notable exception is the use of a super-insulated condensing tank-type water heater with a sub-assembly for space heating (not to be confused with a silly “open” system.

Condensing tankless water heaters have their place, but it is mostly in commercial applications. Condensing appliances by-way- recover the vast majority of stack losses by bringing the by products of combustion (mostly water vapor) to the dew point whilst still the heat exchanger. This technology yields 970 Btuh per pound of condensate and often cuts fuel bills in half.

Storing hot water is not expensive if the open flue and requisite open combustion air vent are shut down and the tank is well insulated (the cost to maintain a 40 gallon tanks if literally pennies a day). This means the appliance such as a sealed combustion, PVC (direct vent) condensing water heater or condensing boiler with indirect water heater is the way to get rid of the fuel wasting old-fashioned chimney. The standard for high efficiency boilers is now 95% AFUE. More maintenance and better-educated technicians will be the future, but it is not for the faint of heart.

Finally, though I am in the residential energy saving business, I recognize that a paltry 5% of our energy needs are taken up by residential space heating (20 % of that of domestic hot water) our “energy focus” should perhaps be elsewhere.

Jul 26, 2010 10:38 AM ET

Another inefficiency of tankless heaters
by Luke S

I've used tankless water heaters when living in several South American countries. One annoying aspect of these heaters that FHB nor anyone else ever seems to mention is the low-flow cutoff issue. These heaters contain a valve switch that senses when you turn on the water, thereby turning on the "many blowtorches" heater. One way many people save water with a tank heater (and indirectly save heating costs) is by dribbling out hot water at a very low flow rate when doing things like rinsing dishes, shaving, or washing only your hair in the sink or kneeling over the tub (in lieu of a whole shower). These dribble strategies do not work with tankless heaters, because below a certain flow threshold, the blowtorches turn off and so they are all-or-nothing at low volumes. You can adjust this cutoff point to a limited extent, but in my experience you end up unable to "dribble" hot water for more than the length of the hot water pipe. Then you have to up the flow, wasting cold water in the pipe, until hot water arrives at the tap again.

Jul 26, 2010 3:33 PM ET

ROI vs Conserving Energy
by Anonymous

If the ROI of an energy saving strategy seems very far out, this is a big clue that the manufacturing costs to the earth to produce that highly efficient machine are possibly too high and the overall eco-picture is not so favourable. As much as we criticize existing tax and accounting laws for ignoring the costs to the environment of many processes and materials choices, the dollar cost of things is often an excellent (positive correlation) indicator of the environmental impact of a given product or service - Not always, of course.

Jul 26, 2010 5:55 PM ET

Caveat Emptor: Indirect Water Heater Savings Myth
by Michael Lane

While it is true that indirect hot water heaters off of a boiler system can be one of the more effiecient water heating solutions it can also be an enormous waste. For those months when there is a call for heat the indirect system is an extremely efficient use of natual resources and a worthy investment of your monthly utility dollars. The issue comes in summertime when the indirect water heaters are likely the only draw on your heating system. Over the last few years we lamented over the $1000+ liquid propane bills that we were paying over the course of the summer and shoulder seasons. We are only powering two 50 gal heaters and yet the boilers were running ~5 hrs a day to maintain the tanks at 140 degrees F, which equates to approximately $10-15 a day. $10 X 30 days X 3 months = ~$900 for the summer. In addition to the high cost of heating water in summer one of our tenants has to spend extra dollars in cooling costs due to the heat rising from the boiler room into their unit.
We have since explored the idea of installing an electrical hot water heater for our summer and shoulder season hot water needs and have decided that it will pay for itself within 4 years. ~$3,500 for two electric heaters Figure our monthly costs drop from $300/month for 3-4 months to around $50/month (What our tenants are paying for their hot water needs via electric). $300 - $50 = $250 a month X 3-4 Months = $750-1,000 per season X 4 Seasons = $3,000-4,000.
While we save for the not insignificant cost to add the additional electrical water heaters we initiated a short term solution, turning the temperature to 120 degrees and discovered that it saved us 1.5 hrs of runtime a day and we are considering going to 110 degrees. So while it may seem counter intuitive we would be better served in summertime running an electric hot water heater at our current rate for electricity. To those that live where Natural Gas is available as compared with any other fuel source this may not hold true due to the favorable rate for natural gas over fuel oil, LP, and electric. There are other factors to consider on top of this issue and that is how practical is it or is it even possible to install a more efficient system. The issue we have encoountered is that given the complex structure of our mixed commercial/residential circa 1860 town center building and code restrictions it is nearly impossible to centralize the boiler room or add apartment specific gas or oil based systems because of venting concerns.
The moral of the story here is that unfortunately even the pros get it wrong, as it was the pros that recommended we go with the indirect hot water heaters. So my warning to you is, caveat emptor, as it will likely be a very expensive mistake if you do not make the correct choice for your water heating needs as we have unfortunately learned. The positive is that at least it is an easier fix than lasting peace in the Middle East and a bit less expensive, but only just so. Do your homework and make every attempt to consider all the variables - installation costs, seasonal fluctuations in heating vs. water heating needs, local fuel/electric costs, unit costs... Make a cost matrix so that you can get a better sense of what each of the positives and negatives are for each unit type over the course of the whole year. Do NOT just trust your local plumbing sales rep or contractor's opinion as gospel as they will tend to lean towards the systems and solutions with which they are the most familiar or if less than reputable that will yield them the best profit. Doing your homework and putting together a proper cost benefit analysis is your best possible chance of getting the system that is the best fit for your needs.

Jul 26, 2010 9:51 PM ET

Are tankless water heaters really green?
by Lynn M. De Vaney

Before installing an on-demand water heater, be sure to check you single-handle faucets. Most of these faucets do not totally segregate hot from cold water - especially true if there is any wear in the gaskets and rings. This allows hot water to infiltrate the cold water even when you have the faucet 'all the way over' to cold. On the new, very sensitive units, this minor flow through the tankless w/h will cause the burner and exhaust mechanisms to activate: A real energy and $ waste!

Jul 26, 2010 10:47 PM ET

Tankless water heaters are green
by Noel

We have had a Noritz tankless hot water heater providing hot water to my 2500 square foot home for two years. We live in SoCal. We heat our water and our home with natural gas. Except for the few winter months when we use gas for heat, the tankless water heater has cut our gas bill in half -- a savings of approximately $300/yr., plus substantially reduced hydrocarbon consumption. Another factor in our area is the typically very short lifespan of tank heaters caused by the very hard water. I don't know how long the tankless will last, I am hopeful it will be substantially longer than the parade of tanks we ran through over the past 30 years. As for the comment about single-handle faucets, I have found that not to be a significant factor. All of our faucets except for one are single-handled, and we have still realized the savings detailed above.

Jul 27, 2010 12:19 AM ET

Indirect-fired Hotwater Tank of Michael Lane
by Lyndon

Dear Michael,
I'm unsure of how you are quantifying the inefficiencies of the indirect-fired hotwater tank with NG boiler. What is the big deal about the boiler being on 5hrs a day? I would ask: Is the boiler a variable flame unit - many of the premium units such as Veissman are- if it is on, what flame level is being employed? And how does this compare with the on-time of the regular (gas or electric) hot water tanks you are are comparing to? Most of the cheap gas or electric hot-water tanks are on/off control only. Compared to a variable flame unit, the on-time would be much less since they switch only to full on and full off. I was recently involved in an 8500 sqft new construction residence building in which we installed a Veissman wall-mounted boiler that serves for both the hydronic floor and the domestic hot water. I don't see why it can be considered innefficient in summertime just because the heat is being generated solely for domestic hot water (DHW).

Jul 27, 2010 12:30 AM ET

Indirect-fired Hotwtaer tank of Michael Lane
by Lyndon

I re-read your post - you are running propane. Same argument however.
The indirect-firing boiler is a more efficient maker of heat than a regular hotwater tank system is. What difference does it make whether it is making hot water in the winter or summer? If it is efficient, less heat and fuel is being wasted regardless. I would take a second look at the overall system to see if something else is going on, rather than blame the boiler/whole system concept.
Note that the water in the tank is some 60 to 70 deg F higher than the room temperature. Something I find no-one is talking about that is so cheap and simple is to install insulation on that hot tank - to improve the insulation levels from something like R10 to say R50. This is probably 1/50th the price of any other upgrade/change being discussed.

Jul 27, 2010 9:58 AM ET

To Roger
by Plusorminus30

"New England winter is flat-out insanity, it's a ludicrous waste of energy. Numerous homes where I live suffer significant damage every winter because of broken water pipes. The solution?" Move, to an area with a climate that promotes less energy use!

I know what you're thinking right now, and it's the same reason that I don't drive a Prius or "Smart car" and, that I don't need to be told what to drive at all.

I want a tankless heater for functionality, and to a certain extent, effieciency.

I couldn't care less how the "Germans" do it.

Jul 27, 2010 12:25 PM ET

Making it WAY too complicated ....
by Andy Ault, CLC

Tankless, boilers, direct, indirect, etc., etc., etc. This makes it all WAY too complicated. For less than $100 and two hours time, I'm saving $50 / month on DHW. That's a TWO MONTH payback ... not years! (Granted I happen to live with the single most expensive - per KWH - utility in the nation - BGE)

First, I installed a $60 water heater timer from Intermatic (model #WH40) that I picked up at Grainger Supply and wired it in less than an hour to my existing electric resistance tank-style heater. The timer is set to run from 5:30 - 8:30 AM and again from 6:00 - 10:00 PM. Now instead of heating water 24/7, we are only heating it 7 hours a day (an immediate 60% savings). Add to that the fact that I installed the box at the top of the basement stairs and it has an overide switch. So when we're going away for the weekend or vacation, I simply flip the switch and we don't pay a dime to heat any water for those entire periods.

Next I installed a 10-minute timer switch ($25 from Lutron) in the bathroom my daughters use. There is no manual over ride for this one. So first it solves the issue of them CONSTANTLY leaving the lights on when they leave for school. But, it also leaves them in the dark if they take longer than 10 minutes in the shower. Similar to the ball float mentioned above, it only takes once or twice for that to happen before they change their habits.

So two simple devices, less than $100 and two hours of time, virtually immediate financial payback and resource conservation and efficiency to boot. Clean, simple, DIY (for most).

Yes, I know electric resistance is terribly inefficient, but the tank is still perfectly good and doesn't need to end up in a scrap yard or landfill just because. With the new 90+% efficient units, I'm actually considering replacing it with another electric unit when this one finally fails (don't all faint at once...). It would be substantially less expensive than converting to a gas fuel source and you can't put a tank-style gas unit on a timer anyway. So by using a high-eff electric tank combined with a timer, I still get substantial cost savings and as mentioned in prior posts, I then free-up those funds for possible higher value targets such as air-sealing the attic and adding an HRV.

Jul 30, 2010 8:58 AM ET

To Micheal Lane
by BG

It makes no sense to run your boilers 5 hours a day just to heat two 50 gallon water systems. Can you tell us more about your system components? It appears first that your boilers are not high efficiency, and second that your hot water storage is not thermally efficient in terms of being able to maintain temperature without loss. Or is the real culprit here that you have a lot of load against the system, how many units (families) are you supporting?

Jul 30, 2010 9:03 AM ET

To Andy
by BG

Kudos on your clever solutions! I have long wondered (wished) for hot water heaters to sport timers so you can match your hot water needs to your usage pattern. Thinking out loud though it would also be nice to have an override to turn the timer off for cases where you are home during the daytime. One other tidbit to you for your kindness of sharing your ideas. When you go on vacation if you have a refrigerator with an ice maker, do make sure to turn off the ice maker before you leave and empty out the ice. If you lose power while you're gone, this will avoid returning home to a flooded kitchen.

Aug 2, 2010 7:23 PM ET

correcting false claims from previous posters
by Roger

First Weil-McLain is decidedly not a German company, it's about as American as it gets (with roots in Chicago, where the poster who made this claim hails from). I suspect most heating contractors know that, as boilers go, Weil-McLain is regarded as making a decent product, but it doesn't compete with the build quality and technology of other companies like Buderus and Viessmann.

Second, it doesn't matter how efficient these boiler systems are, they are much more expensive to run over the course of a year than alternative technologies. Home heating and hot water run us about a thousand dollars a year, but if we were to use a Weil-McLain boiler the cost would jump up to about $3000 a year at going oil rates, all things being equal.

Once oil jumps to $5 or $6 a gallon, as in Europe today, things will change here in the States very, very fast.

Aug 3, 2010 2:25 PM ET

by J99aAMQzYo

BG - thanks for the additional suggestions. RE: the timer for daytime: since mine cuts off at 8:30 and not back on until 6:00 that essentially meets the same goal you mentioned (if I understood you correctly).

And re: the ice maker: I actually go one step further when we plan to be gone for any longer than a weekend and shut down the main house valve in the basement. Then I open the upper most faucet and the lower most faucet and drain-down (depressurize) the entire house.

As a contractor I've been called in on numerous occasions for past clients who've come home to find just about any water leak you can think of (ice maker, washer hose, bar sink valve, etc., etc.). This has taught me that you have to take pressure off the entire system because you never know what's going to be the weak point.

I now actually offer this as a service to our clients, many of whom go away to summer homes for weeks and months at a time. We come in the day of departure and drain off the water, set back the thermostats, shut off any non-essential breakers, double-check all locks, windows, etc. Then we come back the day before they get home and bring everything back online.

The whole process (for them or for ourselves) takes less than 10 minutes, and the peace of mind it provides (not to mention energy savings) is hard to put a value on.

Aug 16, 2010 11:57 AM ET

Tankless WH Hype & Nonsense
by Abbra Cadabra

The high start-up costs coupled with costly maintenance & reliability issues make the tankless variety of water heaters a poor option, versus a tank type WH. Face it, it takes the same amount of energy to raise a pound of water one degree F whether its in a tank type or a tankless type heater. Therefore, heat conservation becomes the discriminator, not heat creation.
A tank with a thick jacket of closed cell foam to eliminate stand-by heat loss will outperform a tankless heater every time. Bradford White makes such a WH. Since the fast response of an oversized tankless burner wastes so much energy in its start/stop, warm-up/cool down cycles, it a victim of its own design and usage shortcomings.
The cache' and hype that tankless heaters has received is mostly from the uninformed public who have been sold "the sleeves out of the vests" of the tankless marketing & advertising gurus.

Aug 27, 2010 7:57 AM ET

Tankless versus Traditional Water Heaters
by Texas

Another consideration with tankless is water hardness and scale buildup. How tough is it to descale the heater and how complicated is it? Also, once water in a traditional water heater is heated how much does it cost to maintain that temperature?

Dec 15, 2010 5:28 PM ET

no one has mentioned the heat pump hot water heater
by Joseph

GE (and possibly others) now make a heat pump hot water heater that is very efficient. We are installing two of them in a project in DC after exhaustive comparisons of all the systems discussed here. Also, if installing in an older house basement, it dehumidifies the traditionally damp basement as a side benefit.

Dec 15, 2010 10:20 PM ET

to Andy
by gred

I use a timer as well, one morning cycle only, with the addition of a single 4x10 solar panel with a PV powered pump. On sunny days, the water is HOT in the evening. My WH is in a well insulated little closet. I also put a switch (regular light switch) on the bottom element, so generally I only heat up the top of the tank electrically. And in the winter I get heat from the coil of copper tubing wrapped around my woodstove pipe.
I've installed timers for other people, and for some of my more frugal neighbors, a DPDT 30-amp switch in a convenient location. With about 10 minutes of planning, hot water is ready when you are using a 4500 watt heater.

Dec 16, 2010 1:21 AM ET

Other factors to think about
by Andrew Michler

While I am not convinced tankless is the future most are sealed combustion, often replacing gravity vented tank heaters which need a gapping 6 inch pipe of combustion air. So getting rid of that combustion air can be a big deal in a tight house.

The efficiency of electric is even worse than the article states. The best Coal plant is maybe 36% efficient, line losses are around 50% at times so we are looking at 18% efficiency- ouch.

I also don't buy the solar hot water numbers- a good install can cut gas rates by 70% and when you use propane for example that is a big deal. The idea of a 60 year payback means someone blew it. From what I remember most tankless WH don't play nice with solar thermal so if you are thinking about solar in the future you may have painted yourself in a corner. Anybody know a good tankless that does well with preheated water?

Dec 16, 2010 4:53 AM ET

Response to Andrew Michler
by user-756436

1. Your efficiency numbers for coal-generated electricity are wrong. An efficiency of 36% is far more accurate than your suggested number (18%). Electricity transmission certainly does not result in 50% losses.

2. Very long paybacks for solar hot water system are common in northern states. A 2006 study by Steven Winter Associates calculated a 58-year payback period for a system installed in Massachusetts, while a Wisconsin system had a payback period of 76 years. Steven Winter Associates knew what they were doing. Read more here: Solar Hot Water.

3. You can certainly buy an instantaneous (tankless) water heater that works with a solar hot water system. I have one in my house (the Aquastar 125 S) -- I bought it about 17 or 18 years ago, and it's still working.

Feb 18, 2012 1:38 PM ET

Tankless Missed Points
by user-974388

As usual I am left underwhelmed y an amateurish energy article on GBA. A low flow shower head for $10 will save 10x more than a tank-less unit and reduce total water consumption and waste water discharge. Pipe insulation cost pennies and reduces distribution losses. There is no "free" heat from a boiler when used with an indirect system. If the boiler is running for space heating Btu's are still being transferred to the storage tanks and what about the gross inefficiency of firing a 200,000 Btu boiler in July so you can wash your hands. Not acddressing simple conservation measures and talking about pressing a button in Korea is silly.

Feb 18, 2012 2:47 PM ET

Edited Feb 18, 2012 2:50 PM ET.

Response to Joseph Novella
by user-756436

1. This is not an energy article; it is part of a series called "Q&A Spotlight," and it consists of a summary of the comments of GBA readers and advisors responding to questions on our Q&A site.

2. Your title is "missed points," but many of the points you brought up are addressed in the Q&A Spotlight. Scott Gibson reported, for instance, "No matter how the water is heated, using less of it conserves energy. That's a no-brainer."

3. There is no reference to "free heat" from a boiler. Of course a boiler requires fuel.

4. Many of the people quoted in this Q&A Spotlight, including Michael Chandler, appear to share your skepticism concerning the value of a tankless water heater. Chandler is quoted as saying that tankless water heaters are "more of a luxury than an energy conserving solution."

5. If you want to read a GBA article on water heaters (instead of an old Q&A Spotlight), I suggest this one: All About Water Heaters.

Oct 8, 2013 12:38 PM ET

Cost difference is minimal vs. storage tank if you shop online
by houptee

If you do your homework and purchase the tankless unit online not through a local plumber they are now almost the same price as a storage tank heater. One example is the Takagi TK-Jr2 that has similar capacity of a 40 gal tank and can be found on many websites for under $650. Venting is another $200 max if you keep the vent as short as possible. Homeowners can pull permits to install the unit in single family homes in most states. As long as you have an existing gas pipe large enough to support the BTU's of the tankless it is not difficult to install using PEX tubing for the water lines and corrugated stainless gas connectors of the rated BTU capacity. Most units now have a cord pre-wired to plug into a nearby outlet eliminating the need for electrical work.

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