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Musings of an Energy Nerd

Are Tankless Water Heaters a Waste of Money?

The energy savings you’ll get from a tankless water heater are usually too low to justify the high purchase price

Will you save enough energy by installing a tankless water heater to justify the high cost of the equipment? According to Minnesota researchers, the answer is: probably not.
Image Credit: John Eisenschenk

Although tankless water heaters are, on average, more efficient than traditional tank-style water heaters, they’re also more expensive — so expensive, in fact, that many potential customers wonder whether their high cost can ever be justified by likely energy savings.

Before you can decide whether to buy a tankless water heater, you’ll need to know how much energy you’ll save. Can you trust the information provided by tankless water heater manufacturers — for example, the estimate from Rinnai’s online calculator that you’ll save $178 per year?

Before I get around to answering that question in detail, suffice it to say: probably not.

Real-world answers from a monitoring study

To figure out the payback period for the incremental cost of a tankless water heater, it would be useful to know:

  • The installed cost of a tankless water heater;
  • The number of gallons of hot water used per day by the average American family;
  • The in-use efficiency of a typical tank-type water heater and the in-use efficiency of a typical tankless water heater;
  • The annual natural gas savings and the annual dollar savings attributable to switching from a tank-type to a tankless water heater.

To find the answers to all of these questions, a group of researchers in Minnesota undertook a monitoring study to measure the performance of tank-type and tankless water heaters in actual homes. The researchers concluded that most tankless water heaters will fall apart from old age before they save enough energy to justify their high cost.

The researchers — Dave Bohac, Ben Schoenbauer, and Martha Hewett of the Center for Energy and Environment in Minneapolis, along with Tom Butcher of Brookhaven National Laboratory and Mary Sue Lobenstein of Lobenstein Consulting — monitored water heaters in ten homes for over a year. Their data have been published…

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  1. stuccofirst | | #1

    That's why I bought an indirect system with a modulating boiler. My bills are still high. Buderus s120 with a Utica USC5.

  2. user-659915 | | #2

    It wouldn't hurt to mention that this study is based on a best-case scenario using natural gas fired heaters. Propane tankless heaters are becoming depressingly popular in these parts. It would be interesting to see how they compare to a well-insulated electric resistance heater like a Marathon. I suspect the payback period would be ... never.

  3. GBA Editor
    Martin Holladay | | #3

    Response to Shane Clafin
    In a previous blog on water heaters, the posted comments included a discussion of Marc Rosenbaum's monitoring data for his indirect water heater connected to a Buderus boiler. Like you, he had high bills, and his monitoring data showed that he was burning a lot of oil to make hot water, especially in the summer. Low-use households will find these indirect boilers to be especially inefficient.

  4. GBA Editor
    Martin Holladay | | #4

    Response to James Morgan
    I agree with your comments. In most areas of the country, it's more expensive to operate a propane water heater than an electric-resistance water heater. Propane is an extremely expensive fuel.

  5. ShyRonnie2009 | | #5

    My Success
    I installed a propane tankless heater a few years ago for about $1800 (part and labor) which includes the 30% federal rebate given at that time. Once thing the article does not mention is the life space of a tank vs tankless water heater, tankless being almost double the life span making saving even greater. In my case, I am saving a lot more money yearly because I went from an electric tank heater in a basement that could reach 35 degrees in the winter. My propane has gone up 10 cents in the last 5 years but my electric has gone up 60% so my cost are more consistent. Be sure to do all your research for your area before deciding because it was a great benefit for me!

  6. HDendy | | #6

    new construction
    This seems to be focused on replacing an existing tank heater. What about new construction where you have to buy either and start either installation from scratch? Seems the "up charge" would be much less and then is it worth it from a payback perspective? Since the tankless units are efficient, you would need to consider it against a more expensive tank, not a bottom line.

  7. GBA Editor
    Martin Holladay | | #7

    Response to Hunter Dendy
    The math is fairly straightforward, so it should be easy for you to do your own calculations if your incremental cost to install a tankless water heater differs from the figures in the cited study.

    On average, the tankless water heaters used 37% less energy than the tank-type heaters. The annual savings ranged from $42 per year for families that used small volumes of hot water to $121 per year for a high-use family.

  8. greenhouse437 | | #8

    Gas draw very high
    As a homeowner who follows a number of heating sites, I've noticed that many of the pros point out that since the btu hot water load exceeds the heating load in many houses, the tankless will require much larger gas draw and supply piping. As it is with so many switching to gas, the aging street line infrastructure may become an issue sooner than later. I'd much prefer an indirect to use storage to give me hot water i need.

  9. GBA Editor
    Allison A. Bailes III, PhD | | #9

    That's for water only...
    That all seems perfectly reasonable, Martin, and I don't think those numbers surprise many of us who understand building science. If you're using a tankless water heater for both space and water heating, however, I think the payback would be more favorable. I wonder if the research team has any plans to look at that system.

  10. kevin_in_denver | | #10

    Low Cost Tankless
    Of course, in new construction, the real estate that a tank uses is worth $300-$600.

    And this Puerto Rican built model sure is cheap: The installed cost would be under $1800

    Even so, I don't recommend them because they are nowhere near as rock solid dependable as a tank style gas water heater. Also, you have to flush them biannually with vinegar? How much does that cost?

  11. GBA Editor
    Martin Holladay | | #11

    Response to Allison Bailes
    Plenty of people have been experimenting with using tankless heaters to supply hot water for hydronic space heating systems, including researchers funded by the Building America program. One of those researchers, though -- Armin Rudd of the Building Science Corporation -- is not yet ready to recommend this approach to builders, because these systems have glitches that can cause major headaches.

    At a meeting in 2011, this is what Rudd said: "Beginning in the mid-1990s, we began using water heaters for space heating. We had failed check valves in Taco pumps. We had scale. You get thermosyphon flow that gets past the check valve. On some systems, we got hot water flow to the coil during cooling. You get hot water heating systems and cooling systems fighting each other. To cut that short, most of those builders went to a different system because of the problems.

    "Then we started using tankless water heaters. In 2006, decided to take another look at this. We had the low flow problem. The units wouldn’t turn on unless you needed .6 gpm. Then we had the frequent on/off flow problem. -- a lot of that. You end up with slugs of hot and cold water in the system.

    "Since 2006, manufacturers have responded to these issues. They are now down to the .4 gpm threshold. ... We're working with NYSERDA on a pilot project up in Utica. We are now monitoring two systems, with and without a small storage tank. We're getting plugging of the inlet filter of the tankless heater. It happens a lot. The aluminum anode rod was corroding enough to plug the filter. It's a recirculation problem. If you have any recirculation, any decay of the anode rod, it will end up plugging your system. So we addressed that problem with a unit with a stainless-steel strainer. Now, it becomes an annual maintenance thing. Before that they plugged up in a matter of weeks. If you have to clean the filter once a month, that’s no good.

    "We have builders asking if we are ready to recommend this type of system yet, and we are saying, “not really.” We are still worried about the high frequency of the cleaning of the inlet filters. Building America doesn’t want to recommend a system that will give us a black eye, and we want to be sure we get the savings that we are predicting. Should we be adding a buffer tank or not? If you don’t have that, what are the problems? We're not sure yet."

  12. GBA Editor
    Martin Holladay | | #12

    Response to Kevin Dickson
    My guess is that the Puerto Rican unit from Marey is designed for high incoming water temperatures. It's probably designed for the tropics, and therefore wouldn't produce very much hot water with incoming water temperatures near 40 degrees F, like we get in the northern half of the U.S. Unfortunately, the spec sheet omits any information on the temperature rise or the incoming water temperature used to calculate gallons per minute ratings.

    Also, the ignition system requires two D batteries. That's no good. "Honey, will you remember to buy some more flashlight batteries for the water heater? I'm getting cold showers again."

  13. user-1067956 | | #13

    It seems like a lot of effort and money to make these tank less units more cost effective. If the average and more typical use is small amounts of hot water on and off through the day with long periods of down time is anyone looking at optimizing small tank type water heaters? What if you super insulate the tank and all of the piping? Is anyone making high efficiency tank type units? If you add a tank to a tank less water heater what is that?

  14. GBA Editor
    Martin Holladay | | #14

    Response to Philip Koepf
    If you are choosing an electric-resistance tank-style water heater, thicker tank insulation will be reflected in a higher EF -- so when you're shopping, look for an EF above 0.93. I've been searching for an online database listing the EF ratings of electric resistance water heaters, but I haven't found one yet. If anyone knows of such a list (one that compares ratings of water heaters from several manufacturers), please share the link here.

  15. GBA Editor
    Martin Holladay | | #16

    Response to Richard Kinkel
    Thanks for the link -- I knew I had seen it before, I just forget where to find it.

    If you are looking for a small, well insulated electric resistance heater, it looks like you can't get one that is smaller than 28 gallons. The best EF for that size appears to be 0.93.

  16. watercop | | #17

    EF and tankless hype
    If the EF isn't available divide 4423 by the annual kwh usage listed in the EnergyGuide - that seems to give a good approximation. I don't see EF on EnergyGuides anymore.

    4423 is the number of kwh needed annually to heat the amount of water (64.3 gallons / day) from 58 to 135 per the DOE WHAM test. If a water heater consumed just 4423 kwh annually, it would have an EF of 1.00, but that would require perfect insulation (in the case of fired or resistive water heaters)

    I think the tankless units are over-hyped, and I'm not suprised to read that they fail to attain published EF. I also wonder how long they'll last and how expensive to repair.

    I also wonder how well they'll cope with hard water over time - the extremely high rates of heat flux across very small heat exchangers would seem to be vulnerable to scaling.

    I grew up in a house with an oil fired indirect tank. During heating season that represents a simple solution operating at the efficiency of the connected boiler...if anything it increases the efficiency of the boiler since it spreads its standby loss across two loads (heat + hot water)

    Efficiency plummets during summer, though - the house goes through half a tank of heating oil, 80+ gallons just to heat water for two people for 4-5 summer months.

    I'd like to add a heat pump water heater for summer use up there, but haven't worked out the details. Cooling and drying the basement would be an advantage along with shutting down the furnace for the summer, but I haven't figured out a spring / fall switchover arrangement that Mom will be able to handle.

  17. Mica239 | | #18

    20 gal electric water heater
    Since an electric tank-style water heater is a viable option (especially in areas without natural gas service), how big of a tank is needed? We have been using a 20 gallon tank for 8 years (only 2 of us in the home and we did not have space for a 40 gallon tank) with no problems. Is there a measurable energy saving by going with a smaller tank?

  18. GBA Editor
    Martin Holladay | | #19

    Response to Joel Cooper
    Q. "How big of a tank is needed?"

    A. You've answered your own question: "We have been using a 20 gallon tank for 8 years with no problems."

    Q. "Is there a measurable energy saving by going with a smaller tank?"

    A. All other factors being equal, a smaller tank should have smaller standby losses, and will therefore save energy. But you have to be sure that the small tank is as well insulated as the larger tank you are comparing it to.

  19. 5C8rvfuWev | | #20

    extra insulation
    Martin, does it make sense (with an electric dhw tank) to "add" insulation -- I had a blanket that slips over the top and it was nice. I'm wondering about adding even more, like wrapping/taping batts over the blanket. (keeping the control panels, etc. accesible of course) Does it make sense? Or am I going to damage something?

  20. watercop | | #21

    Each hundreth of EF is worth
    Each hundreth of EF is worth about $5 per year in electricity at national average electricity rates.

    It used to be fairly routine to add an insulating blanket around water heaters, but the last couple I installed recommended against it owing to improved factory insulation.

    It is getting to the point where most of the loss is via tank fittings - 4 or 5 penetrations through the jacket and insulation.

    Beware that really small tank water heaters (6-20 gallons) don't seem to have an energy guide or AHRI rating, so likely lack decent insulation.

    The sweet spot seems to be 30 gallons / EF = 0.95

  21. gusfhb | | #22

    Funny, I would have put one of these in my last house 15 years ago had they been a consumer item as they are now. HD sells a Bosch for 800 bucks that I think now has a water flow powered ignition. i am sure it would have cost little more than a standard to install but it was a previously unplumbed building.

    I was going to complain that there was no way a retro would cost that much more to install, but then thought about replacing all that gas pipe, yeah, that would cost.

    The new owners replaced the HD cheapo gas 40 gallon unit less than 2 years ago. One thermocouple in 13 years I guess it owes no one a thing.

    Honestly the tankless units are reasonable enough, but plumbers do place a premium on stuff they are not used to. I have a hard time believing it would take an experienced plumber more than a day at 100 bucks an hour to replace any water heater.

    The biggest knock on these that I have seen is that they do not work the way we expect, low flow gives them fits, temps vary.

    That would give me pause more than maybe not getting my money back.

  22. watercop | | #23

    I'd consider a gas tankless
    I'd consider a gas tankless only if space were at a premium and I had natural gas at the house. I'd lean toward a power vented high efficiency storage gas fired heater if at all possible.

    We do routinely install electric trankless units in higher end new construction projects, not for the efficiency but for the ability to mount them near points of use. Obviously we have to plan for them in the electric service.

    We feed the tankless from a preheat tank warmed with a refrigerant desuperheater. Geo units have a desuperheater as a factory option. We sometimes add a desuperheater to an air source heat pump / central AC in cases of families of four or more. For 3 people, a heat pump water heater starts to make more sense as the upstream supply to point of use tankless electric units.

    Electric require service planning but avoid all the gas line sizing, carbon monoxide and venting issues as well as operating at higher EF.

  23. Beideck | | #24

    More to the story
    My fear is that the take home from this will be reduced to the sub-title, "The energy savings you’ll get from a tankless water heater are usually too low to justify the high purchase price." There are two main issues I have with this simplified summation.

    1) As others have pointed out in the comment section, the study was done under conditions that most favor the tank system. The fuel used, natural gas, is the cheapest of fuels typically used to heat water. Therefore, the dollars saved are fewer than if another energy source were considered. The other factor is that the study looks at retrofitting a home that has already been optimized for a tank system. Certainly, a situation of some practical utility, but not the same conditions found when considering new construction.

    2) I believe is it false thinking to evaluate the two approaches based on economics alone. The tankless method saves energy. That means something more than just dollars! Let’s not lose sight of that.

  24. GBA Editor
    Martin Holladay | | #25

    Response to Daniel Beideck
    The advantage of a field study like the one mentioned in my article is that it measures real-world performance and reports real-world costs. Such figures are much more useful than hypothetical numbers pulled out of the air by equipment manufacturers. Of course, any field study can be criticized as unrepresentative; however, as long as the researchers accurately report the conditions monitored during the study, no readers will be misled.

    The researchers in the Minnesota looked at natural-gas heaters; that certainly makes sense, since natural gas is one of the two most common fuels used for heating domestic hot water in the U.S. (The other is electricity.)

    Electric-resistance tankless water heaters are much less common than natural-gas tankless water heaters.

    Moreover, a study that examined homes that heat domestic hot water with propane would have limited applicability, since propane is usually more expensive than electricity.

    Of course you are correct that tankless water heaters use less energy than tank-style water heaters. However, anyone who is interested in lowering their use of fossil fuels or reducing their carbon footprint still needs to consider whether any particular retrofit measure is worth the investment, because we don't have an unlimited number of dollars to invest.

    The idea behind seeking the "low-hanging fruit" is that it's always better to choose cost-effective measures before investing in measures that are demonstrably not cost-effective.

  25. Brian Knight | | #26

    Consumer reports 2008 "study" agrees with not worthwhile
    Although its not nearly as through as the MN study, Consumer Reports had similar findings in its 2008 lab tests:

    It also points out that not installing a water softener with tankless can compromise warranty claims. I think the hard water issues can have a wide range of problems from none to severe.

    Ive always avoided tankless due to the air quality concerns in tight homes and the preference and simplicity of all-electric energy. PV prices are bolstering this strategy and it doesnt get any lower maintenance than the Marathon tank heaters that eliminate the anode rod.

  26. Beideck | | #27

    reply to Martin
    I have no issue with the study itself. I do, however, believe we need to be careful and keep in mind that it not be misinterpreted and applied too generally to fuel sources other than natural gas or to new construction.

    I also have no issue with an economic analysis or seeking the "low hanging fruit" first. I do have issue, however, when just economics alone are considered when discussing a particular technology. I presume after all that the "green" in refers to sustainability not the color of money. If that be the case, shouldn't sustainability warrant some mention when considering a tank versus a tankless system?

  27. GBA Editor
    Martin Holladay | | #28

    Calculating sustainability
    Is it "sustainable" for American families to install tankless water heaters in their homes? Now there is a complicated question! I'm afraid that the ramifications of that question, and the algorithms necessary to solve it, are beyond most economists. They are certainly beyond me.

    To be "sustainable," a practice must not lead to an economic or environmental collapse if it is maintained for 10,000 or 100,000 years. If I had to bet money on one side of the issue or another, I guess I'd place my bet on the side voting: not sustainable.

    Most of the world's population still takes showers by ladling cold water over their heads -- and the sustainability of that practice is open to question, considering looming water shortages.

    In short, I try to steer clear of any pronouncements involving the word "sustainable." For an in-depth discussion of this issue, see What Does ‘Sustainable’ Mean?

  28. Beideck | | #29

    How about green

    So you don't like the word "sustainable". Fine. As the "green building advisor", shouldn't you be advising us on how green something is, and doesn't being green mean something beyond dollars? Yes, doing an analysis is easiest when only the economics are considered and becomes more complicated when other (green) factors are included. However, many of us come here because we care about more than just the bottom line, even if that's not always the easiest approach.

  29. GBA Editor
    Martin Holladay | | #30

    On defining "green"
    I'm afraid I don't have a useful definition of "green" to fall back on. I'm sorry to disappoint you. I'm not trying to be a wise guy; I'm just trying to use accurate language and to encourage careful thinking.

    Probably the most useful definition of "green" (at least for builders and architects) is the definition provided by the green building program that the builder or architect hopes to comply with. If you are enrolled in a green building program that gives extra points for installing a tankless water heater, then a tankless water heater is clearly green.

    "Green" has no technical definition -- only a variety of programmatic definitions.

  30. Beideck | | #31

    It's not easy being green

    Deciding what option is greenest is a difficult task in many cases. If often comes down to comparing apples to oranges. It is easier to just stick with the apples, i.e. dollars, and ignore the oranges, i.e. the other "green" factors. However, we shouldn't forget that the oranges exist too, in my opinion. For some readers the apples will be all that matters, but for others the oranges might change the balance.

  31. GBA Editor
    Martin Holladay | | #32

    Apples and oranges
    It's hard to know which avenue is greenest -- an inexpensive water heater or a more expensive water heater that uses 37% less natural gas. I would usually prefer the more energy-efficient option, but the high price is an indicator that the tankless unit probably has higher embodied energy. It may also require more frequent maintenance, especially if you have hard water.

    One possible downside is that a tankless water heater might encourage longer showers -- an example of the dreaded rebound effect or takeback effect. Of course, this problem only happens with some families.

    In general, I am wary of the "gadgets will save us" philosophy. In most cases, families that want to reduce their carbon footprint can find many ways to reduce the amount of hot water they use -- and that's probably the greenest approach to lowering the negative environmental impact of the huge demand for domestic hot water made by American families.

  32. JimLutz | | #33

    Combi space and water heating with tankless
    The group in Minnesota that did the tank vs tankless study is now working on a project to monitor the efficiency of combi space and water heating systems. An initial report of the study was presented at ACI.

  33. GBA Editor
    Martin Holladay | | #34

    Response to Jim Lutz
    You're teasing us -- can you give us a two or three sentence summary?

  34. CKQVPn5YhE | | #35

    I'd just like to mention the
    I'd just like to mention the origin of these water heaters is the single water tube system from pre WW2 Europe.
    Most houses had just one or two cold water taps in an average family house. One le(a)d pipe ran from the outside of the house to the kitchen then, when WC's were placed upstairs , the lead pipe ran up the interior wall to the WC/bathtub above. To get hot water to the kitchen and upstairs meant taking a short lead branch from the cold supply to the wall hung heater right at the point of use.
    I've never thought of these old tech heaters as efficient and infact I doubt that you could buy one in northern europe.
    The important fact is that they were point of use heaters so replacing a central boiler with one of these just could not work very effectively.
    These heaters started to go out as copper pipe came in, in the late 1930's.

  35. watercop | | #36

    ...not so fast!
    Martin writes above "... natural gas is by far the most common fuel used for heating domestic hot water in the U.S."

    I don't agree, and neither does ACEEE, per their late 2011 study of emerging domestic water heating technologies.

    ACEEE writes that storage heaters command the vast majority of the water heating market, and storage heaters are about even split between gas and electric models.

    Tankless offers a substantial bump in EF when compared with traditional center flue gas fired water heaters - those center flues lose heat 24/7, contributing to the abysmal EFs of that type of heater.

    What irks me is the gas tankless industry's marketing hype that claims that a storage electric water heater also suffers large standby losses, and that is simply not true, as discussed above (new storage electric tanks routinely achieve EF in the 0.90 - 0.94 range)

  36. GBA Editor
    Martin Holladay | | #37

    Response to Curt Kinder
    Thanks for catching my error; I have corrected my mistake. The point I was leading up to, however, is true: there are far more tankless gas heaters than tankless electric heaters, so if you are studying tankless heaters, it certainly makes sense to focus on natural gas models.

    I also agree with your other point: that electric-resistance tank-style heaters have much lower standby losses than gas tank-style heaters. Electric-resistance water heaters are often a sensible choice.

  37. gusfhb | | #38

    Of course at 15 cents a kw they can be blindingly expensive to operate, and with a very bad recovery rate you need a larger one than you would with a gas hell with it who needs hot water?

  38. Expert Member
    Dana Dorsett | | #39

    Tank heater + drainwater heat recovery heat exchanger =...
    ...a higher net efficiency than a condensing tankless with no drainwater heat exchanger, in almost every 4-person family that showers rather than tub-bathes. As the family size gets smaller there's a crossover- the standby loss of the tank remains the same, but the return from the drainwater heat exchanger becomes less.

    With a 4" x 48" or larger drainwater heat recovery heat exchanger and a ~30KBTU/hr burner on a tank heater the "endless shower" aspect of a tankless comes into play too, so like tankless, the extended showering capacity can peel quite a bit off (or even fully negate) any savings from the higher operating efficiency.

    At home I use a ~0.82EF tankless as a modulating space heating boiler (only heating-system water in the tankless), and a "reverse indirect" heating system buffer tank with an internal heat exchanger, for the hot water, and a drainwater heat exchanger pre-heats the cold water feed to the indirect and the shower. I have it set up the heating system to run at domestic hot water temp (~125F), so the standby loss on the indirect is less than it is on those kept at much higher temps. The flow & delta-T through the tankless on the turn-off point of the indirect's aquastat multiplies up to less than my whole house heat load at the outside design temp, but under a showering load the temp in the tank drops to about 115F, ( a bit lower in mid-winter) where output of the tankless up to about 45-50KBTU/hr, with the rest of the heat for the shower supplied by the drainwater heat exchanger.

    With all zones calling for heat it'll still deliver a ~105F shower forever, which is why I set the occupancy sensor on the bathroom lights to ~10minutes or my kid could be in there for HOURS. :-)

    It's probably more efficient in this application than in a straight-ahead domestic hot water use. With the buffer tank it can't short-cycle 50x/day on hand-washing cycles, and the minimum burn time is in excess of 5 minutes. Standby loss on the reverse-indirect is small compared to a tank heater, and the standby loss on the tankless is well below what it would be for a high-mass boiler, but the cycling and standby losses are still higher than a modulating condensing boiler with heat-purge. The electric power draw at idle is comparable to that of mod-con boilers too.

    It's not perfect, but it's not terrible either. (Beats what it replaced by a good margin, anyway.) I could probably save ~8-10% replacing it with a condensing unit, but I can reduce the fuel use more by spending the money on more thermal retrofits to the building envelope instead. (If a ~1-2kw grid-tied cogenerator ever became available I might consider a bit o' re-configuring of the system- it would be pretty straightforward to integrate something like that in.)

  39. jj1 | | #40

    Low Tech Solution
    Hi Martin: I was able to cut the net fuel consumption of my hot water heater by almost half for shower and faucet aerator usage, by swapping out the old 2.5 GPM showerheads for new Niagara Earth 1.25 GPM non-aerated showerheads (and 1.0 and 0.5 GPM faucet aerators). Neither home residents nor guests can discern any noticeable reduction of shower efficacy/experience. Rather than expend $2K to $5K for a new tankless installed cost, the new showerheads cost less than $10 each delivered. The life of my existing storage hot water heater should be significantly extended, since tank life is affected by the volume of new cold water (containing dissolved oxygen) drawn into the storage tank. BTW website offers the new Niagara Bi-Max showerhead (both 1.0 and 1.5 GPM, user selectable) for $10.25 and the Niagara Tri-Max (user selectable at 0.5, 1.0 and 1.5 GPM) for $10.50. Low tech solutions sometimes can be both functional and cost effective.

  40. GBA Editor
    Martin Holladay | | #41

    Response to Jan Juran
    Thanks for your important reminder about the cost-effectiveness of simple conservation practices.

  41. 5C8rvfuWev | | #42

    In the spirit of conservation
    I still wonder if the storage losses of an electric dhw tank can be cut safely and effectively by adding extra insulation over the shell of the tank. Bad idea?

  42. GBA Editor
    Martin Holladay | | #43

    Response to Joe W.
    Modern water heaters have better insulation jackets than the water heaters of 20 years ago. In the old days, it made sense to install a water-heater blanket; these days, you'll see little savings. As a previous poster pointed out, most of the standby losses for an electric-resistance water heater occur at the fittings and pipes.

    That said, I see no harm in adding insulation if you want to. Make sure that your P&T relief valve is unobstructed and is accessible for testing, and make sure that the electrical access panel and thermostat adjustment controls are also accessible. Start by installing pipe insulation; then wrap the tank with insulation, cutting away the insulation as necessary to provide access where needed.

  43. Expert Member
    Dana Dorsett | | #44

    Insulate the pipes first, then the tank.
    Putting 5/8" wall (~R4, not the 3/8" wall stuff found at most box-stores) closed cell pipe insulation over all of the near-tank plumbing, including the cold feed and the temperature & pressure outflow pipe does more to reduce standby loss than tank-blanket over a newer electric tank heater. Adding it over all of the accessible distribution plumbing is also cost effective in higher priced electricity markets, less so in 5cent/kwh land, (but you'd still spend less time waiting for hot water if you do.)

    In an average home something like 15-20% of all hot water heating energy is abandoned in the distribution plumbing, mostly from short-draws where a gallon of water is pulled into distribution to serve a pint of 110F water at the tap for hand-washing, etc. Adding R4 to all distribution plumbing keeps the heated water in the distribution hot enough to be useful for about a half-hour, as opposed to less than 10 minutes for uninsulated pipes. See:

  44. watercop | | #45

    response to Keith Gustafson
    I agree that 15 cent Klicks makes for expensive hot water from any resistance heater, but if the alternative is trucked propane at $4 per gallon, then the electricity ain't so bad.

    Dual element electric tank heaters recover the top 1/3 of the tank fairly quickly.

  45. user-1006269 | | #46

    Tanks or no tanks
    I get this question a lot. I tell people that if they want unlimited hot water and want to pay for that, then a tankless makes some sense.
    If they want to limit their teenagers or anyone else from spending too much time in the shower, they should install an electric hot water heater (for a small household) and consider a heat pump water heater.
    I like the Geyser heat pump water heater since it is made here in Maine and it can be swapped from one tank to another.
    The build quality is more industrial than consumer quality.
    Recovery time is an issue and it needs to be in a reasonable sized basement.

  46. VauJKV4XTQ | | #47

    high cost of tankless HW system
    Why isn't someone asking about the high cost of the units? The same units sell for almost half the cost in Australia ... not more expensive in the US because of some lobbyist slapping on high tariffs, etc?
    And why the high cost of installations? I had mine installed for a fraction of what is quoted in the article ... makes me think there are some contractors who just charge more because they think they can. In Australia I actually installed my own ... it's not rocket science ... actually quite simple in new construction.

  47. HARLEYRDS2 | | #48

    I totally disagree – 180 degree’s out
    I totally disagree – 180 degree’s out
    I have a Bosch 125BS tankless (LPG) waterheater used with a closed loop solar hot water system
    (2- 4’x8’ solar water panels, a sunwise controller, circulation pump and 100 gal storage tank)
    Water coming out of the solar storage tank goes into the Tankless waterheater, if it is hot the tankless does not come on. It only comes on to bring the water up to temp (125 degs F).
    This system has been in use for 6 years and works great, It paid for itself in 5 years of savings, over a propane fuel, tank waterheater of 40 gals.
    We are getting 80 to 90 percent of our hot water free from the sun, and some of the new Hotwater Solar collectors are more efficient and can be used in the northern areas. We live in Sothern California.
    And LPG is a hotter fuel than NAT so you will use less.

  48. RBean | | #49

    $49 gets you access to ASHRAE 2011 Combo Research
    ASHRAE 2011 Annual Conference, Seminar 4-1 -- High Efficiency Space and Water Heating: The Combination Approach presenters: Rosalyn Cochrane, Martin Thomas, Thomas Butcher, Ben Schoenbauer,

    Also good reading from Hoover, Schoenbauer and Kingston presented at ECW B4 2012 Conferences (working on making these available - stand by.)

    I've also listed and linked for access over 36 topic related documents at this page: on domestic water heaters Many of these research papers are current and currently free to the general public. Get em' while you can.

  49. FreedomSolar | | #50

    Heat Pump vs Tank vs solar
    I reached the same conclusion about 8 months ago and have been looking for better options. The latest Rainbow seems to be the Heat Pump water heater. Has anyone done a fact based study between a traditional tank and the heat pump heater based on actual usage in the Northern part of the country? Florida doesn't count. In Northern climates the heat pump will raise the heating cost of the house by extracting the heat you just paid to produce. Also verses Solar using real numbers, real usage with actual complete installation costs, not just main component wholesale price costs?

  50. scrumper | | #51

    using these things...
    Our tankless was installed by the previous owner. It looks as if the 40 gallon electric tank he had didn't service 3 adults and 2 pre-teens. But here's the bane.... The old tank was installed centrally in the house, with but a short run to all the faucets, whilst the tankless is in an unheated garage some 45' of additional run away. To get any hot water to the showers now means enough time to undress, clean teeth, and have a shave before hopping into the shower. That means all the 45' of pipe is going cold. If we've interrupted the flow, moving from one room to another, there's a cold surge right in the middle of the showering. On top of that, the missus often turns on the hot tap to wash dishes (no matter how often I tell her not to), finishing them before the hot water even reaches the faucet, ergo 4 litres of heated water go to waste. I suspect that, had we been part of the survey, our usage would have clinched the pro-electric tank vote. Would I go back to electric - yes, if I intend to stay in the house long enough to justify the installation. And no, if I want to sell.

  51. user-659915 | | #52

    Thanks, Peter.
    I wondered when someone was going to bring up the issue of service run differentials.

  52. GBA Editor
    Martin Holladay | | #53

    Response to Karl Henschel
    I have the same system at my house that you describe -- a two-collector solar thermal system with propane backup (a tankless water heater). All I can say is, that's a lot of very expensive equipment, and propane is an expensive fuel. I'd swap all of the equipment out for an electric heat-pump water heater in an instant if my house was on the grid.

  53. GBA Editor
    Martin Holladay | | #54

    Response to Jim Price
    Q. "Has anyone done a fact based study between a traditional tank and the heat pump heater based on actual usage in the Northern part of the country? Florida doesn't count."

    A. Yes. Look for my upcoming report on such a study, and an overview of heat-pump water heaters. It will be published tomorrow (Friday April 13, 2012).

  54. user-729621 | | #55

    I wish I had read all this first....
    I put in a gas fired tankless water heater and connect it to my 100 year old radiator system through a heat exchanger. It is complex, In winter I never know if I can take a shower or not because it is at capacity driving the rads, and when the shower works I can never get my daughter out of it. In retrospect it was a very big $ 7500 mistake.

  55. Expert Member
    Dana Dorsett | | #56

    Response to Lloyd Alter
    Lower the flow rate on the heating-loop side of the HX, lower the output temp, or both. Unless you have fully analyzed and tweaked the heating side to right-size the output to the actual design day heat load, it's far more likely than not that the heating-rate into the radiation is way too high. If you truly need high temp output at design condition (unlikely) you may want to consider cutting in an outdoor-reset pump/valve on the heating system side. The vast majority of hydronic heating systems are WAY over-designed for the actual heat loads, and both water temps & flow rates can be cut back considerably and still meet the load at the outdside design temperature.

  56. user-1120876 | | #57

    Study participant observations
    Our household was one of the study houses for this study and I have a few personal observations about the Navien 240A

    1) The study was done with an older model of the 240-A. This model did not have a programmable thermostat, thus the tiny stand-by tank was always on. After the study was done, I had the electrical board swapped out which allowed the unit to be programmed so the stand-by tank can be turned off if there are times when you know you will not be using hot water (like in the middle of the night, or when the family is at work or school). Unfortunately, this programming is still rudimentary, and does not have a way of programming different shut-off times for weekends. I ended up programming it to shut down at night, but I manually shut it off on days when there is no one home. Since the study is over I don't have the sensors to know how much impact this has.

    2) One advantage of the Navien is that it does not need a chimney for flue exhaust. My furnace also does not need a chimney, so it was possible to seal off the chimney, thus saving energy from this large leak. It would be possible to demolish the chimney to better seal this opening and recover the floor space it takes, but of course this is quite difficult to do, especially if one has vermiculite insulation in the attic.

    3) Another advantage of the unit is that flue exhaust runs through plastic pipe. These pipe are smaller and much less leaky and easier to seal around than the metal flues required by noncondensing units. One side note - the fiberglass window screen adjacent to the furnace and hot water heater exhaust is deteriorating. Is this just coincidence, or is the exhaust detrimental to fiberglass screens?

    4) Even though the unit is about where our old tank type water heater stood, it still seems to take longer to get hot water to fixtures. This has actually modified our use of hot water. It used to be that I would wash dishes when they were dirty. Now I also have to wait until someone has just taken a shower or a bath, so the lines are "primed". If, for some reason I do need to start from cold, I fill up a pitcher with water while waiting for the water to get hot. Of course there is only so much water the house plants need, so there is still water waste at times.

    5) Being part of the study, installation cost was not a factor for me, but I do worry about equipment replacement and maintenance costs more than I did with a tank type water heater. If I abandon my chimney am I locked into replacing the Navien with another Navien?

    6) Would I do this on my own? Well first, I would not even think of installing one of these units If I could not get the unit very close to the point of water use. There is too much water and time wasted waiting for the hot water to appear. I know one can add a recirculation line to reduce water waste, but at the expense of wasted heat.

    Second, I would be sure that the installer knew what they were doing. We had some real problems getting things to run properly in the beginning. But that's a story for another time.

    By the way, one of the authors of the study was Schoenbauer, not Schoenbrauer.

  57. GBA Editor
    Martin Holladay | | #58

    Response to Stephen Martinson
    Thanks very much for sharing your story; it's rare to get the perspective of a participant in a research study, and your observations are relevant and helpful.

    Your experience that it takes a little longer for hot water to reach the faucet after a tank-type water heater is replaced with a tankless water heater is common, and it's good for homeowners to be forewarned before making the leap to tankless.

    Finally, thanks very much for catching my typo; I have corrected the error. My apologies to Ben Shoenbauer.

  58. Expert Member
    KOHTA UENO | | #59

    Quick correction
    Hi Martin--nice writeup, as always. I'm probably pretty late to the party, but just a quick correction:

    The Navien CR-240 was in a category by itself. Equipped with a very poorly insulated 5-gallon buffer tank, this water heater proved to be an energy hog.

    It's actually their CR-240A model--the "A" differentiates those that have the mini-buffer tank, and those that do not. Also, it's a 0.5 gallon tank--as per the CEE study:

    The Navien CTWHs are noteworthy due to their low cost and the option of a small (0.5 gallon) buffer tank that eliminates some of the hot water delivery and performance issues.

    But I was looking at the CEE study, and was amazed at how dog-tastic their performance became with that micro-storage tank.

  59. GBA Editor
    Martin Holladay | | #60

    Response to Kohta Ueno
    Thanks very much for your corrections; I have edited the article to reflect the information you provided.

    Your sharp eyes are much appreciated. And yes, you're right -- it's amazing how a little buffer tank without much insulation can screw up the performance of a tankless water heater.

  60. Expert Member
    Dana Dorsett | | #61

    Response to by Stephen Martinson
    The flue-purge & ignition delay can pretty long on some models, which contributes to the time-to-tap of any electronic-ignition forced draft tankless. Some try to cure this with recirculation pumps, but that cuts into efficiency pretty dramatically.

    If maintenance or failure drives you to replacements, sealed-combustion tank-type water heaters are out there that are easily retrofitted to side vented situations (eg Vertex ), as well as many power-vented non-condensing models that can use PVC venting. You have options other than another Navien/other condensing tankless.

    FWIW: Condensing tanks like the Vertex or Polaris are easily adapted to space heating applications, and have purpose-built side ports designed in for space heating applications. But they have no isolating heat exchangers- the heating system water IS the potable water, unless an exterior heat exchanger is installed. For short-loop hydro-air systems using the potable water may not be an issue, but retrofitting to most hydronic heating systems would require isolating them (for a number of reasons.)

  61. YXeXWBqjE8 | | #62

    Solar with Tankless is the way to go.
    I agree with Karl Henschel. The best option where solar resources are high is a solar water heater with a storage tank to preheat the water. You need a fully modulating gas instantaneous heater to make this setup work right. In theory, the cost of the fuel will be very low, so propane or NG would not make a huge difference.

    Jason Szumlanski

  62. GBA Editor
    Martin Holladay | | #63

    Response to Jason Szumlanski
    The problem with your proposed system is not the fuel cost (although propane is very expensive right now); it's the cost of the equipment.

    A homeowner can expect to pay $6,000 to $10,000 for a solar thermal system, plus $1,200 to $3,400 for the tankless water heater. The economics don't pencil out, because the equipment falls apart before you can recoup enough energy savings to justify the very high investment.

  63. user-755514 | | #64

    Electric tankless heater
    Hi Martin
    What about electric tankless water heaters - Are they, when gas is not an option, a waste of money?

  64. wjrobinson | | #65

    Are Tankless Water Heaters a
    Are Tankless Water Heaters a Waste of Money?


    How about a million other ideas, like piping a hot spring to my house from Talula?


    So what to do?

    Buy the least expensive unit you can and love yourself for not spending an extra several thousand dollars just to save two twenty dollar bills in a year or so!

    Tankless and HPWHs are expensive GADGETS. Money grabbers they are. Listen folks, you can't SAVE money by SPENDING money even if every TV ad says you can.

    No soup for anyone who thinks spending money equals saving money!

    Enjoy the rest of your weekend kids... get outside and enjoy this big blue ball we are all playing upon.

  65. Tonyonthegrid | | #66

    savings calculation
    I may have overlooked it but I did not see the price of natural gas addressed. It has spiked as high as $13 or $14 dollars. I would expect this would effect the savings outcome exponentially.

  66. Cadabra | | #67

    Closed cell foam jacket is the key
    My 40 gallon Bradford-White LPG water heater is power vented and it has a 2" closed cell foam jacket to cut down stand by heat loss. I can't imagine living with an annoying tankless heater cycling from OFF to MAX every time I touch a hot water tap, let alone the cost and the low reliability.
    Put another tank in front of my BW with a solar pre-heater, and it's a combination that is very hard to beat from an economical basis as well as use and maintenance. This configuration would still be cheaper than the tankless set up, a lot more user friendly, and a 'set it and forget it' set up with low to non-existent maintenance.

  67. Cadabra | | #68

    Convection return loop - Brilliant innovation
    Being the son of a plumber, it was easy for me to avoid the long wait (and wasted cold water) with my heater being almost 50 feet away from the kitchen taps. A simple convection loop was the brilliant solution. Simply ran a 3/4" PEX line from bottom of the tank after I added a nipple and a tee between the tank and the drain spigot. Ran the PEX line to the existing supply just below the kitchen sink, and VIOLA! .......instant hot water. I'll bet there isn't a pint of water run down the drain before 150 degrees is pouring from the faucet. Stand-by heat loss is nil in the PEX. The natural convection cycle requires no pump (and no electricity), is zero maintenance, and is dead-on user wonderful (not just friendly).
    Can't do this with a tankless..........another drawback for them. When you factor in the cost of the cold water saved while waiting for hot, it's a no-brainer.

  68. eUv66f38EU | | #69

    Tankless Water Heaters Need a tank
    I made the mistake of installing 2 tank less water heaters. I needed a new gas line and meter. Then I discovered that I also needed a tank. Based on an article in Fine Home Building, I added a Tank. I also added a tempering valve. DO NOT use the Watts valve, it is not safe. You also need a expansion tank. I also needed circulation since the runs are long. I was able to do all the work myself. I do like the unlimited supply of hot water, but the cost are high.

  69. user-755514 | | #70

    Are electric tankless heating systems a waste of money
    Looks like I may have no soup - Spending money equals saving money. 40 years ago when fuel oil prices were something like 25 cents per gallon, I replace my old (coal converted to fuel oil) boiler with one those very expensive GADGETS being promoted at the time. A multi fuel boiler. At 25 cents per gallon for fuel oil, I realized a 20 percent return on the investment cost for the new boiler. Today I am looking at adding another one of those expensive GADGETS. An electric tank less water heating system. The tank less system would be an alternative to heating about 100 gallons of water in the boiler by either oil or electric. Gas is not available. Can I get a better then a 20 percent return on investment cost by installing an electric tank less system? I installed a tank less domestic hot water system about 3 years ago. I realized a 16 percent savings on electric use. I believe this translates to a greater then 20 percent return on investment. Will I be able to continue to have my soup by installing an electric tank less system for space heating?

  70. 3igK9RJpwV | | #71

    Payback comparison
    I am late to the party. This discussion is very insightfull. I have one question and a comment.
    Q. In the installed cost of the tank vs. tankless WH, is the payback the difference between the average unit type or something else? It appears in the chart above that the whole avarage install price of the tankless unit is used ($3000) instead of the differnce between types, i.e. $3000 - $1100 = $1900 since at least some type of unit is needed.
    Comment: Your point of spending financial resources for proven energy savings whether it is improved water heating, insulating/ air sealing against building heat loss or more efficient HVAC systems etc. vs. investing in technology that has questionable savings is somewhat lost in the overall discussion.

  71. houptee | | #72

    Tankless Hydronic Heating systems
    I installed 3 Takagi TK-JR Nat Gas tankless water heaters to heat 3 separate apartments in my multi family home in NJ. They are connected to the original cast iron radiators. Before I installed the tankless units I replumbed the entire system using 1/2" hydronic oxygen barrier pex tubing in a home run configuration with a supply and return manifold with ball valves. This setup lets me turn off each radiator independently in case of a leak so I can still have heat to the other rads. I called Takagi before I installed this system becasue I was concerned about the cast iron rads causing problems. They told me to put some type of filters in the system to protect the heaters. I found hi-temp clear filters that have a ball valve at the bottom and self clean with a venturi effect when opened. I check them every month and blast them into a bucket to clean the screens which you can see thru the clear plastic housing which is nice. They each have a Taco 007 circulator tied into a relay that the t-stat activates. When the pump starts the flow triggers the Takagis to ignite. I have had good luck so far and it has been 3 heating seasons. The Takagi TK jr is available online from many vendors for around $600. The venting will cost another $150 if you go out the wall with elbow and wall thimble and hood, it requires all stainless. If anyone wants to see a photo of the system let me know. I did run all new 1 1/4" gas pipes from the meters to meet the demand for 2 units per pipe.
    I use a separate TK-jr for each apartment for the domestic hot water so I have 6 total installed.

  72. CanAmSteve | | #73

    Is lost standby heat wasted?
    I think we should consider that the "waste" heat from a standing HW tank may in fact be captured within the building and useful. Obviously some HW heaters are in poor locations (garages, unheated basements) but in many cases, the "waste" heat warms the house. In the Northeast, that's not wasted for at least half the year.

    Many people today have cottages or condos as second homes. In that usage, the payback on many energy-efficient products is infinity (or beyond :-) I installed a 60 gal. electric HW heater myself at our cottage. It cost me $300. It runs about three months a year, and is simply switched on and off upon arrival/departure.

    I think point-of-use heaters make sense when "mains" gas is available, and where the technology is common and accepted. This makes running costs low and brings installation and maintenance costs down to realistic levels. I have seen systems in developing countries mounted directly over a wash-up sink, where the unit is basically a pressure sensor, a pilot light and a burner aimed at what looked to be a small car radiator. Turn on the tap, the burner fired up and heated the water on the way through. Slower = hotter. I don't think it will get a UL sticker, though.

  73. watercop | | #74

    Response to John Knox
    Electric Tankless water heaters have some advantages. They can be installed very close to point of use without the gas line and venting hassles of gas tankless. That makes for quick hot water and less wasted water. However their Energy Factor is only a hundredth or two higher than a electric tank heater, and they are sensitive to hard water.

    We install them in new construction, sometimes feeding them with warm water stored in a heat recovery tank connected to a refrigerant desuperheater.

    The major issue for most retrofit situations is their prodigious electric service needed - up to three 60 Amp duplex circuits. Most existing household electric service panels lack anywhere near that much spare capacity. Contrast that with the 30 amp service ( actual draw about 19 amps) of a typical 4500 wat electric tank heater.

    One has to be realistic and careful about the required GPM and temperature rise needed - do the math and be sure the heater and electrical service can handle the load.

  74. user-755514 | | #75

    Response to Curt Kinder
    Thanks for the feedback. In regard to hard water sensitivity, I find that both the tank and tankless systems (both gas and electric) have the same sensitivity to hard water. Apparently, hard water is not considered a problem with the hot water tank systems but is a problem with the electric tankless system. For the electric tankless system, I find that Aqua Pure AP430SS Scale Inhibition system is recommended as a requirement and a Stainless Steel sediment, rust, hot water filter is recommended as an option. The installation of the scale inhibition system as a retrofit is another major issue maybe more so then the prodigious electric service needed especially if one is installing multiple point of use electric tankless heaters. Also, I find a warning not to use pre-heated supply water comes with the electric point of use tankless hot water heater.

  75. user-755514 | | #76

    Question for Brian Tober
    Question about your tankless hydronic system. In addition to the sediment filters, did you install scale inhibition filters and surge tanks?

  76. GBA Editor
    Martin Holladay | | #77

    Response to John Knox
    Q. "What about electric tankless water heaters - Are they, when gas is not an option, a waste of money?"

    A. No; this type of heater often makes sense. However, be prepared to upgrade your electric service, because electric tankless water heaters draw very high levels of current (something the electric utilities don't like, especially when everybody in the neighborhood takes a shower at 7:00 a.m.).

    For more information on the pluses and minuses of electric tankless water heaters, see All About Water Heaters.

  77. GBA Editor
    Martin Holladay | | #78

    Response to Terry Goodrich
    You wrote, "A simple convection loop was the brilliant solution. ... Stand-by heat loss is nil in the PEX."

    I have no idea why you think that a PEX convection loop has zero standby losses. In fact, the PEX tubing filled with hot water will lose lots of heat. That's why PEX tubing is used for hydronic space heating!

    Even if your PEX tubing is insulated, the energy lost through this covection loop adds up to a lot of BTUs and a lot of money -- all for the convenience of "instant hot water."

  78. GBA Editor
    Martin Holladay | | #79

    Response to Ed Horner
    I agree with you that you can get different payback results depending on your assumptions of the incremental cost under consideration. Since the Minnesota researchers discuss ranges rather than discrete costs, the payback calculations are subject to criticism.

    However, the researchers did a good job of data collection, and explained the basis for their payback calculations. If anyone wants to use a different incremental cost for the equipment, or a different fuel cost, it is a simple matter to determine your own payback period.

    In some areas of the country, the cost to install a tankless water heater may be lower, and fuel costs may be higher, than in Minnesota. These two factors will result in a shorter payback period.

  79. op7ww2xX9m | | #80

    Bosch 125ng in 110 year old house
    I installed a Bosch 125NG (standing pilot) in my 110 year old house. I can't estimate the savings over the traditional tank it replaced because two other people moved into the house about the time I installed it, but I wonder about the installation costs from the studies that were quoted. If I had paid full retail for everything, the total would have less than $850. Figuring out if the thimble in the chimney was big enough for both the furnace and the water heater took longer than the actual installation. My actual costs for everything (because the heater was deeply discounted at HD) was $275. I don't know what a plumber would charge for installing this in my house, but it would have to be way less than $2000. A 40 gallon traditional tank heater at that time would have been $600. I guess sometimes you just get lucky.

  80. houptee | | #81

    Response to John Knox
    Yes I installed expansion tanks on each closed loop heating system with pressure guages and temp guages also. The pressure relief valve must be 30psi max also for a closed loop setup. For the filters I only have the sediment filters which are pretty good size and the heaters have built in inlet filter screens also. Not sure what you mean by a scale inhibition filter, if you can send me a link on where I can find one that would be great. The filters I use are

  81. user-755514 | | #82

    Response to Brian Tober
    Here is the link for the scale inhibition filter:
    I have been using the AP430SS scale inhibition filter on the cold water inlet for my point of use and whole house electric tankless hot water heaters. I have been using this filter now for over three years and have seen no decrease or change in the output temperature or efficiency of the heaters. I am currently considering installing this filter as part of a closed loop heating system similar to your system but using an electric tankless heater.and copper pipe.

  82. user-1127834 | | #83

    AirHTP HW and 10 year Gas lows (like 1982-mid'90s
    Air HW HT p have come and gone and are back
    GT HW heating units with coils of cu in a 40-gal tank lasted over 30 years, usually 17+ years with 1 ton -1.3 ton compressors, even r12, better r22, 1981-
    Many posts cover a few GE Whirpool AirTrap, and others have commented "don't like a dip of rfg in DomHW systems"...
    Quick REM: How dangerous would it be to see a film of oil on tap water , POE-oil, and get notice to your lips and tounge that you are more oily? What is a manufacturers views on liabilities? -as well?

    Any hoo
    top of post showed a 4400 kwh/annually? at least what I am looking at. I get 110,ooo KWH for 40 gal/daily x 300 days... or 1100 to 1800 doallars in electricity.
    GT DeSuperheaters of various sizes to full condensing-100%, all as hybrids to HVAC-GT, can be found in several systems today using series-flow refrigeration off the compressor hot line, full heat-reclaim, also known as heat-recovery WHILE in Cooling, simultaeously, understood by most I read at GBA -
    ... MORE than Can be W:W unit separately, and just in place of a little hybrid desuperheater, a full 100% On-Demand coil for dedicated HW
    a single HVAC-HW-Reclaim unit with Priority HW HVAC-GT, is another patented name (patents up in the late 90's). SAVINGS have been over 50-percent greater than desuperheaters on GT for comparing to installed extras @ $1100 more, a same 2-4 year roi with MUCH more $$$ in 10 years saved. Just ask if I went out of a point, but this has worked well since 1996 installing a first in my area. DOUBLE Priority is excellent for radiant and instant HW. Air HtP TANKS can be fowled at the HX coil just as any PriorityGT or Desuperheater without and getting to vinegar cleanings, just as MANY instant HW tankless require vinegar flushes (not all claim so).

  83. EfHT9jHcmY | | #84

    Missed a couple significant points
    On the tankless water heater article, they overlooked two things:
    On a minor point, tankless heaters are less likely to mail in a manner that causes a major flood in your house. The potential cost avoided in such a case, though not definite, could be significant by anyone's standard.

    And one major point: The life span of a tankless heater can be expected to double of triple that of a tank-style heater. This point alone places them on relatively equivalent footing, even without all the other benefits.

  84. wjrobinson | | #85

    JP, you have me thinking of
    JP, you have me thinking of the NASCAR superheater, its got a 500 HP superblower, yaa if got pedal to the copper I tell yaa, no patent, goes to fast to boil a rabbit, but if yaa git your ears on its a loud one like those coyotes out breathen the night air and maybe scared of the wolves but that may be off topic or not if yaa like ta hunt critters...

  85. Cadabra | | #86

    Response to Martin Holladay, GBA Advisor
    Martin - Do the research. Stand-by heat loss of PEX to ambient air is indeed insignificant. Your comment re. PEX used for heating ignores the intimate contact PEX must have with a solid conductor to effectively transfer its heat. Ambient air is actually a pretty good insulator around PEX. Also, you must realize that the added PEX run is only one way; there is already a supply, so you don't need to count a second leg.
    Nonetheless, the calculations when properly done, will show that paying for many gallons of waste water down the drain while waiting for hot to flow many times every day, is easily a net cost and water savings. In the area where I live, the sewer bill is calc'ed based on water use; another savings. And why dump potable water into the sewer, when a waste like that is not necessary?

    I realize that it probably rankles a GBA Advisor who is a tankless heater bigot to admit it, but sometimes a simple solution like a return convection loop, is not only elegant and "user wonderful", it makes good economic and environmental sense.

  86. GBA Editor
    Martin Holladay | | #87

    Response to Terry Goodrich
    I am not a tankless heater bigot. I have one in my own house.

    If the air in your home is cooler than the water in your PEX hot water line, then the temperature of the water will eventually equalize with the air temperature. In other words, heat will flow from the hot water to the air until they are at the same temperature. That's physics.

    I certainly agree that a hot-water circulation loop can save energy and water. The best systems use a pump that is controlled by a switch located in the remote bathroom -- rather than running continuously.

  87. daveW123 | | #88

    Tax Credits?
    How come nothing is mentioned about the 30% tax credit? I used this tax credit as well as rebate from my gas company when I installed my tankless. The IRS allows the material and labor to qualify for the tax credit. My incremental cost was significantly less. And you don't have to resize your gas line - you can have the gas company increase the gas pressure. What makes the condensing tankless nice, from an installation standpoint, is the very low temperature from the exhaust allows simple PVC pipe exhaust systems with zero clearance to combustibles.

  88. GBA Editor
    Martin Holladay | | #89

    Response to Dave Williams
    The Federal tax credit for water heaters was good while it lasted, but (to the best of my knowledge) it expired at the end of 2010.

    The only remaining tax credits for homeowners are those for ground-source heat pumps, residential wind turbines, PV systems, and fuel cells.

    For more information, see Deciphering the Tax Credits and Federal Tax Credits for Consumer Energy Efficiency.

  89. jimianderson | | #90

    The Difference
    Its not true that installing tankless water heater is waste of money. Last month replaced my old water heater with the electric one and now observing that its saving energy of upto 60% and thus saving 25% of monthly energy bill than before.

  90. GBA Editor
    Martin Holladay | | #91

    Response to Jimi Anderson
    The research project discussed in this blog found average energy savings of 37%. Your comments are unclear, so I don't know what your savings are. If you are saving 25% on your fuel costs for hot water, that's a little less than average. If you are saving 60% on your fuel costs for hot water, then your household is at the very high end of the savings range. Families that use a lot of hot water tend to save more than families who use only an average amount of hot water.

    Of course, to determine whether your choice of a water heater makes sense from an economic perspective, the total savings have to be compared to the incremental cost of the equipment (the higher installation cost of a tankless water heater compared to a tank-type water heater).

  91. RickMc | | #92

    Like my new tankless
    You really have to remember the rebate offered if you consider a tankless. They aren't worth it if you have to buy it outright, but nearly every locality offers some incentive. My gas company and Masssave offered an $800 rebate so this brought my cost down by 25 to 30%. You also have to consider that the tankless systems mostly are warranteed 15 years, versus 8 to 10 for your tanks. Also, my old heater was orphaned, and that can be bad. In fact, it isn't even code in many states. Also consider the price of gas and oil never seems to go down, so using less is always good. If you consider all these things, and you plan on staying in your house, and particularly if, like me, you have two kids and are constantly running your dishwasher and laundry and have four people taking showers, then they pay back before what is mentioned here. But you need the rebate. MA Save will pay up to 2K of a job that betters your energy consuption as well, so you can really cut the cost a lot.

    And like the article says, endless hot water. It never runs out, and does not run hot and cold as I have seen some reports suggest. Constant, steady hot water, even while running the dishwasher, laundry and shower all at once. It is smaller too, and off the floor, so also useful to consider if you get water in hte basement.

  92. homommy | | #93

    Not Marey!!
    I did quite a bit of research before settling on the tankless heater that I bought. During my research, I tried to contact Marey. You should too. Try calling. No one EVER answers the phone. So I always left messages. No one EVER returned my call. So, if that happens before the sale, what kind of service do you think you'll get after the sale? Anyway, I ended up with Chronomite from this store: . Try calling Chronomite HQ for presales or tech support. Instant answers. Also, Chronomite is made in USA. I hope that helps.

  93. Girlbird63 | | #94

    Ease of Install
    I too believe that the payback isn't what you think it will be. However, you skipped one very important upside. Hot water tank heaters are huge and require venting to the outside or roof (in my city, at least). The new models of tankless hot water heaters are the size of a backpack, and the outdoor venting models require no venting. You just slap it on the side of the house and go.

    This was a real gift for us, because during our remodel, we gained a closet and lost a very ugly vent on the outside.

    The other upside is that they make a casing that slips right in the middle of studs, so you can install the out-door model flush with the outside wall. Killah. And that's even more awesome, because it looks terrific.

    Finally, let's throw away these charts showing that one thing costs a dollar three eighty less than or more than something else. You can get tile at Home Depot for 99 cents per square foot, but you don't. You want nicer tile. You can get a perfectly good stove that works for $600. But you don't. You buy a high end one for joy of use, and for resale value. You can drive a Ford Festiva but you don't. You want comfort, safety, and a good looking ride.

    Tankless hot water heaters make me happy. Period. You never run out of hot water, you get to go 20 years between units (usually) and if you're buying a house with one, you're going to go Ooooooh that means this is a good house, honey, let's buy it.

    So. Anyway. Aesthetics count, that's all. Quality counts. Knowing that something is just better, counts. And Tankless hot water heaters are just plain better than the old invention. Pretty simple.

  94. GBA Editor
    Martin Holladay | | #95

    Response to Robin Whiteside
    There are two sides to the "ease of install" question. For new construction in a hot climate, it's pretty simple (as you point out) to slap a tankless water heater on the outside of your wall. If you live in a cold climate, though, that's not a reasonable option.

    If it's time to replace a failing tank-style heater in an existing house with a tankless heater, it is far simpler (and much cheaper) to install another tank-style heater than to install a tankless heater.

    As I pointed out in the article, the tankless water heater usually requires a different method of venting — for example, double-walled vent pipe through a side wall — and that means getting out a big hole saw and running new double-wall vent pipe. You'll usually need to upgrade the diameter of your gas supply line, you'll need to reconfigure the water piping, and in some cases you'll need to call an electrician to put in a new 120-volt electrical receptacle. That's expensive.

  95. whitbred | | #96

    Cost of running tankless water heater
    We switched from well insulated electric 30 gallon water heater (we never ran out of water for 2 people) to a Rheem tankless powered by propane (we do not have access to natural gas). Electric bill down $30 per month, negligble increase in propane cost; we also have propane furnace. Water heater is installed outside of the house to gain space in small utility room, PNW location. Yes, it was expensive, ($3800) but the additional space gain for storage is great. It takes about 40 seconds to get hot water, about the same as from the tank. Temperature is set at 120 degrees. Have had it almost two years and are totally happy with it. I would spend the money again. Another poster spoke of cleaning the tank/piping with vinegar -- that's not in our maintenace information.

  96. lipton80218 | | #97

    Built in anti scalding
    One thing people don't think about is the anti scalding feature on a tankless unit. By this I mean, if you have a remote to control the unit, then you can set it for 100. If you need to run the laundry or dish washer you can temporally turn it up. Most modern showers have anti scalding, but bath room sinks don't. We have 2 small children and we love this "hidden feature" There is an article at on this hidden feature.

  97. oliverAUSTX | | #98

    First off, great site and great insightful posts. I am also thinking about a tankless and after reading the majority of posts here and other articles, it probably comes down to space savings for me. If I needed a new gas line, meter, etc., I would drop the thought of a tankless. One of the concerns about amortization is the the fact that these equations usually assume you stay in your house for 15-20 years to reap the benefits of a tankless. SO, in other words, in a tankless installation, it seems that the majority of your expense is front loaded (cost of the unit and installation) and the benefit shows year after year, versus the tank heater not having a significant upfront cost, but higher operating expenses. So, if you are not planning to spend the next 15 years in your home, the tankless equation may not work in your favor.

  98. KeithH | | #99

    Don't forget the remodel benefits
    This has been mentioned by others but I'll mention it as well. In our previous house, we replaced the old dead furnace with a 95% sealed combustion/exhaust unit. That eliminated the use of one side of the typical Y exhaust pipe. When we remodeled the kitchen, the exhaust pipe was either going to be a trimmed column in the middle of the island or the water heater had to move. We moved the water heater to the garage, including building out an insulated closet and installing new exhaust in the garage ceiling. In hindsight, we should have installed a tankless water heater in the crawlspace. The ROI on the labor to move the water heater and build out the closet was pretty much zero. What's my point? In remodel scenarios where energy efficiency is at all the concern of the owner, the water heater might be the last thing on the vertical exhaust stack.

  99. laureld | | #100

    Bunk! Tankless is WAY Better
    The thing all these articles miss about the debate is a HUGE ISSUE which is this. You never ever ever run out of hot water with a tankless hot water heater. That difference alone is worth paying gobs more money, and it's not really gobs more. It's just a little. Running out of hot water is one of the most awful feelings you can have, and it's always at a disastrous time. You can not underestimate the value of this.

    Another issue these articles skip over is the tax rebate. Local utilities almost always kick in several hundred bucks rebate, and that counts for a lot.

    And another issue. Often when you are using hot water, it's water that's been sitting in a tank for goodness knows how long. It isn't very fresh water. So if you are cleaning, or bathing, ew.

    You also don't mention that the prices of these units have gone down a lot, and a good model is usually no more than $500-700. So... For new construction, these should be required by law. The fuel savings are worth it for the environment. For remodels, the tax benefit, peace of mind, and fab fact of never running out of hot water--totally makes it worth it.


    Oh! And I am adding this later... I just remembered (how on earth did I forget!!) a hot water failure I had about 20 years ago. The thing flooded the garage and basement unit. Every family photograph I had was ruined. The mold smell took years to go away. And my puppy drowned. That's right, I said Puppy. It was horrific. And the most frustrating part was that this unit, an AO Scott unit that was four years old, had the overflow plumbing installed perfectly, yet it still failed.

    Sorry to mention the puppy.

  100. cstand | | #101

    Installation costs
    I am not sure where/how those installation costs came from - I would love to see the bill rate of the folks who charged $3500 for a condensing tankless heater and what kind of car/truck they drive.

    At my house - a 2x10 CCA board mounted to edge of basement wall, 6 foot extra gas line, 6 foot extra cold water feed, 6 foot extra hot water feed - both water lines were 3/4 PEX, 6 inch exterior hole with special vent. Electric line uses the same outlet as the sump pump.
    Maybe a total of $300 in "parts" but other than the CCA - which would have been a leak pan when I had a natural gas water heater the costs are identical.

    I can not imagine how the external penetration for air feed and exhaust flow could be more expensive then running an exhaust vent through a 2 story house for a "traditional" hot water heater and providing a separate combustion air feed for hot water tank. I have a 96% furnace with no attic/roof penetration.

    There are 3 females in my house, we do laundry on weekends, bathe in the morning, run dishwasher in the morning after breakfast and prior nights dishes. Having a big tank of hot water sit idle for 23 hours a day is stupid.

    I did not replace my tanked water heater with a tankless entirely to save money - I did it to replace a failing unit and to use less. The "use less" was half of the incentive. According to the attached study a 37% reduction in use was typical. My house will be around for 100+ years. A 37% reduction in use of ANYTHING is an admirable goal.

    I do think the ideal setup is a tankless with on-demands at sinks.

  101. GBA Editor
    Martin Holladay | | #102

    Response to Jesse Jacobson
    In fact, water heater warranties are all over the map. Rinnai tankless water heaters have a 5-year warranty for parts, except for the heat exchanger, which has a 10-year warranty.

    Marathon tank-style water heaters are warranted not to leak for as long as you own your home; other parts have a 6-year warranty.

    It's impossible to generalize about water heater longevity. I have seen no convincing evidence that tankless water heaters last longer than tank-style water heaters.

  102. JesseJacobson | | #103

    Tankless Last Longer
    A point that the author didn't bring up much is that tankless water heaters can last up to twice as long as a conventional gas or electric water heater (and solar for that matter) and many of the manufacturer's warranties are longer for a tankless brand, which ends up saving money. For example, many tankless water heaters can come with a 15 year warranty (source: warranty info). Where as a traditional water heater is half that. If you consider that a conventional water heater last around 7 years before needing replacement, and a tankless 16 years respectively, then that becomes a great source of savings. Not to mention that you'll be disposing less water heaters, which is good just good sustainability overall.

  103. JesseJacobson | | #104

    Good Point Martin
    Warranties are different depending on the brand, but I do tend to see higher warranties for tankless vs tank across different models. However, a well maintained gas or electric tank water heater can last a long time. My last one was 14 years old before I needed to replace it (I did flush the tank semiannually and change the anode rode when it became overly corroded as well as preformed other maintenance). I can't seem to find a definitive study on the longevity of a tankless vs a tank water heater except that Energy Star seems to say the same here:
    Though, to be fair, I don't know where they are getting their information from.

  104. nerobo | | #105

    Not a waste of money
    I installed a Marey unit in my house. It was stupid easy to install and I could pick the unit up with two fingers. Marey heaters cost less than a traditional water heater and my gas usage went down significantly. So my payback was instantaneous just like the water heating. I've installed them in rental properties and the last thing I want are calls from dissatisfied tenants. One complaint with these things, there's a fairly high pressure drop through the heat exchanger so you'll notice a drop in flow when someone opens a hot water fixture elsewhere. Otherwise, very satisfied.

  105. ipatrol | | #106

    Something's not clicking here
    A point that no one seems to have brought up is that tankless units have been the standard in Europe for YEARS, long before the 2005-2008 energy crunch that generated increased interest in energy-saving devices. Europe has traditionally had higher energy prices than North America due to a relative lack of domestic fossil fuels. Now the present recession has depressed energy prices worldwide, any savings from efficency become significantly smaller. However, once industry gears back up and consumption rises again, energy prices are almost certain to return to and even exceed their previous record.

    Another issue with the study, is that it was conducted in a relatively small geographic area. Western Europe is generally warmer than other places at the same latitude due to the Gulf Stream (hence the big difference in weather between London and Moscow, which aren't very far apart latitudewise). Minnesota is quite a bit colder than most of the US, to the point that the Twin Cities are frequently colder than some parts of Alaska. If the efficency is sensitive to the feedwater temp, then chilly MN would be the low end of the savings range.

    Ultimately, I'd suggest that each homeowner should do a case-by-case calculation of the expected return on investment. If the high upfront cost is a barrier to an otherwise profitable decision, consider tapping home equity to finance it, with the savings covering the interest (again, run the numbers to make sure this is the case, otherwise if you sell the house, you may find it difficult to get a buyer willing to pay the extra cost to close out the loan).

  106. GBA Editor
    Martin Holladay | | #107

    Response to Robert Montrose
    You are correct that this article (like most GBA articles) was written from the perspective of residents of North America. European readers of GBA should seek local advice; where tankless water heaters are the norm, as they are in most of Europe, it makes sense to choose the type of equipment that can be purchased and serviced locally.

    You are also correct that energy prices have dropped significantly since this article was written. Dropping energy prices reinforce my argument rather than undermining it. As energy prices drop, the argument in favor of tank-type water heaters instead of tankless water heaters is strengthened.

  107. gatorsplbg | | #108

    Tankless water heaters
    It has been brought to the plumbing trade that tankless water heaters also have to be flushed out once a year from a technician with a liquid solution so the coil does not get clogged inside. But they don't know right now of what will that solution do to the coils. So in the long run the use of a traditional water heater tank is the best choice. That is all I install.

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