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Business Advisor

How to Sell Green Upgrades: Tankless Water Heaters

Customers won’t buy one unless you explain the benefits to them

In a warm climate, the best place to install a tankless water heater is outdoors.

If you do not already include tankless water heaters as part of the signature features in your homes and remodels, you should at least understand why so many folks are in love with the benefits. The reasons just may surprise you — and hopefully motivate you to learn how to sell more of them and how to better satisfy your clients.

When I sell tankless water heaters, I do not sell them based on their perceived water efficiency or that they provide instant hot water. In fact those are myths that I usually have to dispel first before talking about their benefits.

I explain that hot water users will still have to wait for the hot water to travel from the water heater (tanked or tankless) to the location you want the hot water. No, they are not wireless, and the only way to get hot water immediately from the tap is either by moving the water heater (tank or tankless) closer to the tap or by installing a hot water circulation loop. Tankless water heaters instantly heat the water, but they do not instantly transport it.

Next I explain that users may actually end up using more water, not less, because tankless water heaters mean they will never run out of hot water. Thus their teenagers can take endless showers knowing they will never run out of hot water. That’s why the Rinnai website is www.foreverhotwater.com and not something else!

So if they are not so green, what about tankless water heaters makes them so attractive? First and foremost, if you live in a warm climate, you can install them unobtrusively outdoors. That means you can (a) more easily service the unit because the plumber does not have to come in the house to flush it, (b) you have no need for a vent stack, which saves money on the stack and labor to install it, (c) No stack means one less ugly roof penetration and thus one less place a roof can leak, (d) Exterior installation gives you the option of a hot water hose bib right outside the house, and (e) Exterior installation also frees up the closet it was located in for more storage, or it gets a ticking time bomb out of the attic which is where most tanked water heaters are stored in our region of the country.

But regardless of location, a tankless water heater makes sense when dedicated to the master bathroom. A tankless enables the user of an oversized 6-foot tub to actually fill and keep it filled with hot water. And when you install dueling shower heads in a new oversized shower, a tankless ensures the same.

The bottom line in bathrooms is that we have yet to remodel one in order to make it smaller — nobody ever asks for a smaller tub or shower! When you locate that tankless near the master bath, you can get very close to achieving instant hot water right when you turn on the tap. And the client can still keep the existing tanked water heater in the home if it is operating OK — adding a tankless and dedicating it to the master bath will actually extend the life of the existing tanked unit because it will get less use!

And finally, whether installed inside or out, stand-alone or in conjunction with a tanked water heater, tankless models simply resonate with homeowners because they understand the easiest concept to grasp of them all — when you are not using hot water, you aren’t using energy to heat it!

16 Comments

  1. Jim Holleman | | #1

    Tankless pros and cons
    Why would the tank heater last longer with less of a load? Most tank heaters rust out more due to time and (lack of) maintenance than load.
    Tankless seems to make the most sense for widely variable loads. Tank heaters waste more energy than tankless if rarely used, and will run out of hot water under heavy loads. Tankless heaters can easily handle both extremes. For consistent heating needs, the slightly higher efficiency of the tankless heater may be offset by higher maintenance costs, particularly for hard water.

  2. David Meiland | | #2

    Pros and cons indeed
    We have a Takagi TK1s as the only water heater in our house.

    The two best reasons for tankless IMO are space savings and endless hot water if you need it. In our case, I freed up a lot of floor space by getting rid of the tank we had. In rare cases the remote control is nice if you want scalding hot water at the tap, such as when making pasta.

    The downsides are the cost of the unit itself, the cost of venting if using Cat. III stainless (that was the usual when I installed ours), the cost of upsizing the gas lines if needed, the cold water slug when rinsing dishes, and the overall complexity of the units. The exhaust fan may be audible depending on where the unit is installed.

    I generally spec .94 or .95 EF electric tanks when the customer has the room, but we have cheap hydropower.

  3. User avater
    Michael Strong, LEED Associate, CGP | | #3

    PC Follow Up
    Appreciate the EF specs David and agree. You have to check and compare these rating betweeen units as well as the GPM availability. If you not are comfortable deciding what size unit or how many are needed or perhaps do not have confidence in your plumber to do the calculations then just call the mfr's rep. I have never found one that wasn't happy to look at a set of blueprints or to meet with the client if asked.

    Which reminds that you need to make sure your licensed plumber has been through the mfr's training for installation! This is very important as we had a licensed plumber incorrectly install some of ours back about 6 years when few plumbers wanted to touch them. It took some remedial education to get the resulting problems fixed and to make sure we did not make them again in the future.

    My comment about a tanked water heater lasting longer with less of a load-if a tanked, or tankless heater, are designed to heat "x" gallons of water over their lifetime they will last longer if they only heat half the volume of water than they otherwise would. A heater that heats 10 gallons of day will last longer than one that heats 30. 3 times as long? No idea. Too many vairiables to calculate but it will certainly have a longer lifespan working only part time.

  4. David Meiland | | #4

    Tank failure
    No doubt it varies regionally, but what I've seen out here is that they rust out and leak. It's pretty typical to get 15-20 years out of a standard gas or electric tank, but last year I took out one that was 6 years old and was getting the floor wet. My plumber thinks this is due to factory flaws in the tank lining that leave a tiny spot of steel exposed.

    We've put in a few Marathon tank heaters... all plastic, lifetime tank guarantee... but they're more than twice what a standard unit costs.

  5. User avater
    Michael Strong, LEED Associate, CGP | | #5

    Tank Failures Con't
    Rusting and leaking-wow, that stinks. Thanks for the word on Marathon. We have been installing them for about 6-7 years and have installed Rinaii, Bosh and Noritz but have to have a leak or any rusting (that I know of)! Regardless, local support from the manufacturer is a must.

  6. User avater
    James Morgan | | #6

    Bewildered.
    I have a hard time reconciling the title - how to sell green - with the content which explains quite handily how a tankless water heater is not about green at all but about convenience and consumption. With respect, isn't this the kind of spurious product tagging that gives the whole industry a bad name?

  7. Tom Gotschall | | #7

    Please Don't Be Bewildered
    Much of selling "Green" is showing how we can have efficiency along with the convenience or enhanced lifestyle. Green is mostly about "health" anyway.

    People are not likely to embrace pain.

    They may find pleasure in saving water and energy to have as good or better lifestyle though.

    And although we wince at the seemingly limitless supply of hot water as a way to abuse a good thing, rarely do I hear of people running out of hot water with the typical family 40 or 50 gallon water heater anyway. I'd say, at least anecdotal evidence suggests to me, that water "wasting" is not likely happening.

    So the tankless heater is therefore, going to be more energy efficient, with rare exception.

  8. User avater
    James Morgan | | #8

    Still not convinced.
    Tom: "So the tankless heater is therefore, going to be more energy efficient, with rare exception."

    I have yet to see definitive data to support this common assertion. Nor is energy efficiency in any sense the same as 'green'. Note the major selling points quoted above: being able to quickly fill an oversized tub; supporting multiple showerheads; having hot water bib outside the home. All ways to 'efficiently' INCREASE one's consumption of both energy and water.

    Major critical variables of the 'green or not decision' for a homeowner not even mentioned include:

    - the quality and performance of the alternative (tanked) options

    - the impact of poor water quality on burner coil durability

    - the source and environmental impact of the energy used for heating - hydro or coal electric? 'fracked' natural gas? propane?

    - opportunity cost - could the additional money be spent in better ways?

    There's nothing wrong with making an honest to goodness sales pitch for a genuinely green construction option. But this is not it. Just reread the paragraphs above starting "So if they are not so green, what about tankless water heaters makes them so attractive?"

  9. User avater
    Michael Strong, LEED Associate, CGP | | #9

    What's so green?
    Undoubtably your point is valid James which is why I tried to be up front at the start and why it is imperative to be up front with our clients. How green is a tankless anyway? For someone who travles a lot, like I do, they make a lot of sense. For a weekend/vacation home just as much. In some circumstances I am sure they are more efficient, in others I am sure they not. Regardless, the amount of efficiency (money saved) is likely not to be very large anyway. So let's not fool ourselves, when selling green and lets educate our clients so they learn a tankless is probably a lot less green than they thought.

  10. Tom Gotschall | | #10

    James Not Convinced
    Now you're getting into the deeper argument of what is "green". And it is a battle of ideas.
    And your points are good ones.

    My point on efficiency, while a broad one, simply points to the fact that most tankless water heaters will be more "energy efficient" than most tank water heaters. That said, I did not bring dollar opportunity into the equation (you did.)

    Many people look to the issues of the burning of fossil fuels (and the exhausts) and put that into the equation and don't mind if they spend more "dollars" to get there. It's a valid emotional issue.

    Poor water quality in Florida renders typical tank water heaters worn out in 7 - 10 years Builders I know there are finding tankless going longer than that with no signs of failure. I've not read of any tankless water heaters performing less time than a tank water heater (general studies). All indication is they'll (tankless) will last longer.

  11. User avater
    James Morgan | | #11

    Tankless discussions on GBA
    Tom, there have been several extensive discussions of tankless heaters' green claims on GBA in the last couple of years. The uncertain green cred of tankless units may be infererred by an email flyer from Taunton for one of these discussions titled "How to waste water more efficiently".

    I'm not going to recount all the arguments for and against - you can review them directly by typing 'tankless heaters' into the search box at top right - but one of the major arguments against them has been opportunity cost. My take on 'selling green' in my work as a home designer working with both new-build and renovation has been to educate my clients toward spreading their always-limited budget across a range of interventions that are going to produce the best environmental impact reduction for the buck. By this standard, except in rare instances tankless heaters never make the cut: that ~ $2K increase in cost will almost always be better spent on enclosure improvements like better wall, attic and crawl space insulation. Of course it helps to keep me honest that I have no financial interest in any of the choices my clients make. Plumbers and general contractors may find it harder to resist the siren call of increased sales from the tankless 'upgrade' - unfortunately I see many sales pitches for these units that skirt the downside and do nothing to disabuse purchasers of the common misapprehension that 'instant' heaters mean 'instant' hot water at the tap, for example. I commend Michael Strong for being very upfront in this article about the limited benefits, environmental and otherwise of these units - if the article was titled not 'how to sell green' but 'how to sell tankless water heaters' (answer - *honestly, and with full disclosure*) I would have no problem.

  12. Tom Gotschall | | #12

    Tankless discussions on GBA
    James,

    Honesty is certainly the best policy and you make great arguments.

    I thought you were going to go in the direction of what has happened in the tank water heater segment...more efficient tank water heaters. The competition is "heating up" and this has been exciting.

    On the issue of "wasting more water efficiently", the cost of the water -v- the energy savings...energy wins. Having said that, I readily tell clients that tankless wastes a couple more seconds of water each use. Folks in that category are often now going with on demand hot water circulators (again, for lifestyle and water savings) and for little expense,

    These decisions are about flexibility in lifestyle choices, your questions and other questions help to determine the ultimate answer.

  13. Aj Builder, Upstate NY Zone 6a | | #13

    There is nothing green about
    There is nothing green about water heaters any of them.

    The way to cut down costs and go more green is to use less fossil fueled hot water. It's a change in behavior that can only lead to greener hot water solutions when installing either tank or tankless water heaters.

    The next best way is to go solar and still limit water use.

    It boils down to personal choice, principles, actively being a green loving person with every use of water. Choosing to use cold water to wash clothes instead of needing clothes to be perfectly spot-free with Clorox and hot water. Rinsing dishes and pans while still easy to clean instead of after the food dries on and needs a much more intensive cleaning effort.

    Selling instant hot water heaters to the well off for master suites is "business."

    But not green principled business.

    If hot water was ten times more expensive, we all would make efforts to use it much more wisely.

    We need the price of fossil fueled hot water doubled via carbon taxes. Then changing hot water use patterns would start in less than a second.

  14. Brooks Camp | | #14

    A good argument for tankless - and a question
    One great reason to go tankless is if you have or plan to install a Solar Water Heating system. The issue comes down to timing. In a normal home, hot water usage happens in the morning and late afternoon. But if we use hot water in the morning, and have a storage style back-up system (water heater tank), which is common, then the backup system will immediately heat itself when it is refilled with cold municipal water. By the time the solar system warms up mid-morning, the water will already be hot, and we will be at work, not using any hot water. Then, later that afternoon when we take showers and make dinner, the sun is no longer offering its free energy at high enough levels to reheat the water, so our backup system takes the load again.

    There are two ways to counteract this:
    We can include a separate Solar Storage tank, which can be done easily if there is space, OR switch to tankless backup heat, which will never battle the Solar system because it only turns on when we use the hot water.

    One question I have is this: The key to combining tankless water heaters with Solar Water Heating, is variable intensity heating. If our Solar system heats the storage tank to 95F, we want our tankless heater to add only the Btus necessary to bring the water up to 120F.
    Which tankless heaters have this ability, and are they more expensive?

  15. User avater GBA Editor
    Martin Holladay | | #15

    Response to Brooks Camp
    Brooks,
    Here's one: Bosch 1600PS.

  16. Dave Williams | | #16

    here's my thinking on justifying a tankless water heater
    When doing return on investment type analysis of Green alternatives many of them don't make dollar sense when you consider TODAY's energy cost. I installed a natural gas tankless water heater last year - one of my major motivations was what is the projected increase in the cost of natural gas? Water heaters can last a long time. Natural gas is at historic price lows - due to new supplies like fracturing wells. But there is growing public backlash on fracturing - this could result in new regulations/restrictions which could limit new supplies and add to the cost of natural gas. Then I see the growing middle classes in China and India and China's emerging oil/gas companies - I read a report that China's Oil companies are aggressively bidding on new off shore oil/gas leases. And these emerging countries are seeing their per capita energy use rise. Sure there are new supplies coming on line, but I see much more pressure on conventional energy supplies which indicates more price increases. What happens when this global recession ends? - I think it is reasonable to expect energy demand to increase. I've seen numbers that the price of energy has increased at about a 7% yearly rate over 30 years or so. That means it roughly doubles in 10--11 years. My tankless water heater has a 15 warranty on the coil. So, I think it is safe to assume that that my utility bills for water heating should double during this water heaters lifetime. My last water heater lasted 18 years. Interest rates and opportunity cost? Do interest rates matter anymore? I expect them to be near 0 for a very long time - due to political pressures.

    I look at it this way. Say you are looking at 18MPG car - you think you can absorb the operating cost based on today's price of gasoline. And you have a gut feel for the yearly price increase of gas - but this 'feel' and your historical experience could be way wrong. What's to say in 3 years - you are paying 2x per gallon - and you're striving to keep the car for 7 years or so? Maybe it makes more sense to consider that higher MPG alternative now. I make the assumption that energy is going up in the long term - the exact slope is unknown but I see more and more factors indicating a steeper price curve than a shallow curve. So I hedge my bets and take a hard look at the Green solution. Sure, doing payback calculations on Green projects seems to always result in ridiculously long payouts. But based on what long term price increase of energy? And is our past experience with the cost of energy valid? There is no reason to panic and sound the alarm - but I see more factors indicating much higher prices. Where are the factors indicating much lower energy prices in the future?

    Anyway, that was my thinking on the 97% efficient tankless water heater I installed last fall - as a hedge against higher prices. Due to tax credits and rebates - I know I can economically justify the investment. I spend a few dollars heating water per month now, and I can't see justifying a solar pre-heater. I just don't use that much hot water. In this case, I agree with some of the other responses - better to spend my Green dollars on other projects.

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