Are Tankless Water Heaters Worth Your Money?

Are Tankless Water Heaters Worth Your Money-

Should You Go Tankless?

Tankless water heaters are an increasingly popular trend. As the name implies, these appliances don’t have a tank, where hot water is stored until it is called for at a sink or shower or washing machine. Instead, when a hot water faucet is turned on, either a gas burner or an  electric element  heats water instantly and sends it in a continuous stream until the tap is turned off.

As we explain in the Science of Tankless Water Heaters, the water is not going to be instantly hot when the faucet is first opened. That’s because some cold water is going to be in the line before the heated water travels from the heater through the pipes to the faucet.  However, the lag time is substantially reduced compared to a traditional water heater and only the amount of water necessary is heated. Once the faucet is closed, the flow of water stops and the unit ceases to heat water.

Such an on-demand water heating system is advertised as more energy efficient, and thus less expensive to operate. 

But is it really? 

You might be skeptical whether claims of energy efficiency and potential savings outweigh the costs of buying and installing a tankless water heater. You might also wonder whether water is really going to be as hot and as available as it is from a traditional water heater with a tank. 

The answer is, it depends. There are a number of factors to consider. 

If you are a homeowner wondering if tankless water heaters worth it, let’s take a close look at:

    • What are the actual savings of tankless water heaters
    • How long do tankless water heaters last
    • What are the best applications for tankless water heaters
    • What is your best resource to evaluate whether a tankless water heater is good for your family and regular hot water usage

Tankless Water Heater Savings

Traditional water heaters with tanks waste energy through what is called “standby heat loss.” The tank contains water that is heated to a desired temperature, waiting in standby mode until  it is called for. However, over time as water sits in the tank unused, it loses heat. Because of this standby heat loss, energy is expended to return the water to the desired heated temperature.

Tankless water heaters avoid this energy waste because they only heat water on demand, only as you need it. This can result in an every savings of up to 25 percent compared with its tank counterpart.

How Long Do Tankless Water Heaters Last?

Tankless water systems have an expected lifetime of up to 20 years, compared to the 10 to 13 years of a traditional tank water heater. How much that matter to you depends of course on how long you expect to live in your current home. For those in a starter home or who frequently move due to work or lifestyle choices, this isn’t much of a consideration. For those in their “forever home,” the extended life cycle of tankless water heaters could be a factor.

But potential longevity is just one factor in considering whether tankless heaters are worth it.

When is a Tankless Water Heater a Good Investment

If energy conservation is a primary concern, you should look into a tankless water heater. According to Energy Saver, homes that use 41 gallons or less of hot water daily can achieve 24 to 34 percent more energy efficiency with tankless compared to conventional storage tank water heaters. Even for homes that use a lot of hot water, as much as 85 gallons per day, tankless water heaters are still 8 to 14 percent more energy efficient than tank water heaters. 

If you want to go to the added expense of installing a tankless water heater at each water outlet, you can achieve even greater energy savings, anywhere between 27 to 30 percent. 

The question becomes, is that added expense worth it when taking into account considerations other than energy efficiency?  Because tankless water heaters do, on average, cost more than tankless water heaters. According to Kompareit, the average residential tankless water heater usually costs anywhere from $800 to $1,500. Installation is also more expensive than a tank model because it is a more complex system. Installation costs vary, so get a quote from a professional plumber for whatever model you might be interested in. 

The payback on that initial investment depends in part on how fast you can expect to recover those extra costs. Over time, utility bill savings from reduced energy usage adds up. Again, this goes back to how long do you expect to stay in your house.

Another consideration is whether or not you need a new water heater. If your current tank water heater is nearing the end of its life expectancy, then this is something you might want to start thinking about. If you have a leak around the tank, or water doesn’t seem as hot as it used to be, it might be something you need to think about sooner rather than later. If your gas water heater flame is yellow or orange, we have some tips for you.

If you have a perfectly good tank water heater but you are aiming at better energy efficiency, a tankless water heater is a good choice. But it is only a good choice if you are willing to pay the added upfront costs, not to mention replacing an appliance that doesn’t need replacement. 

Gas vs Electric

Another consideration is whether to go with an electric or gas tankless water heater. Basically, that depends on what utilities are available. If you don’t have gas, then that’s out, unless you want to install a propane tank (and the added expense of obtaining one and filling it).

If you have the luxury of choice, then there are two other main considerations. The first is how many are there in your household and how much hot water do they typically consume daily? Generally speaking, gas is the better choice for large households with larger water demands. It’s also more energy-efficient than electric. 

If your ground temperature is relatively warm, 70˚F, or so, then electric is a fine choice as you don’t need to expend a lot of energy to heat water to a hotter temperature of  105˚F typical for most users. Electric is also a good choice for small households and if you have a limited budget. On the whole, electric tankless water heaters cost less than gas tankless water heaters.

Other Cost Considerations

There may be other unexpected costs beyond unit price and installation. If you choose an electric system, or you have to choose an electric system because it is the only available utility, investigate whether your existing electrical system can actually accommodate a tankless water heater. Otherwise, you may have to rewire an incompatible electrical system.

The reason why is that while tankless heaters save money by only heating water on demand  when that water is needed, the system works harder to heat it, requiring more electricity. If your existing electrical system is not properly equipped to handle the necessary flow of additional electrical energy, rewiring may be required. 

While this is a relatively rare occurrence, it is still a possibility, particularly if you have an older home. How do you find out for sure?  Because the differing energy needs of tankless water heaters could pose a risk to safety if not adequately addressed, most jurisdictions in the Bay Area require that you have an inspection and receive a permit before you can make the switch to tankless. There are some nominal costs to get an inspection and a permit. Consult a plumbing professional to best guide you through this process.

Your Best Resource to Determine Whether Tankless Water Heaters are Worth It to You

Just how much you could save by installing a tankless water heater and whether is worth your money depends on a number factors:

    • Where you live
    • Your hot water usage
    • Which model you choose to install
    • Whether you need to make any significant changes to your house’s infrastructure

By the way, we’re not knocking traditional water heaters that rely on tanks. Sure, it’s an old technology, but it’s an old technology that still works and could be a good choice in certain situations, particularly an economic one. As we at Benjamin Franklin always point out, water heaters are far from a one-size-fits-all. You have to consider your personal needs, the size of your household and your expectations for the future.

At Benjamin Franklin Plumbing Bay Area, we’re here to support you every step of the way, from exploring your options to installing a new water heating system when you need to upgrade your home. If you’re thinking of getting a water heater, tankless of otherwise, contact us and talk to one of our plumbing and water heating experts.