Yank The Tank: Whole House Tankless Water Heaters Save You Money
Photo: Whole house tankless water heater
Tankless Water Heaters
If you are in the market to replace a failing (or soon to be failing) water heater, the options are plentiful. In fact, options have significantly expanded in the past 10 years. Options for residential and commercial owners to yank the tank in favor of a more efficient way of delivering hot water are everywhere these days.
Is your water heater failing? 10 Signs It’s Time To Call A Water Heater Service Professional
Years ago there were concerns that the technology hadn’t quite caught up to the need for multiple concurrent hot water users, but this is no longer the case.
The one thing that hasn’t changed, however, is the expense. Tank or no tank, buying and having a new water heater installed by a professional is not cheap — especially if you’re moving from a tank system to a tankless system.
But, losing the tank and moving to a more efficient water heater will save you significant money over the life of the new device.
Traditional Water Heater Tanks Are Expensive and Inefficient
Photo: Bulky and inefficient traditional tank water heater
Nearly everyone is familiar with the huge traditional tank water heater. To maintain the need for hot water on demand, traditional tank systems reheat water throughout the day to keep hot water at a consistent temperature. Not only is this process inefficient and expensive, but it’s also a waste of energy.
Whole House Tankless Water Heater: How It Works
Photo: Interior of the tankless water heater
When a hot water tap is activated, the cold water runs into the home and through the tankless water heater unit. At the same time a heated (usually copper) exchanger coil in the unit is activated, passing significant heat through to the water and warming it to its preset temperature level. Once the water is appropriately warmed, it’s pushed out through the interior pipes to the requesting appliance.
Meeting Demand
Assuming the home’s energy source is working properly (electricity, natural gas or propane) a tankless water heater can provide an endless amount of hot water for the home.
Average flow for a tankless heater can be around 2 to 9 gallons per minute (GPM), but with 11 gallon units becoming more common, there are many reasonably priced options for homes and businesses requiring the larger capacity.
Unlike traditional tank systems which are limited to a certain amount of hot water storage, the tankless system’s heating coil is also limited in size, constraining the amount of water that can pass through the coil.
If you have a large family or frequently use more than one hot water appliance at a time, it is possible to have large, simultaneous draws of hot water with a tankless heater. If the demand is significant, consider two whole home tankless heaters.
Whole House Tankless Vs Traditional Tank
Pros
• Cost savings and energy conservation
• >41 gallons per day - 24%–34% more energy efficient vs. traditional tanks
• >86 gallons a day - 8%–14% more energy efficient vs. traditional tanks
• Lifespan - 20 years for most vs. 10-13 years for a traditional tank
• Faster Hot Water Delivery - Rooms that are further from the central water heater receive hot water faster
• Unlimited Hot Water Supply - There's almost a limitless supply of hot water with a tankless system. The system's flow rate determines how much, but whatever rate that is can be produced indefinitely.
• Smaller In Size - Less physical space is used up by a tankless heater. The systems can be mounted just about anywhere inside the home, as long as that location is accessible for servicing.
• Less Risk For Water Damage - Without a tank holding significant amounts of water at all times, the risk of water damage with a tankless system is greatly reduced.
• Temperature Regulation - Reduced risk from sudden temperature spikes due to how precisely tankless heaters regulate water temperature
Cons
• Initial Cost - The startup costs for tankless systems are high, in some cases two to four times as much for the initial equipment and installation. If a homeowner is replacing a traditional tank water heater, much of the cost is in retrofitting.
• Intermittent Delays - There can be some start-up delay and intermittent use issues with tankless systems since they heat on demand. While not an issue for continuous-use applications (e.g., washing machine, dishwasher), it can be an issue with water that is turned off and then back on (e.g., a shower or faucet).
• Energy Source Limitations - Tankless systems are restricted to using electric, propane, natural gas, and even geothermal as energy sources.
• Water Pressure Requirements - The output rate (amount of hot water per minute) in a home relies heavily on the water pressure delivered to the building.
Whole House Tankless Water Heaters: Comparison By Fuel Choice
| Electric | Gas | |
|---|---|---|
| Price | $600-$1200+ | $700-$2000+ |
| Installation Cost (Varies By Location) | $1500-$3000 | $2000-$5000 More expensive due to the venting and work required for setup |
| Flow Rate (Gallons Per Minute) | 6.5-9.4 - Most Popular | 6.5-9.4 - Most Popular - Heats faster than electric |
| Venting | No Venting Required | Venting Required |
Looking for an alternative to a traditional tank water heater, but still not convinced a tankless water heater alone is right for your home? Here are two other options to consider.
Point of Use Water Heater PLUS A Whole House Tankless Water Heater
Photo: Point of use water heater master shower
Point of use water heaters are essentially small, tankless water heaters developed specifically to create hot water for one appliance or device in the home. While not the primary water heater in the house, point of use water heaters are mounted at the “point of use” to allow for quick heating and delivery of hot water on demand to a single appliance.
Utilizing one or more point of use water heaters for the most heavily used home appliances while also depending on a new tankless system for the rest of the home, helps lighten the load on the tankless water heater during high usage times.
Cost: See above AND add $200-$500+ per point of use system
Hybrid Water Heater System
Photo: Rheem’s Hybrid Electric Water Heater
The hybrid water heater system, or heat pump water system, uses coil technology as its main component to heat.
Assuming you reside in a region with relatively warm temperatures year-round, the heat pump’s evaporator coil absorbs heat from the warm outside air. HVAC contractors and plumbers who are familiar with the technology will tell you that it’s similar to the way a refrigerator works, but in reverse - pulling in hot air to heat the water while exhausting the cool air back outside.
The heat pump is the lead source of heat paired with a gas furnace, serving as back-up. The heat pump resides outside and the gas furnace inside.
The heat pump is the lead function until the outdoor temperature reaches a predetermined threshold; once that threshold temperature is reached, the system automatically switches the heat source to the gas furnace.
Since the hybrid system is able to utilize preexisting energy to power itself, it’s still a more efficient option than a standard tank system, and an interesting alternative to a tankless water heating system.
The hybrid system’s tank will fill during periods of high usage, or colder days when there is less warm outdoor air, providing larger households with the additional hot water they need during high demand periods.
As an example, Rheem’s hybrid electric models are some of the best available to residential and some commercial clients.
Ask an HVAC professional if you live in an area that might make sense for a hybrid water heater.
Cost: $500-$2200+ depending on size of the system and tank
Rebates
Photo: Federal and state rebates mean more money for you
All types of water heaters can qualify for federal tax rebates if specific energy efficient criteria are met. The rebates offered can be through the federal government (usually around $300) and/or state government (e.g, New Jersey offers approximately $300 rebate) Each state may have its own program, so be sure to check around.
Most rebates require efficiency qualifiers, which are based on the tankless water heater’s UEF, or Uniform Energy Factor. UEF refers to the level of efficiency when run under standardized conditions for a 24-hour period. All new tankless water heaters receive a UEF, which is now standard for all residential and many commercial water heaters
Here’s an example rebate criterion from the state of New Jersey for 2020 [for a rebate worth $___ for a new tankless water heater]:
55 gallons (storage capacity) & UEF 0.64, or greater; or
>55 gallons (storage capacity) & UEF 0.85, or greater.
But, there’s a catch. The rebate can generally only be redeemed for a tankless water heater in a primary residence. The IRS will not offer the refund to a rental, secondary home, or vacation home.
Energy Choice: Electric vs. Gas
The source of energy powering the heater can affect the cost and efficiency of the water heater.
ELECTRIC
Electric tankless whole house water heaters are much less expensive than their gas counterparts, in some cases by nearly half. They also benefit from being less complicated and less expensive to install.
Electric units are also smaller and have no need for ventilation due to the lack of combustible gas, which means they can be installed in hidden spaces (like utility closets.)
GAS
If the home is hooked up for gas, installation may be more expensive. And the more complex the system, the higher the installation cost.
Condensing Unit
Condensing gas units expel gasses around 300 degrees, and require special materials for the venting to prevent corroding. Condensing units are more efficient than non-condensing units since they create energy at a higher temperature, keeping more of the heat inside the mechanism.
These units are more expensive to purchase and install, but provide about 20% more energy and cost savings.
Non-Condensing Unit
Non-condensing gas units have efficiencies around 80%. About 20% of the heat escapes through ventilation of the warm condensation to the outside of the home.
Non-condensing units cost less upfront, but are also less efficient than condensing units since the 100 degree Fahrenheit gasses they expel are cooler than condensing units. Less expensive venting equipment is required since the temperature of the gas is much cooler.
Tip: Existing gas lines and venting ducts are rarely compatible in most homes with a new gas powered tankless water heaters, so the installation cost may be much higher overall regardless of the unit chosen.
Tip: Much like a stove, gas heats up faster than electric - getting hot water to opposite ends of the home faster.