Excerpt from my regular column in the Santa Barbara News-Press.
Question: The water heater in our Goleta home is at least 15 years old and just this last weekend I noticed that it has sprung a small leak and water is collecting in the round pan that it stands on. My wife and I have read about how much less energy a tankless water heater uses versus the old tank style of water heater that we now have. Our home is a typical California Ranch style home that was built in the 1960’s with 4 bedrooms and 2 bathrooms. Can you give us some information on the pros and cons of installing a tankless water heater in our home?
Your Handyman: There has been much written in the past few years about the energy efficiency of tankless water heaters, however things often are not as simple as advertised and you are wise to do your homework before making a purchase. The two basic types of residential water heaters used most commonly in the United States can be classified as storage and tankless. The storage water heater is usually an insulated metal tank holding anywhere from 5 to 120 gallons of water, a typical residential tank is 40-50 gallons, and is heated by either a gas burner or an electrical heating element. Cold water enters the tank at the bottom, hot water is drawn off the top and the “first hour” rating of the tank tells how much hot water can be provided in an hour. A storage water heater is constantly losing some heat through the walls of the tank even though it is insulated and a gas burning water heater loses heat additionally via the vertical flue that runs up the tank that heats the water when the burner is on. This loss of heat is referred to as “standby heat loss” and is the primary reason that tankless water heaters were developed. Since tankless heaters heat water on demand there aren’t any standby losses, however there is heat loss through the hot water supply pipes which increases with the distance the hot water has to flow to get to the point of use, which is the case also for the storage tank heater.
In new construction, tankless water heaters are often installed at the “point of use” at a bathroom or kitchen, especially smaller tankless units in the bathrooms and break-rooms in office buildings, but in an older home they are usually installed in a central location much the same as the storage water heater. Along with energy efficiency a big selling point for the tankless units is that they never run out of water if the right sized unit is installed for the number of bathrooms in your home. Another plus is that the size of the tankless heater is considerably smaller than the storage tank unit freeing up room for other uses, and it can be mounted onto the exterior wall of your house or garage provided it is away from doors and windows if it is a gas unit so to avoid carbon monoxide venting into the home. Depending on which report you read, tankless water heaters are credited with energy savings of from 22% to 36% when compared to a properly sized storage heater in the same home.
So far so good, however before you pick up the phone and start calling plumbers to schedule the installation of your new tankless water heater, there are a few very important negative considerations that somehow are not so prominently explained in the manufacturer’s advertisements:
Purchase & Installation Costs: The tankless unit is considerably more expensive to purchase and to install than the storage unit. According to Consumer Reports, tankless model purchase costs range from $800 to $1,150 plus about $1,200 for installation, compared to $300 – $480 for storage tank heaters plus $300 for installation. These upfront cost differences in many cases pencil out to a 20-40 year payback period for the tankless heaters. In the past there were tax rebates for tankless water heaters which have expired that effectively reduced the purchase price, but my opinion is that these rebates in the big picture hurt us more than help since the rebates are paid for with more borrowed money by our hopelessly in debt federal government.
Utility Service: The heating elements in both the gas and electric storage tank units are relatively small and usually do not require a very large flow of gas or electricity to keep your home flush with hot water. The burners in most gas storage tank water heaters range from 30,000 to 50,000 Btu (British Thermal Units) per hour which is not that much bigger than a large burner on your gas stove, and the gas supply can be adequately provided with a 1/2” diameter gas pipe. A gas fired whole-house tankless unit sized for the typical Santa Barbara or Goleta home will have a gas burner producing as much as 180,000 Btu/hour and the largest units may have burners working at over 300,000 Btu/hour, and a ¾” gas supply line will be required which can be an expensive consideration if a new gas line needs to be plumbed. If the gas supply line is undersized, the burner will be starved for fuel, it will not operate efficiently, and other gas burning appliances in the home may also be affected. A larger electric tank less unit surprisingly may draw as much as 116 amps at 240 volts which is another important concern as the basic tract style home typically will have 200 total amps of electrical service, and any additional wiring and circuit breakers will be expensive.
Maintenance: The heating element in a tankless unit is a sophisticated copper heat exchanger that can be quickly damaged by the extremely hard water in Santa Barbara. In many cases the manufacturer warranty on the heat exchanger is voided if your home does not have a water softener and often a particle or scale filter is required in addition to the softener. Many tankless units require that the heat exchanger be periodically flushed with a vinegar solution to remove scale and freezing may also be a concern if the unit is installed on an exterior wall. In many cases this type of maintenance is more than the typical homeowner is able or willing to do and a service call from a plumber is needed or the maintenance is just ignored.
Flow Rates: All tankless water heaters have a minimum flow or activation rate that must be reached before the unit will turn on and start heating water. In some units the minimum flow rate is as high as 0.5 or 0.6 gallons per minute which may be significantly more than a person will use when washing hands, brushing their teeth or shaving. What this means is that in some situations you will need to use more water than you have used in the past in order for the tankless heater to start heating water. I have seen many installations where a 5 gallon electric tank water heater with a hot water recirculation pump is installed in tandem with the tank less heater(s) so that hot water is available for hand washing and such. It would seem that this type of duel installation might create a net energy use increase for the home.
So it may be that after taking a careful look at all the considerations, a tankless water heater is not the best option for your home, and avoid the temptation to save money by purchasing a tankless unit that is undersized for your home’s hot water needs. Santa Barbara has many excellent plumbing contractors who can help you with this analysis and be sure to completely read the manufacturer’s specifications, maintenance requirements and warranty before making a purchase.
Owner, YourHandyman & Construction
CA License #935259