Tankless Water Heaters 101

A tankless water heater on a wall.

Tankless water heaters have been used throughout Europe and Asia for many years and are a convenience fitting for the traditional smaller spaces in those countries. In recent years, however, there has been a large increase in demand throughout North America as well.

What's a Tankless Hot Water System?

A tankless hot water heater is an on-demand system that is activated when the tap is turned on. Rather than maintaining heated water in a large tank with traditional water heaters, the tankless water system mounts to the wall and is considerably smaller.

In contrast to heated water that sits in a traditional tank, a tankless water heater initiates only when the pressure from the water moves through the unit. The heating device is made up of a series of coils that heat the water as it moves through. The result for a homeowner is a win-win—they can get rid of that big storage tank in the basement or garage, and they can also save on energy for heating water since they are only heating water when they use it.

Tankless systems are available in electric, propane, or natural gas fueled models. You can install one central system or use a separate unit for each area. The central units are more common and only take up a small space, not much larger than the household circuit box. However, you can also choose units to install beneath each sink to provide hot water to each bathroom and kitchen.

Pros of Tankless Water Heaters

Someone turning on a tankless water heater.

Cost-saving estimates range from 10-70% and while that is a huge range, everyone agrees that tankless water heaters will save you money. A conservative estimate is $100 or more per year for the typical family. The cost savings come from the reduction in fuels and energy required to maintain the temperature of the water in a traditional tank. These systems aim to keep the water at a precise temperature, but as it naturally cools and the heat escapes out of the side of the tank, the system kicks on to warm it up again. With an on-demand system, you will use significantly less gas or electricity to only heat the water when you require it.

Another advantage already mentioned is the smaller size of tankless systems. In addition, because they do not store water, the risk of serious water damage to your home from a leaking water tank is significantly reduced.

Also, if you select the right system, the chances of running out of hot water are very slim. Keep in mind, however, that you are still paying for each drop of water you heat so long showers will cost you more money.

Some state and federal refunds or credits may also be available if you install a tankless water system in your home.

One final advantage of not storing water is that the tank is less susceptible to rust. Therefore, the tankless system is said to last about five to eight years longer than the traditional system.

Cons of Tankless Water Heaters

The primary con to a tankless water system is the initial cost. Under-the-sink units start at around $200 each and a central unit starts around $1,000, while a traditional water heater costs about $500. You may also incur additional costs with required system upgrades if you are switching from a traditional water heater to a tankless one. This means that you’ll want to factor in how long you expect to be in your home and what you already pay in gas or electricity to calculate your savings and return on investment.

How to Install a Tankless Water Heater

The first step in this process is to select a tankless water heater to meet your needs. You’ll want to calculate the demand that fits your requirements.

For example, a faucet typically uses .75 gpm, a showerhead about 1.0 to 2.0 gpm, and a washing machine or dishwasher about 2.0 gpm. So, if you want to be able to turn on a hot water faucet and run the washing machine at the same time, you will need a tankless system that has a flow rate of at least 2.75 gallons per minute. Also, evaluate the number of people in your home and be sure to account for multiple uses at the same time, such as two showers as well as the dishwasher, so that all your demands are met.

Begin the installation process by turning off all the electricity, water, and gas to the unit. Drain the water remaining in the tank. Then, disconnect the pipes and hoses and remove the old water heater. Next, install any new gas and water lines that are required for the new unit. Use flexible pipe where possible. You may need to solder piping. Build a frame onto the wall and mount the tankless water heater to it rather than mounting it directly to the wall. Attach the water and gas lines to the new unit. Lastly, you will need to install the vent, which requires cutting through the side of the house and applying silicone to prevent leaks once the venting is in place. Turn the gas, electricity, and water back on. You may need to bleed gas lines.

Safety Precautions

As with any gas appliance, take precautions to ensure that your gas tankless water heater does not have a carbon monoxide leak and receives regular maintenance. Also take care when installing your unit as electrical work always carries potential dangers.