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Unlike traditional electric resistance or gas-fired water heaters, tankless models do not store hot water?they heat water only as it’s consumed. One or a series of heating elements within a tankless water heater are activated when a hot water faucet or valve is opened. The unit heats water until the faucet or valve gets closed.

 

An unlimited supply of hot water sounds great, but generally doesn’t make for responsible water use, particularly in areas of the country suffering from drought or chronic water shortages. Moreover, even the largest whole-house unit may not supply enough hot water for simultaneous, multiple uses.

 

The important information to understand is a tankless unit for a residential home has a flow rate of about 4gpm at the outlet and will only raise the water temperature around 45-50 degrees. Depending whether you are on public utility water with a 60 degrees inlet temperature or a private well at 50-55 degrees inlet temperature will decide if you get 95 degree water or 120 degree water at the faucet. For example, such a unit may be able to supply only two showers simultaneously or perhaps one shower, a dishwasher, and a sink. If users demand too much water, temperatures will drop. As a result, a tankless system probably won’t meet the needs of a large family.

 

In addition, water temperature depends on the volume coming out of a faucet. If you turn on the faucet only a trickle, water runs cold. If you open the faucet further, you will trigger hot water—the hottest possible. If you open the faucet to maximum, the temperature will drop back a bit. If you open more than one faucet, temperatures will drop even more.

Generally, tankless water heaters do not require a lot of space (a large unit can fit in an area no larger than 24 inches square, and extend from the wall about 8 to 10 inches). But they do require an upgrade in electrical service?something most home improvement stores often don’t mention and a chief reason electric co-ops generally don’t recommend the appliances. This means consumers who want to replace an existing conventional water heater with a tankless unit or add one as part of a home-remodeling project will incur additional costs.

 

An electric tankless whole house water heater, in most cases, must have three 40 amp breakers to operate, one for each element. This 120 amp set up causes a home owner to increase the house power panel from a standard 200 amp service entrance to a 400 amp. The wire size recommended for a standard whole house electric tankless water heater is #8 copper. The cost for #8-2 copper wire is around $.86 per foot. With three 40 amp breakers it will cost approximately $2.58 per foot to wire all three breakers.

 

Let’s take a look at the cost for a normal installation of a tankless unit. A tankless unit $700, breakers $24, wire $103, upgrade to 400-amp panel $605 for a total without labor to install is $1432. A standard 50 gallon water heater cost $400, breaker $8, drain pan $20, insulation blanket $20, timer $50 for a total without installation cost of $498.

 

Comparing an installation of a standard tanked water heater versus an electric tankless it would cost on average $934 more to install a tankless unit. According to many retail plumbing stores and energy experts, there are no savings for a standard family of four, and in most cases the energy use increases as well as volume of water. In cases where the energy use actually drops is when a smaller 2 element unit is used in an apartment by a single occupant or in a retirement situation with only two occupants with very limited use.    

 

If a tankless water heater is installed in an existing home without upgrading the electrical service, low voltage or sudden voltage drops are likely. This will cause dimming lights, blinking lights, and other problems.

 

 

While gas-fired tankless water heaters generally do not need basic service upgrades, the same considerations must be made when determining how many hot water faucets will be turned on at any given time and how far away the tankless heater remains from sinks and showers.

Consumers looking for an efficient water heater should consider a heavily insulated electric resistance unit or high efficiency heat pump water heater.   Solar water heating is also a viable option.

 

To reduce home water heating costs, the Oak Ridge National Laboratory suggests simple and inexpensive measures such as tank insulation, temperature setback, timers, heat traps, and low-flow showerheads. All of these are more practical and provide a greater return on investment than putting in a tankless water heater.