Do Tankless Water Heaters Live up to the Hype?

Courtesy of  NRECA’s Cooperative Research Network  

Unlike a traditional water heater, a wall-mounted tankless model does not store hot water. It heats water only as it is used with heating elements inside the water heater that are activated when a hot water faucet or valve is opened. Consumers can generally save more energy costs by using traditional water heaters (with a tank) efficiently. Source: NRECA


An unlimited supply of hot water definitely sounds like a sweet deal to many homeowners. So do reduced water heating costs, instantaneous hot water on demand, and more space in the utility closet. 

These are all promises made by companies selling tankless water heaters. But does the technology really deliver? 

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. 

 ‘Unlimited’ Hot Water? 

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. 

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. 


Hidden Costs 

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. 

For example, a traditional tank water heater with 4,500-watt elements operates on #10 wire and a 30-amp circuit breaker. One whole-house tankless model boasts four 7,000-watt elements for a total electrical load of 28,000 watts. This requires wire and a circuit breaker that will handle at least 120 amps. 

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. 

The extra load also necessitates a larger and more expensive meter loop and main breaker panel for the house. In some cases, consumers also must pay for new wiring between the distribution transformer and electric meter. Check with a licensed electrician and your local electric co-op to determine if you must improve your electric service connections to support a tankless water heater. 

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. 


Other Options 

Consumers looking for an efficient water heater should consider a heavily insulated electric resistance unit. These appliances are often the most cost-effective option over the long term. And because of their hot water storage capabilities, many electric co-ops employ electric resistance water heaters as a key component of load management programs that shave power costs during times of peak demand―a proven way to help keep electric bills affordable. 

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. 

NRECA’s Cooperative Research Network monitors, evaluates, and applies technologies that help electric cooperatives control costs, increase productivity, and enhance service to their consumers.

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