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The article in question recommends installing electric on demand water heaters in new and remodeled construction. The idea behind this recommendation is that the traditional “always on” water heaters waste energy and actually cost more to operate over time. I think the reality is not quite so simple.

I am glad the author only recommended these on demand water heaters for new and remodeled construction, and not simply replacing existing water heaters. I believe that for almost all remodels and indeed, much new construction, the price/benefit calculation does not yet work. If you live in an area like we do, that uses natural gas for almost all residential hot water heaters, the electric on demand heaters may actually cost you more than having your natural gas heater on all the time. In addition, the on demand water heaters are many times the purchase price of a traditional water heater. In a typical home, you will probably also need more than one of the on demand heaters to fill the same need as your single 30, 50, or 100 gallon traditional water heater. I have not yet seen one that I think could handle even a load of laundry and a shower at the same time. In a remodel, changing over to the on demand water heaters also requires additional electrical wiring.

If you live in an area where water heaters are typically run on electricity, it may be a bit easier to pencil out the cost in such a way so that over time you will save money. If you building or remodeling small home that could be served adequately by a single on demand water heater and you feel good about the saved energy, then by all means go for it! If you are looking at it only to see if you can break even or save money over the next few years, I don’t think the technology is there yet. I have asked a plumber acquaintance of mine and he agrees and generally does not recommend on demand heaters except in specific circumstances.

All this having been said, and said by me, normally a proponent of new technology and energy saving technology…. stay tuned. There are newer and more efficient on demand water heaters coming on the market all the time. In addition to the electrical models, some run on natural gas or propane. Also, some experts predict that the price of natural gas will not continue to be as much below the cost of electricity in years to come. Some time in the future we all may have on demand water heaters in our house. A single heater may even be powerful enough to run an entire home the way a traditional tank water heater does now. Except for some specific circumstance, I don’t believe the technology and price are there just yet.