Tankless Water Heaters Might Save Money and Energy


Approximately a year ago, I wrote why I thought tankless water heaters were not ready for prime time. I took some grief for not endorsing these energy saving appliances, but I just could not justify the large extra initial cost and long break even point. Although there are still questions in my mind, it might be time for another look. I also read that restaurants are big users of the tankless heaters because they need a constant, even, supply of hot water and don’t like dealing with the inefficiencies of traditional water heaters.

Several things have changed in the past couple of years that make the tankless water heaters an easier choice to make. There are now more models that run on natural gas or propane. Even though the price of natural gas has skyrocketed in the past few years, it is still usually a more cost effective choice than electric. The tankless heaters really do work as advertised. If the house is empty all weekend, they do not waste energy like traditional water heaters keeping a large tank of water hot and ready to go. When you turn on the faucet, they heat the water as it flows through. As long as the water is running, there will be hot water. Close the tap and the heater is off. This endless supply is a nice feature. I know in some homes, if the dishwasher and laundry just ran and you want a shower, you may have to wait for the heater to reheat the tank of water.

Although tankless water heaters are getting better all the time, they do have a rated flow capacity, so installing the correct size is important. You want one that can keep up with the demand if several appliances or people are drawing hot water at the same time. I have been told, but don’t know for sure myself, that the gas powered ones keep up better. Also, some of the larger capacity models won’t turn on if you run a faucet only at a trickle. I was told that most will come on at about a flow of 1/2 gallon per minute, which is actually a pretty low flow. Another advantage of the tankless heaters is that they are very small compared to traditional water heaters. They can be installed on the back wall of a closet and never be in the way. I would imagine the gas ones, at least would have to be on an external wall so the burned gas could be piped to the outside.

Initial expense is still an issue, with the tankless heaters still costing 2 to 4 times as much as a traditional water heater. Normally it takes about 3 – 4 years to break even and start saving money. Right now there are lots of rebates and tax credits available for the tankless heaters that can reduce the initial cost and make the break even point arrive even sooner.

So, are they “ready for prime time”? Maybe. I talked to a real estate agent who has two in his house. One supplies the kitchen, laundry and downstairs bathrooms. Another, smaller one, supplies only the master bathroom which is at the far end of the house and has a large, jetted bathtub. If I was remodeling or building a new house, I would definitely install one instead of a traditional water heater. On the other hand, if the water heater in our current house went out tomorrow, I would probably replace it with the same type rather than go through the retrofitting expense of installing a tankless water heater.

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Will Sig
1 Ana

I purchased one years ago and I enjoyed it so much I actually started a company selling them. The titan don’t have the temperature variation problems that other units have and they are protected from dry-starts. They are very compact, very powerful and made in the USA by Niagara Industries who have over 23 years of experience. For more information please visit me site at http://www.etankless.com or you can call me at 888-688-8010


2 Will

Hi Ana – thanks for your comment. I took a look at you site and the first thing I noticed is that the heaters are coming down in price. That is a good thing. I did wonder about one thing:

A chart show the temperature and flow rate, even on one of the bigger models as being 95 degrees @ 1gpm. Then 64 degrees at 1.5 gpm. What exactly is that showing? It can’t be the temperature of the water exiting the unit as it shows 4pm being 24 degrees. What am I not understanding about that table?

Also this is a quote form some instructions on the Etankless site:

“For best performance adjust temperature at MEDIUM FLOW (approximately 1 GPM) this is the average water flow at any faucet with an aerator.”

If 1gpm is one faucet with an aerator, what would the average gpm be for two showers running at the same time? I ask because the first concern after price on these water heaters is ability to keep up with demand. If a tankless can’t keep up with at least a couple of showers or a shower and a couple of sinks at once, then you need to start installing multiple units in different parts of the house and that becomes another consideration. We have a big house and one 90 gallon water heater. We never run out of hot water, even with two showers and a sink or two being used at once. In a family with 5 or 6 people that is not unusual usage.




3 troy

Wow I found this post fascinating and very interesting. I had never heard of tankless water heaters before so as I was searching for similiar green energy type blogs I was pleasantly pleased to find this, it sparked more interest to learn more about this, thanks for a great post.


4 Will

They are great inventions, Troy, but like LED light bulbs, need to come down in price a bit before they will be completely accepted.


5 Aaron

Another consideration is the climate you live in. Tankless is almost always better (even electrical) in warm climates because of the temperature of the incoming water. It doesn’t have to be heated up as much as in cold climates, so you use even less energy.


6 Steve

hi Will, I noticed the link to this post under “recent comments” and had to click through. My brother has a tankless water heater and swears by it. That said, I like your review. Rather than just saying they’re great OR they aren’t worth it, you point out the positives and the negatives, and leave the decision up to your reader. The initial cost is significant. I like the fact that you can’t “run out of hot water” and then have to wait for the tank to refill, but if the output capacity can’t keep up, or if I have to run my sink at a higher rate than I want to (wasting water), that’s a problem. This review reminds me of your post and comment on “is water the new oil?”. You wrote that low flow toilets are “great”, BUT you need a certain amount of water flow to move the solids through the pipe, especially on long, gradual runs. For every “great” solution, there are usually considerations and trade-offs. I like the fact that you point these out. ~ Steve (I’m not sure if I’d get a tankless water heater, but if I needed trade show booths, I know were I’d go!)


7 Raj

Landed here by googling. “Tankless Water Heaters Might Save Money and Energy.” Well said, webmaster,

Raj Parmeswar


8 JA

I echo your sentiment, this small machines can simply help you save money. Now a days there are lots of machines that are invented for saving purposes just like the solar panels


9 Energy Certificates for landlords

We specialise in saving energy for residential clients and have found that the tankless water heaters are very good for the single person living at home as the demand is economical over the electric water tanks. We promote many of these to the elderly who live alone and need to save money.Great product but a little more expensive in the UK at xmas when the outside water comming in is REALLY cold! 🙁


10 Paul

Good article! I have just recently heard about these and at first, was a little skeptical. But the more and more I research, the more and more I am thinking about buying one.


11 Kenya

Although it might take some time to break even and start saving real money, it sounds like a wonderful idea having one of these tankless water heater. The technology is also great. Thanks for your post


12 jaya

Since tankless heaters are smaller and do not hold water, their life span is 20 years, twice its counterpart’s which is a main advantage.
.-= propane burner´s last blog .


13 Anonymous

I’ve bought many of these energy saving applicances and love them. Sadly the price is still too high. we need larger government subsidies to encourage more people to buy energy saving models.


14 Jonathan Sparco

Despite selling different sorts of water heaters here in our area, the ones we use at home is a tankless type. Although you can complain about jumping up and down as cold water initially drenches you when taking a shower, but after a several seconds, you can enjoy a warm bath without having to think of running out of heated water.


15 CLoyd

For 15 years I managed a facility in a high rise in L.A. that had twelve kitchens, all with tankless water heaters under the sinks. They never lasted more than a year or two and had to be replaced constantly. The water flow had to be just right for them to work at all. The worst problem was in the two kitchens that had dishwashers. The water never got up to the correct temperature to dissolve and activate the detergent, which the GE appliance people told me was something like 133 degrees. The detergent ended up caked all over the dishes and inside of the dishwasher. This went on for years of appliance repairmen and heater replacements. Finally in about 2008, the building engineer suggested ganging two units together, which succeeded in raising the temperature high enough to get the dishwasher to work. I thought over the years the technology would have gotten better, but at the time I left in 2010, It didn’t seem like it. I also had a friend with a whole house tankless heater, that they thought was the greatest thing since sliced bread but we and all our friends who stayed with them and took barely warm and brief showers at their house disagreed. An engineer friend of mine who is just finishing building a brand new high-tech house nearby (who also lived in Europe for several years with a tankless heater) and has done a lot of recent research on them, won’t have anything to do with them. He is installing a traditional tank electric heater. We live in the mountains, get lots of snow, and the water has to be heated from a very low temperature. He doesn’t believe the technology is up to the task even today.


16 Will

Thanks Cloyd! Nothing like first hand experience.


17 Johnny

I didn’t realize that it would take 3-4 years to break even on a tankless water heater. The benefit is that you can save energy with them. However it is a disadvantage that it costs so much more. They are both good decisions for different reasons. I think I lean more towards a tankless water heater.


18 Silas Knight

I had heard a lot of negative things about tankless water heaters too, so I agreed with your article a year ago. However, after reading this new article, the tankless water heater does sound like a good choice. We are actually looking at replacing our water heater, so thanks for the information!


19 DBM Solar

If you want to save electricity bills while you have a hot shower in the morning, this tank less water heater is perfect for you. With your tank less heater, you’ll be able to save energy and also reduced the use of heat.
DBM Solar recently posted..Fossil Fuels – Is Coal Fuel Good or Bad?My Profile


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