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Everything You Need to Know About Tankless Water Heaters

Tankless Water Heaters: Homeowner FAQs and Considerations

Installing a Tankless Water HeaterTankless water heaters are a modern invention that are highly sought after because they're energy efficient, space efficient and are overall better for the environment. Also known as demand-type or instantaneous water heaters, these devices provide hot water for its users on demand.

At one time, nearly every home relied on a water heater with a tank for its supply of hot water. Traditional tank water heaters hold between 20 and 80 gallons of water with some being electric, and others gas-fueled. Inside the tank are heating elements to keep the water at a constant preset temperature. As the water is used, it is replaced by cold water from an inlet near the top of the unit.

Unlike traditional water heaters, tankless units are mounted to the wall. There is no storage tank needed, all hot water is produced on demand. If you're a homeowner who prioritizes money savings and environmentally-friendly home fixtures, a tankless water heater may be the right appliance for you.

How It Works

A tankless water heater looks like a metal box, similar in size to a circuit breaker box. Inside the box is a pipe that flows through a heating element. When someone in the house turns on a hot water spigot at a sink or bathtub, water begins to flow through the pipe. This causes the ignition within the unit to turn on and heat the water as it flows through the element. Tankless water heaters can be gas-fired or electric, like traditional heaters.

Heating Water in Shower

Tankless units deliver a constant supply of hot water without ever running out. Whereas traditional tank water heaters can only supply as much water that has been preheated and contained in the tank, tankless versions will continue to produce water for as long as the heater itself continues to function.

Unlike traditional water heaters, the only limitation on a tankless unit is the flow rate. The flow rate is the quantity of hot water that the heater can produce in a given period of time. A typical flow rate in a home is approximately 2 to 5 gallons per minute, but some units may produce as much as 8 gallons per minute. Flow rate varies from one model to another. For a larger home, a large tankless unit with a high flow rate may be necessary. In a smaller home with fewer people, a lower flow rate may be adequate.

If the appliance is poorly fitted for the size of the house, particularly if an undersized unit is installed in a home with many people, the heater will have a hard time keeping up with the demand for hot water. Work with a contractor to ensure that the unit you choose is appropriate for the size of your home.

Time to Go Tankless?

Most homeowners are wary of jumping to replace their traditional water heater without good cause. If your current water heater is relatively new and in good functioning condition, it may not be the best time to get it replaced.

Tank-style water heaters last between 8 and 12 years. When they reach this age, they become less reliable. Often a leak is the first sign that a tank-type heater is nearing the end of its lifespan. Sometimes these leaks can be devastating in scope and expensive to repair. If your water heater is nearing the end of its lifespan or if you're building a new construction home, this is a good time to consider and install a tankless water heater.

Benefits

(Nearly) Instant Hot Water

Saving on Utilities with Tankless Water Heater

Tankless water heaters work surprisingly quickly. As soon as the hot water spigot is turned on, the tankless water heater springs into action. To get hot water, it only takes the amount of time to clear the cold water from the pipes with the hot water coming from the unit. In cases where the tankless water heater is installed at the point of use, hot water becomes available almost instantly for the user.

Energy Savings

On-demand water heaters are more efficient than standard tank-style water heaters because they don't waste energy heating an entire tank. In many homes, tankless water heaters are over 30% more energy efficient than tank-style water heaters. In homes that use a lot of hot water, tankless water heaters are about 15% more efficient thank standard water heaters. In homes with a water heater at each hot water outlet, tankless water heaters can be up to 50% more efficient.

Financial Savings

Energy savings produces financial savings. Just how much money is saved depends on specifics like what type of energy source the unit requires, how much more efficient the new water heater is over the old water heater, how often the appliance is used and other factors.

What's definite is that the savings builds up over many years. Over time, you may be able to save hundreds or even thousands of dollars on utility bills.

Space Savings

Tank-style water heaters are generally the size and shape of a very large punching bag. They often require their own closet, and must be given enough space in the house, away from clutter and other items. Tankless heaters, on the other hand, are small and attach to the wall. They have a low-profile, take up no floor space, and do not need a dedicated closet or space in the attic.

Longer Lasting

Whereas standard tank-style water heaters last up to about 12 years, tankless units have a service life of approximately 20 years. This equals almost 8 more years of solid use without having to replace the unit, and for that matter, tankless water heaters have replaceable parts that can extend their service life even longer.

Never Run Out of Hot Water

Traditional water heaters can only supply so much hot water before the unit must refill and the water in the tank must be re-heated. This problem never happens with an on-demand tankless water heater.

Potential Drawbacks

Initial Cost

Tankless water heaters can cost up to 3 times more than tank-style water heaters. Whereas a traditional heater will cost around $900 with installation, tankless versions cost around $3,000 with installation. Sometimes the installation cost can become especially expensive because most pre-exiting homes were not built to accommodate a non-traditional water heater.

Limited Flow Rate

Although a tankless water heater can never run out of water, it does have a limited flow rate. There's nothing that can be done about this once the heater is installed. The only way to ensure that the flow rate is adequate for the home is to purchase a unit that is the right size for the home and average water usage.

Some Energy Loss

Gas-fired tankless water heaters generally have a higher flow rate than electric tankless water heaters, however, some gas-fired units have a pilot light that remains lit at all times. This results in some energy loss.

Large Homes May Require More than One Unit

Flow rate can be especially problematic in large homes where demand for hot water can be high. The best way to keep up with the demand is to install more than one unit, which can make the cost of installing a tankless water heater system prohibitively expensive.

Choosing the Right Unit

Choosing a Tankless Water Heater

Before buying a tankless water heater, consider your options. Shop around with different suppliers to find a model that's suitable for your home and budget. Talk to a professional for recommendations and advice.

Don't buy a water heater without having a consultation from a professional. Your plumber will know the size and model that will best service your home and meet your water demands. Home layout can have an impact on the type of water heater and how many tankless units you'll need. A plumber can help you decide this as well.

Types

There are three types of tankless water heaters: non-condensing, condensing and hybrid.

Non-Condensing

Non-condensing tankless water heaters use a heat exchanger to heat the water. This creates a hot exhaust that must be released outside the home. Non-condensing units require an expensive vent to be installed, which can make budgeting for this type of water heater more difficult.

Condensing

Condensing water heaters have multiple heat exchangers. They are designed to capture the exhaust produced by the first heat exchanger, to further heat the water. This makes the condensing tankless water heaters more efficient than its non-condensing counterparts.

Hybrid

Hybrid models are different from all other tankless water heaters. They're called hybrids because they have a small tank, but use far less energy than traditional tank-style water heaters. Hybrids move heat from the air outside the tank to the tank itself.

They're even more efficient than traditional non-condensing and condensing tankless water heaters, but they're not for everyone. These heaters can be even more expensive to purchase than other tankless units. They also require open air around the water heater in order to function. Homeowners replacing a tank-style water heater kept in a closet may need to reconfigure their water heater storage when installing a hybrid-style heater.

Sizes

Once you've decided what kind of tankless water heater to buy, you've still got to buy the right size for your home. Flow rate and temperature rise will be very important at this stage.

Flow Rate

To determine flow rate, first determine how many of your plumbing fixtures should be able to function simultaneously. Once you know approximately how many fixtures may be functioning at once in an average day, add the flow rate of those various fixtures together to determine the estimated flow rate for your home.

For example, if you need to be able to take a shower, use the kitchen sink and run the washing machine at the same time, you'll need a tankless water heater with a flow rate of 6.5 GPM to service all those actions at once. Below are the average flow rates for various household fixtures:

  • Kitchen Sink - 1.5 GPM
  • Bathtub - 4.0 GPM
  • Dishwasher - 1.5 GPM
  • Washing machine - 2.0 GPM
  • Shower - 3.0 GPM

If you've recently purchased low-flow fixtures or aerators, these numbers may be lower. Check on the packaging or in the manufacturer's literature to determine the output for your specific fixtures.

Temperature Rise

Temperature rise affects the maximum high temperature that a water heater can produce. To determine what temperature rise is suitable, know the temperature of your cold water input. Fifty degrees Fahrenheit is a typical groundwater temperature in most areas of the country, but you can find out for yourself by measuring the temperature of the water as it comes out of your pipes.

To find out necessary temperature rise, subtract the temperature of your ground water from the maximum high temperature you'd like your tankless water heater to achieve. Most homeowners set their water heaters to 120°F. To reach a high temperature of 120°F from 50°F, a temperature rise of 70°F is suitable.

Fuel Type

Overall, most tankless water heaters run on either electricity or natural gas. These factors have an impact on the device's flow rate, energy savings and maintenance costs.

Electric Tankless Water Heaters

Electric tankless water heaters are relatively easy to install and maintain, but most electric tankless water heaters can serve only one outlet at a time. For a large home with many family members, a single electric tankless water heater may not be enough. But overall, electric tankless water heaters are generally more efficient, wasting less energy, than comparable gas-fired versions.

Gas-Fired Tankless Water Heaters

Gas tankless water heaters are preferable to many homeowners simply because they produce more hot water than electric types. They generally require an expensive plumbing reconfiguration before they can be installed, because most traditional hot water configurations do not have the appropriate hookups for a tankless water heater.

One Unit Vs. Several Units

Tankless water heaters come in different sizes. The smallest on the market are incapable of providing enough hot water for an entire house. These units are typically called point of use water heaters, meaning they're only attached to one faucet or they only service one room of the house.

When trying to decide whether to install one water heater or many water heaters throughout the house, there are many factors to consider.

  • Several small units are generally more efficient than one large unit.
  • Homeowners specifically seeking an electrical water heater may need several units.
  • Point of use water heaters provide hot water faster than single units, because the hot water source is closer to the appliance providing the water.
  • Installing several small water heaters could be more expensive up front, depending how many are installed and where.

Sometimes, a point of use water heater is used to service a single fixture that is far from the home's main water heater. Point of use units are also common in isolated locations like RVs, in-law apartments and boats.

If you're trying to decide between several small point of use water heaters and one large unit, talk to a plumber. Your plumber can help you decide what makes sense for your home's configuration, your water usage needs and your energy savings goals.

Installation and Maintenance

Water heaters, whether they're standard tank-style heaters or tankless units, need little maintenance in order to keep functioning. For routine maintenance and general troubleshooting, homeowners can do this most of this work on their own. However, working with a professional when the situation warrants it can be very important. If you're thinking about installing a tankless water heater in your home, or if your tankless unit is having enough trouble that you're not able to identify the problem yourself, it's time to hire a professional.

As a homeowner, it's important to keep the phone number for a professional plumber on hand for issues like plumbing emergencies and basic installations. Having this information easily accessible can help ensure that you're able to get help when you need it.

Also important is developing a working relationship with a capable plumber and other workers. This makes it easier for you to decide who to contact in an emergency or when trying to install an all new appliance in your home.

Installation DIY vs. Pro

The cost to have a contractor install a tankless water heater is about $2,000 in addition to the cost of purchasing the water heater. This high price tag can make tankless water heater installation unrealistic for some homeowners. But homeowners who feel comfortable performing their own installation may be able to save enough money to make living with a tankless water heater more realistic.

The perfect time to install a new gas-fired tankless water heater is when a house is first being built. Once the home is constructed and a tank-style water heater is already installed, it becomes much harder and more expensive to convert to a tankless water heater. Electric units are generally easier to install, although some skill and plumbing knowledge is still required.

If you're a homeowner who feels comfortable performing your own tankless water heater installation, find out if a building permit is required to install the unit. Study up on the installation of your particular model before trying to install this type of water heater. Attempting an installation without research could result in a serious problem like damage to the home and damage to the water heater.

Installation of a gas-fired heater could require installation of a larger gas line, and any kind of water heater (gas or electric) could require installation of a larger water line. This should be handled by a professional. Tankless water heaters also require special venting. If you don't feel up to making these changes yourself, then this too should be handled by an expert.

Routine Maintenance

Tankless water heaters are longer lasting than standard water heaters, but still benefit from occasional routine maintenance. If the unit doesn't get the maintenance it needs, it may have a shorter service life and reduced efficiency. For most units, service once per year is enough.

Every tankless water heater is different, but below are some maintenance tasks that apply to most models and units.

Change or Clean Filters

Most tankless water heaters have a filter to prevent scale buildup in the unit. This is especially important in homes with untreated hard water. If your home has hard water and you're installing or have installed a tankless water heater, talk to your plumber about also installing a water softener.

If you're relying solely on the filters in your unit, change or clean them as soon as they're dirty for optimal performance. The manufacturer's instructions will tell you which one is appropriate for your home.

Check Burner

Look at the burner to check for soot. This could be an indication of poor draft or ventilation, which could cause carbon monoxide buildup in your home. If you see soot around the burner, it's time to have it inspected by a professional.

Flush with Vinegar

Just as traditional tank-style heaters need to be flushed, so do tankless units. The process varies from one model to another, so check the procedure in the owner's manual before getting started. In general, the flushing procedure goes like this:

  • Disconnect the power.
  • Shut off the water supply.
  • Attach a short hose to each isolation valve.
  • Attach a pump to the cold water hose.
  • Place the hot water hose and the pump inlet hose into a 5-gallon bucket containing vinegar.
  • Allow the pump to run for an hour.

It's very important to follow all manufacturer's instructions when flushing your specific tankless water heater. Not all water heaters follow the same procedures. Failure to follow proper protocol could result in injury or damage to the heater itself.

Typically, tankless water heaters only need to be flushed about once annually. But if your home has hard water, flush it more often to be safe.

Prevent Freezing

Standing water in a tankless water heater can expand when it freezes, causing damage to breakable plastic parts. This can be a problem in climates with harsh winters, especially if the unit is disconnected from the power.

Tankless water heaters typically have freeze protections in place that prevents the interior of the heater from freezing, but the heater must remain plugged in for this function to work. Never leave a tankless water heater unplugged over the winter.

In very cold climates, sometimes the heater's built-in protection is not enough on its own to prevent the unit from freezing. To prevent a pipe from bursting or another problem from occurring, drain the unit per the manufacturer's instructions.

Troubleshooting

Many problems that tankless water heaters experience can be fixed at home without help from a professional. If your tankless water heater is experiencing one of the problems below, follow these troubleshooting procedures before calling a pro.

Mineral Buildup

Buildup of minerals in the water line can eventually cause low water pressure and even clogs. Once the line is coated in a thick layer of scale, fixing the problem can be very difficult. Often, the only way to get rid of a large build up of scale in a pipe is to replace the pipe entirely.

The best way to avoid these problems is to flush the system regularly before the buildup becomes a problem. Some units have a reminder light to indicate when the flush needs to occur. See the flushing procedure above to remove limescale.

Long-term solution:

If your home naturally has hard water, talk to your plumber about installing a water softener. If you can't afford a water softener, buy a tankless water heater that advertises resistance to scale buildup, and check to see if you can purchase an extra filter to protect your appliance.

Overloading

If a tankless water heater is unable to meet the demand at home, the appliance's flow rate is too low.

Short-term solution:

Use fewer plumbing fixtures at once by rotating their usage if possible. The fixtures that use the most water include the bathtub, shower and washing machine. When your water heater overloads, make a note of what appliances were being used when it happened. Then, avoid using those appliances in combination with each other. Educate other members of your family to ensure that everyone knows what can and can't be used at the same time.

Long-term solution:

For most families, avoiding using certain plumbing fixtures together at the same time is not an acceptable long-term solution. If your tankless water heater is undersized for the size of your household, the only way to fix the problem permanently is to install a second tankless water heater to supplement the first water heater or look into the difference a larger unit would make. Talk to a licensed plumber to ensure that the tankless water heater you purchase is right for the size and demand of your household.

Heater Too Far

The further the water heater is from the plumbing fixture, the longer it takes for the hot water to reach the fixture. This is time inefficient and also wastes energy, because the water must run for a longer period of time while the user waits for the hot water to reach the fixture.

Long-term solution:

Like with the overloaded water heater, installing a second water heater fixture in the house can fix this problem. Installing water heaters at opposite ends of the house can ensure that the hot water has less distance to travel to reach the plumbing fixture being used. Your plumber can help you decide where to install your second water heater to reduce wait times.

Buyer Tips

Buying New Appliances

Buying a tankless water heater can be overwhelming unless you've done it before, and many people haven't. These tips can help you pick the best unit for your home.

Buy a Unit with a High Energy Rating

Tankless water heaters come with an energy rating that helps the homeowner gauge overall efficiency. The higher the energy rating, the more efficient the heater. ENERGY STAR rated units have an energy factor at or above 0.90. When comparing multiple water heaters to one another, check out the energy rating on each unit.

Watch Out for the Power Upgrade

Electric tankless water heaters require a lot of electricity and may need a dedicated circuit. If you're thinking about installing a tankless water heater in your home, have an electrician inspect your circuit breaker box to find out if there is an available circuit suitable for a tankless water heater.

Compare Warranties

When shopping for a tankless water heater, read the warranty information and take this into account when trying to decide which unit to buy. This can help you decide between two appliances that, otherwise, seem very similar.

Budget Properly

Tankless water heaters start as low as $500 and can be as expensive as $3,000. In addition to that price, you can also expect to pay another $2,000 just for installation, depending on fuel type and other factors. Budgeting properly is critical. To install a unit as inexpensively as possible, work with your contractor to find one that fits into your budget.

When budgeting, don't forget about the long-term savings. Although you may spend thousands of dollars or more on your water heater purchase and installation, you could save thousands of dollars over the course of the heater's service life (about 20 years). Plus, when it's time to replace your old tankless water heater with a new unit, the cost of installation should be lower because your home will already be set up for that type of water heater installation. Over the course of time, you could make all your money back and then some with all the energy savings a tankless water heater will provide you.

Tax Credits and Rebates

Many tankless water heaters, especially ENERGY STAR qualified units, are eligible for government tax credits. However, it's important to confirm eligibility before making any purchase.

Generally speaking, electric tankless water heaters are often not eligible for a tax credit, but some gas and propane tankless units may qualify. In addition, many units may also qualify for local utility rebate programs, so check with your local utility companies for this perk. And to claim your federal tax credit, fill out form 5695 and send it in with your taxes on or before tax day.

For example, if you purchase an eligible tankless water heater in 2019, form 5695 must be submitted when you file your 2019 taxes. If you fail to meet the deadline, you may not be able to claim your credit. Keep all your receipts and submit them to the IRS if it's required. Form 5695 can be found on the IRS website at: https://www.irs.gov/pub/irs-pdf/f5695.pdf.

General Usage Tips

Using Tankless Water Heater to Save Energy

The choices you make during and after installation affect the efficiency and experience that you'll have with your tankless water heater.

Reduce Wait Times

Installing your heater close to the plumbing fixture will decrease the time you spend waiting for the water to heat up. Work with your plumber to determine the best location in your house. Your plumber may recommend multiple heater installations to ensure total satisfaction with your tankless water heater experience.

Decreasing the diameter of your hot water lines is another way to decrease wait times, as is installing a circulation pump. Your plumber can go over the options with you to determine the most efficient way to meet all your needs.

Work with a Pro

Although many people are capable of installing their own tankless water heater, there are many ways that the purchase and installation of this kind of product can go wrong. Working with a pro is the best way to ensure that the size and capacity of the unit will be most appropriate for your home. An experienced professional will also know how to position and install the correct venting.

Additional Energy Saving Tips

If saving energy is your top priority, there's more you can do to reduce your home's energy usage in addition to getting an on-demand water heater.

Set a Lower Water Temperature

Your tankless water heater spends energy on every degree of heat it produces, so reducing the temperature setting enables you to save energy. The US Department of Energy recommends a water heater thermostat be set at the temperature of 120°F, unless you or someone in your household has a suppressed immune system or a chronic respiratory condition.

Insulate Your Pipes

Pipe insulation protects your pipes from cold outside temperatures, which enables the hot water to come faster on cold days. This saves water and energy by reducing the time you spend running the hot water.

Pipe insulation can also help the hot water in your pipes stay hot after you've turned off the spigot. In fact, insulating your pipes even raises the temperature of the hot water traveling through your pipes, so you can reduce the temperature setting on your tankless water heater by a few degrees.

The best time to insulate your pipes is when you're building the house or repiping your home. If your home is already built and you're not repiping any time soon, you can still easily insulate any exposed pipes without tearing out surrounding walls.

Fix Leaks

Leaks cost money by wasting water an energy. Hot water leaks also waste money due to your hot water heater needing to continue to run even after the water hes been turned off. Repairing leaks in a timely manner will help you save energy by reducing your tankless water heater usage.

Reduce Your Water Consumption

One of the best ways to save energy is to reduce your water consumption habits.

  • Install low-flow shower heads, low-flow toilets and water aerators on your sinks.
  • Reduce the amount of time you spend in the shower.
  • Take more showers, fewer baths.
  • Only run the dishwasher when it's full of dishes.

Work with your family members to help everyone in the household develop these same habits.

Taking the Next Step

Tankless water heaters are gaining popularity in the United States because they're energy efficient and compact. They also save homeowners money and last for a long time. Whether you're building a new construction home or installing a new tankless heater in a pre-existing home, it's important to work with a licensed contractor who has experience working with these devices.

When choosing a contractor, ask them to discuss how many tankless water heaters they've installed and how long they've been performing these installations. This can help you decide whether your contractor is right for you.