Widely used in Europe and Japan, tankless water heaters offer on-demand hot water and lower water heating bills. These units are so small they can be installed under a sink, on a wall or even on the exterior of the home, yielding space savings for the homeowner. A larger model can be used in place of a storage tank to supply hot water for the entire home; a small point-of-use water heater can be used to supplement a home's existing tank system.
A tankless system can be a useful option when remodeling a kitchen or bath or when replacing the home's existing system. Because the electric units require no venting and the gas units can be vented through a sidewall, tankless water heaters are appealing to remodelers who would like to avoid adding roof vents.
Tankless water heaters made up almost 10 percent of the $1.9 billion U.S. market for water heaters in 2002, and their popularity is increasing. They have been identified as a Top Ten Technology for 2004 by the Partnership for Advancing Technology in Housing (PATH), a program of the U.S. Department of Housing and Urban Development designed to promote practical, cost-effective, and efficient technologies to the housing industry.
Tankless water heaters are also part of PATH's "Tech Set" on resource-efficient plumbing unveiled at last month's International Builders' Show. PATH designated tankless water heaters as one of the standard features of an integrated water distribution system that can decrease construction and home maintenance costs.
"The sales of tankless water heaters are definitely on an upward trend because people are looking to be more energy-wise," says Maryke Gillis, the marketing director for Controlled Energy Corp. of Waitsfield, Vt. "Americans in general are looking for alternatives to the standard tank heater, which heats and reheats the water, then heats and reheats it some more."
The research firm Frost & Sullivan echoed that outlook in its 2003 report "United States Water Heating Equipment Markets".
"The market for tankless is virtually untapped and offers the possibility for
substantial growth," notes the report — particularly in the replacement of traditional water heaters.
Because they are so small, tankless water heaters are especially appealing abroad, where homes tend to be much smaller.
"The primary reason to buy a tankless hot water heater has to do with space. In my mind, that is what homeowners buy over everything else," says Gary Klein, an energy specialist with the California Energy Commission (CEC). "The most attractive benefit has to do with the flexibility in where you locate the hot water heater, and that you are not limited to a space that is 3-foot-by-3-foot or bigger."
While that may not seem like a lot of extra room, a tankless may be a great option in homes where space is tight. Some homeowners would love to have an extra closet or more usable space in their basement or cellar. The tankless water heater makes that possible.
Besides gaining square footage, the homeowner also gets an endless supply of hot water since it is heated at the unit on demand. For whole-house models, it may take a short while for the hot water to reach the tap; for point-of-use models, hot water is instantaneous.
According to a national survey done by Public Opinions Strategies, one of the most frequent homeowner complaints is running out of hot water when multiple fixtures are in use simultaneously or in rapid succession. A properly sized tankless water heater can keep up with hot water draws from multiple fixtures, with proper selection of the burner or element capacity.
"It depends on your hot water needs as to what water heater is best for you," Gillis says. "A lot of people require two major hot applications at the same time, and there are tankless water heaters that are capable of that."
A tankless unit requires between 32,000 and 48,000 BTUs of natural gas, or between 8 and 12 kilowatts of electricity, to heat 1 gallon per minute (gpm) of hot water and keep up with this flow rate continuously.
According to the CEC, a typical sink draws 1.5 gpm, a shower 2.5 gpm, washing machines and dishwashers 4 to 5 gpm, and a master bathtub 6 to 8 gpm. To run two showers and a sink simultaneously, a heater must have the capacity to heat 6.5 gpm, even if this level of simultaneous use is infrequent. For greater demand, it may be necessary to install a point-of-use tankless water heater. While this would require a greater initial investment and longer payback period, it would ensure that properly heated water is provided instantaneously and continuously.
A device that produces hot water on demand may sound like it uses a lot of energy, but because a tankless unit doesn't have to heat standby water sitting in a tank, it's actually very efficient. Once the unit's heating device activates, it provides a constant supply of hot water. The temperature rise is determined by the demand and the heater's capacity.
"You wouldn't leave your car in the parking lot running all day, would you? That's what it's like with a conventional water heater," Gillis says.
The heating devices can be electric or gas, including natural gas and propane. Residential gas models usually have greater capacity, and some models can heat more than 5 gallons per minute by 60 degrees. Electric units need a relatively high power draw because water must be heated quickly to the desired temperature, which means the electrical system must be able to accommodate this high demand. As a result, electric units typically have a lower maximum capacity.
Of course, the bottom line for many homeowners is saving money. Tankless water heaters can save between 10 and 20 percent on a homeowners' water heating bills, or an average of about 4 percent savings on total annual household energy costs.
Based on data compiled by Home Depot from U.S. Department of Energy test methods, a typical household using 64.3 gallons of hot water a day heated to a 77-degree temperature rise spends $214 per year on a natural gas tank water heater. Operating a tankless gas model would cost the same family only $150 annually. With an electric tankless water heater, the household would spend $438 a year on water heating, which is $50 less than a standard electric water heater.
Those savings are welcome, since a tankless water heater can cost twice as much as comparable tank-type units. Tankless units cost between $200 for a small electric under-the-sink unit to $1,000 for a large gas-fired unit. As a rule, the greater the water capacity, the greater the cost of the unit.
The initial cost can deter homeowners and contractors, although the lifespan of a tankless unit is usually at least five years longer than tank-type heaters, which means it should far outlive its payback.
Installing a tankless water heater is fairly easy, although the installer of a natural gas or propane unit will have to know the ventilation requirements.
"The only real difference between installing tankless and standard water heaters is the venting," says John Signorino, the owner of HotWater Engineered Systems in St. Louis.
Gas-powered units require venting through flues that are often larger than those already in place for tank-type heaters. Besides being larger, some building codes require that installers use Category III venting material. Signorino recommends using Category III material whether it's required or not because it better accommodates the positive pressure vents that come with most models. Despite these requirements, it can be cheaper and easier to vent gas tankless water heaters. The positive pressure vents require shorter vents, and they can be vented though a sidewall instead of the roof. If you don't have to poke holes in the roof, there can be some real savings in time and materials. With fewer vents, the roof also has fewer opportunities to leak.
Electric tankless water heaters do not require venting, but they can create an excessive draw on the electric power supply. As a result, multiple circuits or heavier wiring might have to be installed, especially in older homes.
Regardless, if a tankless water heater can save money for the homeowner, time for the contractor, and result in a more durable installation, it can be an attractive option–especially if the owner can get an extra closet out of it, too.