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As of late, tankless water heaters have been exceedingly popular. Homeowners are raving about their lowered energy costs with new tankless water heater installations; but, is the high initial cost worth it? We’ll give you the pros and cons, so you can make an informed decision.

What is a Tankless Water Heater and How is it Different than Traditional Tanks?

Traditional systems rely on a tank of stored hot water. This tank continuously cycles through a heating process, expending energy that goes unused, which means a higher utility bill at the end of the month. This system creates a few problems that a tankless water heater solves. A tankless system does not waste energy heating stored water because it heats water on demand as it is used. Water flows into the unit and is heated by coils before it is sent to its final destination. This prevents your showers from ever going cold! However, there are limits to how much a tankless system can heat water flowing at a given rate. As you can imagine, a hot shower will take more energy to heat than a sink faucet. Tankless systems do not have a reservoir of hot water to draw from, so a high level of water use at one time can tax the system. The only time this might be a problem is if you have multiple showers and appliances running at once.

Point-of-Use vs Whole-House

Point-of-Use A point-of-use tankless water heater is one way around this capacity issue. This is a smaller unit that connects below a sink or a shower that only heats water coming through that pipe. As long as your shower is connected to a point-of-use unit, your water will stay hot regardless of any other running appliances or fixtures. The relatively low flow rate for point-of-use systems makes them ideal to run off electrical, which is more efficient but cannot handle as much flow. Point-of-use units can also be installed in addition to a traditional tank system to relieve stress on the system.. If your showers are always going cold, a point-of-use system is a cheap way to alleviate the problem! Whole-House A whole-house unit will cover all of your water heating needs. These systems are much bigger and much more expensive, but they can heat all the water in your home with more efficiency than a storage tank system. Whole-house units are designed to handle a greater flow of water than a point-of-use system and are usually gas-powered. Depending on your home and household water use, you may need more than one whole-house tankless system installed to keep up.


You’ve seen the basic options of tankless water heaters and how they work, but how much are you really going to save? According to the U.S. Department of Energy, tankless systems are 24%-34% more energy-efficient for homes that use less than 41 gallons of hot water a day. If you use more than 80 gallons of water a day, efficiency may increase only around 10%. Gas-powered tankless systems can handle greater flow but aren’t as efficient as electric units. The energy savings can be offset in this case. Still, you may be saving money in the long-run because tankless systems tend to last much longer and have cheaper repairs than storage tank heaters. Every household has different water-use habits. If you don’t use that much hot water, you may be spending a decent chunk of your bill on a storage tank heater that just reheats the same water over and over all day. A tankless system for this kind of household, whether point-of-use or whole-home, could reduce your water heating bill by a third.
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