choosing a tankless water heater

Tankless water heaters can provide significant energy savings over tank storage water heaters. But are they worth enough for those who have tank storage units?

Payback Period

Tankless water heaters will cost you around $300-$400 more than qualified storage models.

That means that you may recover the initial higher investment in 3 or 4 years (for average uses), if the new unit doesn't demand additional installation costs.

But if you are replacing an old storage-tank model, and it replacing it requires new electrical outlets for the fan and other electronics, as well as upgraded gas pipes and a new ventilation system, then the installation costs may soar up to more than $1,000, making the payback period much higher: often above 12 years, in spite of the lower operating and energy costs of tankless models. In such a case, only tax credit and rebates will make the payback period shorter.

Note: In USA (2009 through December 31, 2010) you can benefit from tax credits for qualified models. These tax credits can amount to 30% of the cost of the water heater, up to $1.500. See: Energy Star and Tax Credits

Capacity

Typical tankless water heaters provide around 2–5 gallons (7.5–15 liters) of hot water per minute. But that depends also on its type (electric or gas), models and technology (the condensing technology provides higher rates).

The fuel Issue

Gas-fired water heaters have higher capacities and are more economical than simple electric models, namely the new gas condensing models. These heaters can easily provide hot water for several bathrooms and simultaneous uses - showers, dishwasher and washing machine - without running out of hot water.

Though gas water heaters are usually a better option than electric models, new heat pumps water heaters (which are electric) are also a competitive option, namely in rural areas without natural gas service.

See, for details: Fuels & Water Heaters

The On-Demand water heaters energy efficiency

When choosing a tankless water heater, prefer a qualified gas model. It will allow higher energy savings and lower energy bills. In USA or Canada prefer products with a high Energy Star rating.

Qualified models involve higher Energy Factors (EF), a rating of the water heater's overall energy efficiency based on the ratio “hot water produced/fuel consumed”.

For demanding uses, prefer new qualified gas condensing water heaters (which can be tankless or storage...).

Manufacturers

There are several reputable manufacturers of tankless water heaters: A O Smith, Eccotemp, Bosch, Eternal, Noritz, Paloma, GE, Rheem, Richmond, Rinnai, Ruud… (this list is far from complete).

Be aware anyway: as a rule, manufacturers present different models with different performances and qualifications…