Is a Tankless Water Heater a Good Fit for Your Home? Understanding the Pros & Cons

by Jay | Updated on June 7th, 2023

Are you contemplating a switch to a tankless water heater? These innovative devices have soared in popularity recently, boasting an array of benefits yet having their fair share of drawbacks too. This comprehensive guide will provide an in-depth look at the upsides and downsides of tankless water heaters, aiding you in making an educated decision.


A Comprehensive Look at Tankless Water Heaters

Tankless water heaters, often referred to as instantaneous or on-demand hot water systems, present a greener substitute to conventional storage-tank water heaters.

Tankless Water Heaters

Contrasting with traditional water heaters that constantly heat a tank of water, an on-demand system heats water only when it’s needed. This fundamental difference makes them significantly more energy-efficient, with some tankless heaters being up to 80% more energy-efficient than their standard hot water tank counterparts.

Energy Efficient On-Demand Hot Water: A Modern Alternative to Storage Tanks

Tankless water heaters cater to your hot water needs without the requirement of a storage tank. The conventional approach involves a tank of various sizes and shapes used to stock preheated water. On the contrary, tankless heaters supply hot water at a pre-set temperature, eliminating the need for storage tanks.

These heaters primarily use electricity, natural gas, or propane as fuel. Gas variants are reported to be 22 percent more potent than their electric counterparts. This translates to around $75 in annual utility savings, given an average home’s daily usage of 77 gallons of hot water (as reported by Consumer Reports’ Tankless Water Heater Testing).

Types of Tankless Systems

Tankless systems come in two main varieties:

  1. Point-of-Use: These compact systems are intended to provide hot water to one or two specific locations, such as near a kitchen sink. Their small size permits installation in inconspicuous areas like a cupboard or beneath a sink.
  2. Whole-House Use: As the name implies, these systems supply hot water throughout the house. They’re typically installed in attached garages or utility rooms. However, the hot water may take a bit longer to reach the faucet due to a ‘lag time’ with this type of system.

Tankless System: Perks of a Tank-Free Hot Water Supply

Like any other home appliance, tankless water heaters come with a set of advantages and disadvantages. Here are some benefits of going tankless:

a front angle wider shot of camera moving forward and back on tankless water heater in the basement
  • Energy Savings and Lower Monthly Costs: While the upfront installation is pricier than traditional water heaters, they offer long-term savings on utility bills. In contrast to the energy waste involved in maintaining a tank of hot water, tankless systems are more efficient, reducing heating bills even when no one’s at home.
  • Instant Hot Water: Once the cold water in the pipes is flushed out, tankless water heaters provide an endless supply of hot water. This makes them efficient and compact alternatives to bulky storage tanks.
  • Infinite Hot Water Supply: A tankless heater can continually heat incoming water, providing an unlimited supply of hot water. This is in stark contrast to a storage tank system which may run out of hot water and require a refill.
  • Minimal “Standby Loss”: Tankless heaters excel in preventing “standby loss”. Traditional units continually heat water, adding to energy costs every time they do so, even if no one is home.
  • Space-Saving: Most models are smaller than traditional water heaters, typically mounted on a wall, freeing up floor space.
  • Reduced Risk of Water Damage: Storage tanks can leak or burst, creating the need for a containment pan in case of water damage. With a tankless system, the only water damage risk stems from a pipe or fitting failure.
Tankless hot water heater installed in a basement utility room to save money and energy.

Tankless System: The Downsides

While the advantages of tankless systems make them a favorable choice, they’re not without their downsides. Here are a few things to consider:

  • High Initial Cost: A tankless water heater, especially a whole-house unit, comes with a high initial purchase and installation cost. A unit can cost up to three times more than a traditional tank heater, not including the cost of retrofitting your home’s plumbing and electrical systems, which could be necessary depending on your home’s current setup.
  • Inconsistent Water Temperatures: Depending on your water usage, you may experience a “cold water sandwich,” where the water is alternately hot and cold. This can occur if the tankless water heater is overloaded with demand from too many sources simultaneously.
  • Limited Flow Rate: The biggest limitation of a tankless water heater is the flow rate. A single tankless unit may struggle to supply enough hot water during peak usage times, like in the morning when multiple showers may be in use. This issue can be solved by installing multiple tankless water heaters, but that will significantly increase the cost.
  • Lag Time: Although tankless water heaters provide instant hot water once the cold water is cleared from the pipes, there’s a lag time between turning on the hot water tap and getting hot water. This lag can be more noticeable in larger homes where the heater may be located a considerable distance from the tap.
  • Maintenance: Tankless water heaters require regular maintenance, such as yearly descaling, especially if you live in an area with hard water.

Factors to Consider Before Making a Decision

Before purchasing a tankless water heater, consider the following:

  • Your Hot Water Demand: Determine the peak hour demand for hot water in your household. If it’s high, a single tankless water heater may not be sufficient.
  • Type of Fuel: The type of fuel your heater will use (gas, electric, propane) can affect your long-term costs.
  • Energy Efficiency: The energy efficiency of the unit should be a consideration when it comes to the monthly cost of running the water heater.
  • Installation Cost: Consider the cost of the unit and its installation. Is your home ready for a tankless system, or will additional plumbing or electrical work be necessary?
  • Available Space: Do you have enough space in your home for the unit’s installation?
  • Local Climate: If you live in a colder climate, the incoming water temperature will be colder, which means it takes more energy to heat the water to the desired temperature. This could affect the efficiency of the unit and the flow rate.

Final Thoughts

Tankless water heaters offer numerous benefits, including energy efficiency, endless hot water, and a smaller footprint. But they also come with downsides, like the initial cost, the potential need for multiple units, and regular maintenance. Your final decision should be based on your household’s hot water needs, your budget, and the layout and setup of your home.

Jay

Jay is a health and wellness enthusiast with expertise in water quality and nutrition. As a knowledgeable advocate for holistic well-being, Jay successfully manages Type 2 Diabetes through informed lifestyle choices. Committed to sharing reliable and authoritative insights, Jay combines firsthand experience with a passion for enhancing health."