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A Tankless Job


A Tankless Job

With water heating accounting for 17–25% of the average household's energy expenditures, it's no wonder new home buyers are looking for ways to save energy — and money — when it comes to their energy bills. While most homes in North America use a conventional storage tank water heater to provide hot water in the home, in recent years, manufacturers have begun offering tankless...

By By Kevin Russelburg, Contributing Editor February 28, 2005
This article first appeared in the PB March 2005 issue of Pro Builder.


Conventional Water Heaters Versus Tankless Water Heaters
Selecting A Tankless Water Heater
The Pro's and Con's of Tankless Water Heaters
Tankless Water Heater Product Review

With water heating accounting for 17–25% of the average household's energy expenditures, it's no wonder new home buyers are looking for ways to save energy — and money — when it comes to their energy bills.

While most homes in North America use a conventional storage tank water heater to provide hot water in the home, in recent years, manufacturers have begun offering tankless water heaters as an alternative. Tankless water heaters, also called demand water heaters, do exactly as the name says — they provide hot water on demand.

As with many newer technologies, there is no shortage of claims promoting the advantages of tankless water heaters — or of countering opinions addressing their shortcomings. Both storage and tankless units offer advantages and disadvantages.





Point-of-use systems can be installed directly at the source where hot water will be required.

One of the biggest differences between conventional water heaters and tankless units is how — or, more precisely, where — they are installed. Larger tankless units, which may provide the hot water needs for an entire household, are typically installed centrally. Tankless heaters, on the other hand, do not necessarily need to be installed as the primary source of hot water for the home and therefore can be installed throughout the house.

Tankless water heaters come in a variety of sizes for different applications including: "point of use" (POU) hot-water sources for remote bathrooms, laundries and hot tubs; tankless models used as boilers to provide hot water for home heating systems; and tankless water heaters used for a single appliance

When selecting the type of hot-water source to install, it is critical to know the demand the unit will be expected to meet. A household that has many users requiring hot water simultaneously will be different from those using comparatively little hot water or those using hot water at different times. For example, homes that regularly have more than one shower or bath being used simultaneously will have different supply needs than those that do not. Dishwashers, washing machines and other hot water appliances must also be factored into the hot-water-demand equation.

The key difference between the two technologies is in the way they provide hot water to meet these various demands:

  • Storage tank-type water heaters hold a finite amount of hot water and require energy to heat the water initially and then to keep that stored water hot — continuously — until there is a call for it. Tank heaters are preset to maintain water at a certain temperature: usually between 120°–140° Fahrenheit (49°–60° Celsius). The heater must therefore operate periodically during dormant periods to maintain that preset water temperature. Because a storage tank water heater stores a finite amount of water (30 to 75 gallons), when that capacity has been used, there is a waiting period — called "recovery" time — for the unit to heat new water.
  • Tankless water heaters do not store hot water. Water is heated only to meet actual demand, as when someone turns on the shower or washes a load of clothes. It therefore does not consume energy during standby periods. This means that tankless water heaters can offer an energy savings over storage-tank models. However, based on the Energy Department of Energy's Energy Factor (EF) ratings and Estimated Annual Cost of Operation formulas, the energy savings from a tankless heater are estimated to be relatively low (approximately $80 annually).

Usage: Advantages and Disadvantages

While installation may be a prime factor in choosing a water heater, usage can also be a key reason for choosing one water heater technology over another. In looking at water heater usage, it is important to consider the advantages and disadvantages to choosing one technology over another.

Tankless Water Heaters - Advantages. As noted in the cost comparison table on page 92, tankless water heaters cost less to operate on an annual basis and have a longer life expectancy. In addition, installing a smaller tankless unit is ideal for supplementing a conventional storage tank model that provides water for the rest of the home. These small heaters are usually installed in a closet or underneath a sink.

Tankless Water Heaters - Disadvantages. With a tankless unit, those appliances using a large amount of water — for instance, the washing machine and dishwasher — need to be operated separately. However, separate tankless water heaters can be installed to meet individual hot water loads, or two or more water heaters can be connected in parallel for simultaneous demands for hot water. Some manufacturers claim that their product can match the performance of any 40-gallon (151 liter) tank heater.

In addition, tankless water heaters may leak if they are exposed to freezing temperatures or has a manufacturing defect.

Conventional Water Heaters — Advantages. As noted in the cost comparison table on page 92, the unit cost of a conventional water heater is lower than that of a tankless unit. In addition, many builders have used conventional water heaters for years so more is known about these units than about tankless units.

Conventional Water Heaters - Disadvantages. Conventional storage tank water heaters can develop corrosive leaks, resulting in water damage. These units also can decrease in efficiency over time due to mineral build-up inside the tank. This is due to the fact that storage tank water heaters store hot water, giving those minerals a chance to settle out and bake from the heat onto the walls of the tank, and onto the heating element in electrical models, reducing heat transfer.

Hot Water on Demand

To fully understand how tankless water heating technology works, one must remember the most important element of tankless technology — it is on demand.

With no storage tank, tankless heaters are required to heat water on demand. When a faucet is opened, the flow of the water triggers the unit's gas burners or electrical elements to turn on, heating the water as it passes through the device.

The time it takes to obtain hot water is directly related to the distance the hot water has to travel from the water heater to its point of use. The burners or elements shut down when the hot water faucet is turned off. Because a tankless water heater turns on when the hot water faucet is open and shuts off when closed, the energy consumed is only for the hot water being used. Again, there is no storage of water and therefore no heating and re-heating of stored water.

Manufacturers of tankless water heaters suggest that their products will result in reduced energy consumption costs and therefore lower environmental impact. They also state that if the appropriate size and number of units are installed, it is possible to have an "endless" supply of hot water. To achieve this, it is important to determine the number of sources requiring hot water at any given time (see Selecting a Tankless Water Heater on page 93).

Tankless units are available in propane (LP), natural gas or electric models. Gas-fired models have a higher hot water output than most electric models.

Cost Comparison
Conventional water heater versus tankless
Unit size for a typical four-person home with 2.5 baths, laundry, and a dishwasher

  Energy Factor Annual Cost to Operate* Unit Cost Life Expectancy
AquaStar 250SX .85 $160 $950 20 Years
50-gallon tank .62 $241 $400 12 Years
*The above charts represent approximate energy savings figures based on the U.S. Dept. of Energy test method for water heaters. The energy costs used are the 2004 averages as published by DOE — $0.91/therm for natural gas.


Conventional Water Heaters Versus Tankless Water Heaters

Conventional Water Heaters
  • Customarily installed at a central location inside the home
  • Cost range from $400 per unit, $241 annually in energy bills
  • After initial demand for heated water has been met conventional water heaters will keep the unused water heated and available for consumption
  • One storage tank normally heats water for one household and has the capacity to supply hot water for multiple uses simultaneously
  • Life expectancy of six to 15 years depending on brand, model and warranties
Tankless Water Heaters
  • Can be located at "point of use" as well as outside the home
  • Costs range from $200–$1,000 per unit; $160 annually in energy bills
  • Do not store water, but provide hot water on demand
  • Minimizes energy costs by providing hot water only when necessary
  • Can be connected in parallel to provide water for large appliances that are being used simultaneously
  • Life expectancy of 20 years which can be extended by replaceable parts

Selecting A Tankless Water Heater

To determine the appropriate size tankless heater, list the number of hot water devices expected to be open at any one time, and add up the flow rates. This is the desired flow rate for the water heater. Most tankless hot water heaters are rated for a variety of inlet water temperatures. Select the correct size unit based on the maximum amount of hot water to meet peak demand. The following assumptions on water flow for various appliances can be used to find the size of unit:

  • Faucets: 0.75 gallons (2.84 liters) to 2.5 gallons (9.46 liters) per minute.
  • Low-flow showerheads: 1.2 gallons (4.54 liters) to 2 gallons (7.57 liters) per minute.
  • Older standard shower heads: 2.5 gallons (9.46 liters) to 3.5 gallons (13.25 liters) per minute.
  • Clothes washers and dishwashers: 1 gallon (3.79 liters) to 2 gallons (7.57 liters) per minute.

As an example, assume the following conditions:

One hot water faucet open with a flow rate of 0.75 gallons (2.84 liters) per minute (gpm).

One shower head being used with a flow rate of 2.5 gallons (9.46 liters) per minute.

Add the two flow rates together. If the inlet water temperature is 50° F (10° C), the needed flow rate through the heater would need to be no greater than 3.25 gallons (12.3 liters) per minute. Faster flow rates or cooler inlet temperatures will reduce the water temperature at the most distant faucet. Using low-flow showerheads and water-conserving faucets are a good idea.


Tankless water heaters cost more than conventional storage tank-type units. Small point-of-use units that deliver 1 gallon (3.8 liters) to 2 gallons (7.6 liters) per minute sell for about $200. Larger gas-fired tankless water heaters that deliver 3 gallons (11.4 liters) to 5 gallons (19 liters) per minute cost $550–$1,000.

Tankless gas units with a standing, or constantly burning, pilot light may lose some of the savings achieved by the elimination of a storage tank. Moreover, much of the heat produced by the pilot light of a tank-type water heater heats the water in the tank; most of this heat is not used productively in a tankless unit. The exact cost of operating the pilot light will depend on the design of the heater and price of gas.

An alternative to the standing pilot light is an intermittent ignition device. This is similar to the spark ignition device on some gas kitchen ranges and ovens. Not all tankless units have this electrical device.

Life Expectancy

Most tankless water heater manufacturers suggest the units have a life expectancy of more than 20 years. Many have replaceable parts that can extend their life by many years more. Most storage tank water heaters carry a warranty of six to 15 years, and extended warranties are available.

The Pro's and Con's of Tankless Water Heaters

Whole house systems can be mounted on a wall or in a closet to save floorspace.
  • If sized appropriately, can be a constant source of hot water.
  • Installation costs are similar to tank units during new construction.
  • Electric units can be installed at the point of use.
  • Can offer reduced energy consumption.
  • Most units are small enough to be hung on a wall, saving floor space.
  • Many are designed with replaceable parts and built with such materials as copper, stainless steel, and aluminum.
  • Manufacturers advertise that their units can last in excess of 20 years.
  • Unit price and installation costs may be higher than storage tank heaters
  • Requires a minimum flow rate and pressure to activate.
  • Electric units need heavy gauge wire. Example: a 9.5kw unit must have 8ga wire and a 50amp breaker.
  • Gas units need a much larger flue pipe and gas supply than a conventional water heater.

Tankless Water Heater Product Review


The Pronto Tankless Water Heater comes in two sizes: 4.2-gallon (RTG-42PV) model and a 7.4-gallon (RTG-74) model. With low NOx emissions, oxygen depletion sensor and a self-diagnostic program this family of water heaters is designed to maximize the safety of the homeowners. This built-in safety system regulates the level of noxious gases and potential for overheating involved with running a hot water system and shuts down operations if any danger is detected. The built-in electric blower forces gas to the outside. The computerized display is built-into the RTG-42PV unit and comes as a separate, waterproof, wall-mounted remote control with the RTG-74 model.

The Pronto line indoor models can be installed horizontally or vertically and comes with an installation kit for the accompanying stainless steel vents and a 120-volt power cord. The tank comes from the factory set to a maximum temperature of 120 degrees F. If the water heater needs to be installed at an altitude above 3,280 feet a high altitude chip is required.


The T-H1 is the newest tankless water heater for Takagi. This model operates on a pre-heating system and a built-in neutralizer. The pre-heating system has a dual heat-exchange that heats the water in a two-step process thereby making the T-H1 capable of delivering 10.5 gallons of hot water per minute.

The neutralizing system is comprised of a condensation collector and a neutralizer. The condensation collector captures the exhaust and the neutralizer softens the condensation water. This process reduces the wear on the pipe system and allows for a longer unit lifespan.

The T-H1 weighs 92 pounds and can be wall-mounted indoors or outdoors. The dual heat exchange gives it a thermal rating of 94% for natural gas and liquid propane. In addition, it has low emissions of CO2 and NOx gases. Takagi products are manufactured with copper and brass water ways, stainless steel burners and rust resistant epoxy powder coatings. The T-H1 should be installed by a licensed plumber.


The RA-28 tankless water heater is as compact as a briefcase and yet capable of providing enough hot water for the whole house. Rated at 99.3% efficiency this water heater can provide continuous hot water at 120° Fahrenheit. Based on Seisco's water-heating chamber modules, the water is heated as it flows through each tube of the chamber. These chambers house the heating elements and are made of DuPont Zytel nylon resin.


This multiple point-of-use, gas-fired water heater can deliver hot water to multiple outlets at once without any variation in temperature. The compact, wall-mounted unit can be set to operate at the exact temperature the homeowner desires with its programmable digital control pad. The temperature is regulated by a feedback sensory system that constantly adjusts the fully modulating gas valve to deliver consistent water temperature for the duration of use. The Rinnai tankless water heater requires installation by a Rinnai Certified Installer and can be mounted on the interior and exterior of the home. Indoor installation requires no indoor make-up air and vents directly to the atmosphere. Outdoors, the water heater can be installed in a recessed box and decorated to match the exterior façade of the home. It has a life expectancy of 25 years.

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