When I first heard of "tankless" water heaters my first reaction was "too good to be true". What a tankless system claims to do is cut your energy costs. It does this by eliminating the tank and therefore the necessity to keep reheating the water in the tank because of inevitable heat loss. No tank, no heat loss, no wasted energy.
Sounds good, but like I said, almost too good to be true.
Nevertheless the tankless idea has a certain appeal. Like most homeowners I am interested in anything that might save money. But maybe even more important, the tankless water heater has a certain "gadget appeal". Most guys are impressed with gadgets and I am no exception. The gadget in this case is the heating unit that can actually pull off this miracle. You send cold water in one end, and out the other end comes hot water. Now that's a gadget worth considering.
Whether or not this particular gadget actually works, you have to admit that the big old water tank heater is completely lacking in gadget appeal. These things have been around for, what, 50, 75, 100 years, and are basically the same as when you first saw one. They're not really the kind of thing you brag about to your buddies - "Hey come on down and have a look at my new 75 gallon water heater..."
So that in itself is a good reason to consider installing a new whiz bang high tech tankless heater.
But do tankless water heaters actually deliver what they claim? Can they actually provide enough hot water for your requirements? Will they use less energy? Will you save money over the medium or long term? Or is this just another one of those green technologies that costs more than it's worth.
Tankless water heaters have a couple of advantages. They may save you money in the long run because they actually do use less energy than traditional heaters. They also have a smaller physical "footprint" so you don't need a basement area or closet dedicated to that big honkin tank. Sometimes that is important. You normally hang these units on the wall.
But the disadvantages are significant. First, they cost more. A lot more. According to a Consumer Report of October 2008, the typical cost of a tankless system is between $800 and $1200, compared to about $300 to $500 for a tanker. That's at least $500 more up front.
Then there's the cost of installation. According to the same report, a tankless system costs about $1200 to install, as compared to about $300 for the tanker. That's another $900 up front.
Then there's maintenance. A traditional system should be de-calcified every few years, depending on the hardness of your water. But with a tankless system this is a constant concern. Scale build-up is much more of an issue because it is deposited on the inside of relatively small valves and connectors within the system.
If you gum up a tankless system it will stop working efficiently and you will have to replace expensive parts. So regular maintenance is required every year, again, depending on the hardness of your water. And in order to keep it running properly you may be forced to install a water softener. Add at least another $50-$100 per year.
Suddenly the projected savings from a tankless system start to disappear. Consumer Reports estimates the raw energy savings at about 22% a year, which translates into much less than $100 per year (actually they put it at between $70 and $80 per year), depending on your usage.
According to their estimates, once you factor in additional maintenance costs it would take about 22 years to break even on a tankless system. That's longer than the life expectancy of the system. With new advancements in technology you'll probably be replacing it well before that.
Of course money isn't everything. Most home owners routinely drop thousands of dollars on things that have no (or very little) economic payback at all - swimming pools, hot tubs, expensive furniture, big screen TVs, landscaping... you name it.
So if you think installing a tankless hot water heater will help you do your bit to "save the world", then go for it. Just don't be surprised if you realize one day that you probably could have done more to save the world by simply using less hot water.