Tankless water heaters have been used in Europe and Asia for 50 years, and they are gaining popularity in the US. Right now they represent about 8% of new sales in the US. Tankless heaters, also called on-demand, flash or instant water heaters, qualify for a $300 federal tax credit.

How efficient are tankless water heaters?

Tankless water heater are about 10%-20% more efficient than tanked heaters, depending on circumstances. The problem with tanks is that heat leaks out of the tank, and the heater has to constantly reheat the water, 24 hours a day.

Tankless water heaters are available in propane (LP), natural gas, or electric models. They come in a variety of sizes for different applications, such as a whole-house water heater, a hot water source for a remote bathroom or hot tub, or as a boiler to provide hot water for a home heating system. They can also be used as a booster for dishwashers, washing machines, and a solar or wood-fired domestic hot water system.

Some statistics: Water heating accounts for 20%-25% of an average household’s annual energy use. The American Council for an Energy-Efficient Economy determined that total cost for a tankless water heaters is less than for standard water heaters over a 13-year period. The U.S. Department of Energy site states that you can save up to 30% of the energy you currently use with a tank heater. But the American Council for an Energy-Efficient Economy says to expect only a 10%-15% reduction in water heating energy used.

Gas-powered tankless water heaters are the most efficient, but are the most difficult to install and require venting.

Electric tankless water heaters are somewhat more efficient than tank electric heaters (about 8% more efficient), but are generally less efficient than gas-heated tank water heaters. Since electric tankless heaters are less powerful, their flow rates are generally limited to 1-3 GPM. Point-of-use electric heaters (see the WaiWela mini heaters below) are great for a remote faucet or bathroom where usage is minimal and the flow rate is small.

However, when comparing water heaters, a number of factors have to be weighed: the cost of installation, how hot you like your water, the number of people in your household, and the cost of gas and electricity in your area.

Let’s quickly review the advantages and disadvantages of tankless water heaters:

Advantages:

Uses less energy (eliminates heat loss in tanks and through pipes)

Continuous hot water (hot water doesn’t run out)

Long life-span (20 years versus 13 for a tank heater)

Compact size

Disadvantages:

Some tankless heaters have difficulty coping with large households

More expensive than tank water heaters

Owners may wait longer for hot water to arrive at a faucet (depending on installation)

With tankless water heaters, there is a short delay between the time when the water begins flowing and when the heater’s flow detector activates the heating elements or gas burner. In the case of continuous use applications (showers, baths, washing machine) this is not an issue. However, for intermittent use applications (for example when a hot water faucet is turned on and off repeatedly) this can result in periods of hot water, then some small amount of cold water as the heater activates, followed quickly by hot water again.

Installing a tankless system comes at an increased cost, particularly in retrofit applications. They tend to be particularly expensive in areas such as the US where they are not dominant, compared to the established tank design. If a storage water heater is being replaced with a tankless one, the size of the electrical wiring or gas pipeline may have to be increased to handle the load and the existing vent pipe may have to be replaced, possibly adding expense to the retrofit installation.

Here is a round-up of the best tankless water heaters:

Takagi T-K3 Tankless Water Heater

Takagi heaters were the first tankless water heaters available in North America, and they’ve been manufactured in Japan since 1946. Their current indoor model, the Takagi Flash T-K3 delivers 258 gallons per hour of hot water every hour.

It’s capable of handling water flows ranging from 0.5 – 7.0 gallons per minute, with heating capability of 11,000 to 199,000 BTU (the widest range on the market). It’s all controlled by a computer board and sensors checking for flow, temperature and demand.

The only complaints about Takagi heater we’ve seen are the same as those about tankless water heaters in general– that it takes a while for hot water to flow, and that flow rate is reduced when inlet water is cold, or when many people are using the hot water at once.

The Takagi Mobius model is capable of producing a rate of flow approaching 10 GPM, making it ideal for central water heating. You can link up to 20 Mobius units together using one main control system. Note that with most gas-supplied demand heaters, significant input BTU is required to ensure proper and safe operation

You can find Takagi heaters at Amazon and Low Energy Systems.

Stiebel Eltron Tankless Water Heaters

The Stiebel Eltron company was established in Germany in 1924, and they’ve been selling their quality heaters in the US since 1980.

Like Takagi’s heaters, Stiebel Eltron’s gas or propane tankless water heaters are equipped with temperature sensors that continuously monitor the incoming and outgoing water temperatures, and the temperatures can be controlled to within one degree by using the digital controls provided.

Stiebel Eltron heaters are warranted for three years, and sell for about $700-$800.

Stiebel Eltron heaters are available from Low Energy Systems and Amazon.

Paloma Tankless Water Heaters

Paloma began operation in 1911 in Japan, and they are a major gas appliance company in Japan. The Paloma Group also owns the US company Rheem.

Paloma makes large capacity heaters, which can serve large households and even small businesses. They work well in homes with low-pressure, or in homes where there no electrical power or intermittent power. For example, the Paloma 28c model is said to be able to serve “the needs of a small restaurant kitchen, a school shower facility, or a large National Guard training base”.



Paloma claims to have unique safety features built into their heaters. All of Paloma’s indoor tankless water heater models are equipped with a system to monitor and correct combustion conditions that could lead to carbon monoxide production. These models are also equipped with an Overheat Limiter Film Wrap designed to detect overheating all around the heat exchanger.

Paloma heaters are available from Low Energy Systems.



WaiWela Mini Instant Water Heaters

Waiwela heaters are made by Paloma. They are compact electric heaters which actually contain a small tank. These point-of-use heaters are usually installed under a sink. They plug into a regular 120V household electric socket, and provide instant hot water, thus saving water because you don’t wait for the hot water.

There are two models available: 2.5 gallon Waiwela, and 4 gallon Waiwela. Both are 110 VAC, UL approved, and they are warrantied for six years.

They are available from Low Energy Systems.



Solar Water Heating and Tankless Heaters

What would be the most efficient way of heating water? Using direct solar water heating, in combination with another renewable source such as wood and biomass (cleanly burnt), and biogas. Biogas can be used in a LP gas water heater, but it is not commonly available in the US.

A solar water heater can reduce your hot water heating bill by 60 to 95 percent, potentially saving hundreds of dollars a year. However, upfront and installation costs can be high, anywhere from $1,500 to $5,000, although there are federal tax credits available.

A tankless heater will also work as a backup, as long as it is designed to accept hot-water input (not all of them are).