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Tankless Water Heaters – Tips from The Home Inspector

Tankless Water Heaters – Tips from The Home Inspector

Tips from the Home Inspector ~ Tankless Water Heaters

Tank or Tankless?

Tankless water heaters (or on-demand water heaters) provide hot water when and where it’s needed without the need for a storage tank. Tankless water heaters are not new, they have been available for years and have been more popular in Europe than in the U.S. Tankless systems can be powered by electricity, gas, or propane and may decrease water-heating bills by ten to twenty percent. The savings occur because heated water does not sit unused in a tank.

In a tankless system, water is warmed only when needed. Tankless water systems also save space because they can often fit in a closet or under a sink. The size of the system will be determined by how much demand is placed on it.

Demand is calculated by estimating how much hot water a family will use during its busiest hour. This figure is called “first hour rating.”tankless water heater

It is determined by factoring in the number of bathrooms and bedrooms in a home, as well as the number of people living in it. A home with 2 1/2 bathrooms, 3 to 4 bedrooms and 4 or more people sharing the home will have a “first hour rating” of 60 to 72.

A home’s “first hour rating” can then be matched to the same rating on the EnergyGuide of the hot water heating system.

Tankless Water Heater

The EnergyGuide is a large yellow sticker that, by law, must appear on water heaters and other appliances. On hot water heaters, the sticker will compare the average yearly operating costs of different water heaters, using the same criteria for all models tested. It will enumerate the system that will cost the least to run. The highest savings will come when choosing a model with a “first hour rating” closest to the capacity needed.

There is also a large number in the center of the EnergyGuide. That’s the estimated cost of energy needed to operate the water heater for one year. EnergyGuide labels are designed to make comparison shopping easier.

A tankless water heater can supplement a regular water heater in a distant location, or it can be used for all hot water needs in the home. But it may not be appropriate for all applications. In some cases, the savings in energy and money may be negligible.

Heating Water

Some residential-sized, gas-fired models currently on the market supply only five gallons of water heated by 90 degrees per minute, which may be serviceable for a family of two. It might not satisfy the needs of a larger group doing laundry and washing dishes at the same time.

And electrically heated models provide even less hot water than gas models – more like two gallons a minute, heated 70 degrees. And if the power goes out, take your hot shower within a few hours, because the tank will stay warm only for a short time. After that, the electronic model will provide an unsatisfactory “no more” hot water, which is another factor to keep in mind. In most cases, electric tankless water heaters will cost more to operate than gas tankless water heaters.

Tankless water heaters generally use between 24- and 34-percent less energy than traditional water heaters. The more people in a family, the more taxing the hot water needs and the less money saved. That’s why people often buy more than one tankless water heater. The more spent, the less the savings.Tankless Water Heaters

Another benefit of a tankless system is length of equipment life. It is typically longer than tank-type heaters because they are less subject to corrosion. Expected life of a tankless water heaters is 20 years, compared to 10 to 15 years for tank-type water heaters.

Tankless water heaters range in price from $200 for a small under-sink unit up to $1000 for a gas-fired unit that delivers 5 gallons per minute. Typically, the more hot water the unit produces, the higher the cost.

Tax Breaks and Rebates

A tax credit was available for energy efficient tankless systems, but has expired. Be sure to check for State tax credits for energy-efficient appliances and renovations.

There are often rebates from the various brands, so be sure to check. Currently running from June 1 through September 30, 2014, Rinnai is offering up to $100 in rebates for certain energy-saving Rinnai Propane-fired products.

For Frederick Maryland Residents, Allegheny Power has a rebate program for energy efficient appliances. Baltimore Gas & Electric Company, Choptank Electric Cooperative, and Pepco also have a rebate program, and most counties have programs.

Visit for more details.

**FYI – Solar Water Heaters have a tax credit that is in place until 12/31/2016

 *  * Image Credit: Everything You Need to Know About Tankless Water Heaters

A guest post from:

David Goldberg –  Home Inspector

fax:  301-774-4554 
Reliable Home Services, Inc.
PO Box 5159
Laytonsville, MD 20882
ASHI Member #101584
MD License #29322

If You have a remodeling project in mind,  for a list of professionals we’re proud to recommend.  

The Highland Group
Chris & Karen Highland

4 Responses to Tankless Water Heaters – Tips from The Home Inspector

  1. Thanks Andrew. Our home inspector is great at explaining things. We’ve been recommending him for 21 years and still haven’t run into anyone as good. He’s a great resource for us to have.

  2. […] Water Heater:  the third largest home energy expense.  A tankless heater (this blog post) costs about $800 – $1200 uninstalled, and will save you 50% in operating costs.  A solar […]

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