In Buyer and Seller

As luck would have it, my 8-year-old hot water heater burst just two days before I was leaving town for the holidays. Gallons of water flooded my basement. Fortunately, the basement is unfinished and we rarely use it for storage. I was faced with the decision: should I replace the hot water heater with a traditional tank, or was it time to upgrade to a tankless? I began to do some research.

A traditional water heater typically holds forty to sixty gallons of water that is collected in a tank and then continuously heated until needed. Hot water is therefore readily available, but it comes at the expense of using significant energy in the process.

Meanwhile, a tankless water heater is significantly smaller because, as the name implies, it does not actually have a tank. Instead, it heats water as it needed before piping it to your shower, faucet, or appliance. Because water is only heated when needed, it uses much less power. By some estimates, a tankless hot water heater uses twenty-two percent less energy than a traditional water heater.

The cost savings from using less energy are offset by a tankless water heater’s higher initial costs. While a traditional tank costs anywhere from $300 to $650, a tankless water heater usually costs at least $700. A number of state and federal tax rebates exist for energy efficient appliances and virtually all tankless hot water heaters qualify. Energy companies also offer incentives and discounts, so it is important to do some research in advance.

That said, even with rebates and discounts, tankless water heaters can be pricey. The installation process is not only more time consuming but fewer plumbers do so, allowing those that do to charge higher rates. Finally, tankless systems are powered by gas heat. If your home does not have a gas connection already, the cost of making his connection far outweighs the cost savings of a tankless system. Tankless heaters also require more energy when heating water, so often existing gas lines need to be upgraded to a bigger pipe during the installation process, adding additional cost to those who already have gas heat as well.

Some consider the upfront costs a worthwhile investment, because tankless hot water heaters can last up to twenty years, whereas the typical hot water heater lasts only about eight to ten years, as I learned just recently. If you plan on staying in your home for a while, then tankless is a great option.

Tankless is also a good option for those who are in tight living quarters and need additional space. The wall-mounted tankless units use only a fraction of the space of a traditional hot water heater

A few other considerations:

It takes longer to get warm water out of a tankless hot water heater, so if you are always rushing to and from, then this may frustrate you. Depending on where the tankless unit is physically located and where the water source is that you are tapping in to, it can take up to two minutes to get hot water to the outflow. This is particularly true in cold weather locations; the tankless unit heats water as it comes in from the ground so the colder the water is to begin with, the longer it will take to heat.

Tankless water heaters also have limited output. If you have a large family and everyone needs to shower at the same time, or if you want to shower, do laundry, and run the dishwasher at the same time, then a tankless water heater presents a challenge. Tankless units can only supply a few gallons of hot water at a time.

Want to know more? Visit my website at for more details. Get to your home improvement store and get to work today, because the power is now!

Eric Lawrence Frazier, MBA

President and CEO

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