Tankless Water Heater

Since I moved in 10 years ago my water heater has been old (it was made in 1980). And yet it continues to last and get older. For a while I considered a solar water heater. I have a south-facing roof right above where the water heater is. But solar systems are very expensive and complicated. Years ago I priced out a system that was $2000 including two solar panels, pump, and a heat exchanger to heat water using hot antifreeze from the solar collector (you can heat the water directly but have to remember to drain the solar collectors any night it will go below freezing). You also need an 80-gallon water tank, which was not included. That would never pay for itself and, on top of that, there was no guarantee you would always have hot water. And the time you really need it, in the morning, is the time you have the least of it. So you still end up buying a backup system.


So I ruled that out. Now my water heater is older and I’m thinking about replacements again. Getting the new very efficient refrigerator made me think about what I could accomplish with a really efficient water heater.

I looked for Energy Star water heaters, but they don’t seem to make such a thing. However, I did find out about a federal tax credit of $300 if you purchase a super-efficient tankless water heater. Tankless systems heat water as you need it (they are also called on demand water heaters). They can be electric, but they have high-powered gas ones that use tons of heat to heat the water as you need it rather than slowly heating water over time and storing it for later. Since about the only hot water I use all day is in the morning when I take a shower, I thought I should be the perfect user for such a system. That way I wouldn’t have 40 gallons of hot water sitting around all day just going cold. One advantage of tankless systems is you never run out of hot water.

I save energy by setting my water heater very low. When I take a shower, I am using just a little or even no cold water and all the rest hot. Heat loss from the tank is proportional to the difference in temperature between the outside and the inside of the tank. If it is 75 degrees outside the tank and 110 degrees inside the tank, then delta T is 35 degrees. I lose half as much heat as if I kept the water at 145 degrees. I think the low temperature has also made the water heater last longer, plus the low use.

Anyway, I use about 10 therms of natural gas a month in the summer (almost all for hot water since I don’t do that much cooking) and gas is costing me about $1.00 per therm. So my water heating bill is $10 per month. This is why I could never make the economics of the solar water heater work out. And the tankless system isn’t much different. A system costs about $1000 plus at least $500 for installation (the tankless system requires a larger gas supply line and exhaust vent too) vs. a conventional water heater which would run about $400 and can be installed by myself. Even after the tax break and saving half of my gas (only $5 per month) it would take about 20 years to pay itself off.

In fact, I found a website where a guy had installed a very expensive system consisting of 4 different heaters (two gas and two smaller electric ones). He has a calculator that I used to determine that a tankless system would take 38 years to pay itself off. I’m not sure if he included the cost of 3 water heater tanks you would go through in that time or not, but the tankless systems themselves only last 20 years. So 38 is no go.

My water heater still has the original Energy Guide sticker which indicates it would use 319 a year in normal use (obviously I’m using a lot less). This compares with a very efficient new model which uses 238 therms per year. I think if I flushed the water heater (which I’ve never done), I could make it last even longer.

2 thoughts on “Tankless Water Heater

  1. Ted, that was an in depth research on water heaters, even though it gave me a headache reading it. Mom wants us to get a new a/c and furnace. If you can do a similar research on them and determine we don’t need new ones I’ll give you six beers of your choosing. Love, Dad

  2. My furnace is really old too. I think the AC was added later, again probably around 1980. I had a repairman come out one time and he said the AC wasn’t bad. I spend more heating the house ($400/yr) than cooling it ($250/yr) so I can save more money getting a better furnace than a better air conditioner. I looked into the different systems a while back. Again, you can spend a ton of money on getting something very efficient, but it may never pay itself off. Getting a heat pump with a backup gas furnace seems to be the most efficient. And getting the right size system for your house is also very important. Some of the AC units have two compressors, one big and one little, and they will run the little one most of the time and the big one when you really need it. Then at the worst times they can run both.

Leave a Reply

Your email address will not be published. Required fields are marked *