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Tankless Water heater economics

Tankless water heaters save on energy but are no better at conserving water than the conventional tank heaters as it takes as long or longer for the hot water to reach the taps. To remedy this you can install a whole house circulating pump to give "on-demand" hot water. My question: Does the additional cost of installing the circulating pump system with the tankless water heater and the additional operating cost make sense ecomonically (also consider water conservation)? Or should the circulating pump be installed with a conventional tank heater. I am looking to replace my existing tank water heater that is 15+ years old. I'm heating the water with natural gas. I'm seeking advice.

Re: Tankless Water heater economics

The economics of a tankless water heater is that it uses no energy when it is not supplying hot water. With a circulating pump it would have to be on most of the time or there would be no hot water to circulate. To cut down on water usage you place the tankless near to use point.

Re: Tankless Water heater economics

I answered your post to quickly. You could use a demand type recirc pump with a tank-less water heater. Something like http://www.chilipepperapp.com/Default.htm


Re: Tankless Water heater economics

As someone who recently put in a tankless heater, I want to add my feedback.

First, don't be fooled by the standby loss of a tank type heater. In reality, well insulated tank heaters lose very little heat. I have seen figures where the amount of heat lost to standby comes in around $50 per year.

Second, the economy of a tankless water heater is that they are more efficient at transfering heat to the water, with most coming in around 82% or so. Condensing tankless heaters such as the Bosch GWH 800C are even more efficient at around 94%. In comparison, a standard tank heater would be around 60-70%.

Third, beware of tankless heaters if your ground water is cold. They are all rated in GPM flow at a certain temperature rise. If your ground water is 50-60°F, a tankless heater will have a much easier time raising it to the 120°F needed. If, like me, the groundwater is closer to 40°F, you will have a hard time with flow from the tankless heater. I am lucky to get 4GPM with my cold ground water, which sounds like a lot but in reality I can not run the bathtub and washing machine at the same time without the tankless heater restricting water flow.

OK, so what is my advice. Well, I kind of regret installing a tankless heater for two reasons. First, as I said my ground water is cold, so even with the largest household tankless heater I could get (199,000BTU) I can not really run more than one large (tub, washing machine) or two small water draws at once (shower, sink). Second, the price to install is very very high compared to a tank heater - I paid almost $2700. Even with the government grant I am getting for switching, it is doubtful that the tankless heater will ever pay for itself in the 20 year lifespan they are given. The actual cost of the heater was not too bad (I got a Bosch 2700ES for about $1100) but the installation costs are huge. I had to get a dedicated 1" gas line run from my meter, and the stainless steel vent piping alone was about $800.

If I had to do it all over again, I would likely have just switched to a power vented tank.

So, as someone who owns one, let me give you my opinion on the benefits/drawbacks of each type:

Tank water heater:
Allows as much flow as the pipes will handle
Shorter time to get hot water from the taps
Easier to install a recirculating pump for long water lines
Has no issues with cold ground water
With a good quality tank properly sized and with a good recovery time, running out of hot water will be unlikely
Has some standby loss
Takes up a lot of room
Easier to vent - chimney vent or power vent options
Short life span (5-10 years)
Cheaper to install, requires smaller natural gas pipe
Hot water even if the power is out

Tankless water heater:
Smaller, mounts on the wall
Never runs out of hot water
Longer lifespan (20 years)
Requires A/C power to get hot water (no hot water in a blackout)
Has issues with flow rate if ground water is cold
Cost is 2-3X that of a tank type heater
Requires expensive stainless steel exhaust pipe
Requires significant amount of natural gas volume (likely a larger pipe than what was originally in your house)
10-15 second lag time to get hot water from the taps, and if you shut off the hot and then turn it back on, you get a shot of cold water again.
Venting options are limited, and venting distance can be an issue.

I could go on, but those are the general ones of the top of my head.

Now I did mention the stainless steel vent pipe because it is REALLY expensive. Some tankless heaters have special pipe which has intake and exhaust together, and it costs a lot too, but the nice thing is it is just one hole in your house.

My last point (I am dragging this out I know) is that IF I was to go for a tankless heater again, it would have been the Bosch Condensing model. The cost is higher, but with 94% efficiency, at the same 199,000BTU input the flow rate is quite a bit higher than the standard 2700ES. Also, the condensing model can vent out of PVC pipe rather than stainless steel, because the exhaust temperatures are much much lower. This alone would have paid the difference on the 2700ES to the GWH 800C in my case (I had to vent about 20' from where the tankless was located). Seriously consider the condensing model if you are looking at a whole house tankless heater. PVC pipe is much much much cheaper, and easier to find and work with.

Re: Tankless Water heater economics

Varun, A very well written and informative post.

Re: Tankless Water heater economics

I have to agree with Varun about various aspects pertaining to the tankless or "on demand" water heaters. (I was a general handyman for 20+ years.)

Water flow can restricted if the source (cold) water is cold.

If more than one faucet is turned on (for hot) at the same time the flow (of hot) water is reduced. This could have an effect upon a person taking a shower. If a kitchen hot tap was turned on at same time then the shower water could turn warm or cold as a result.

It still can take a while to get hot water to the actual faucet if it is a distance away.

If electric power fails then there is also no hot water, whereas with a tank-type water heater it doesn't matter if you have A/C power or not.

Comparing the usage of gas for a tankless the difference is not that great (in my opinion) considering the inconveniences of "effect" when another hot tap is turned on, the reduction of flow, and the lack of hot water when there is no electric power.

In my opinion if a standard hot water heater is installed properly and with good insulation, is drained periodically of sediment in the tank, and hot water lines are insulated, then the usage of gas to "top up" the temperature when not in use should be negligible.

Lifetime and costs considered between a tank or a tankless water heater, I would still have to say that overall cost would be less for the standard tank properly installed and maintained.

I also find it a shame that manufacturers of tankless don't want it mentioned that flow is reduced, or no hot water upon electric failure.

Re: Tankless Water heater economics

There is at least one tankless manufacturer (Bosch) that makes a unit with a self contained ignition system. There is a very small generator that uses the incoming water flow to generate the spark to ignite a flame.


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