I’m willing to make an
investment in a tankless water heater, but not until someone
convinces me that I’ll save on my energy bills and have adequate hot
water. What’s the real scoop on these?
Tankless water heaters use 30 to 50 percent less energy than units
with tanks, saving a typical family about $100 or more per year,
depending on water usage. Tankless units (also called “on demand”
units) heat water only when you turn on the faucet. They usually
operate on natural gas or propane. The main advantage is that they
eliminate the extra cost of keeping 40 to 50 gallons of water hot in
a storage tank, so you waste less energy. They also offer a
continuous supply of hot water, which is ideal for filling a big hot
tub or a whirlpool. They’re more compact than a standard water
heater and mount on a wall.
The primary disadvantage is the upfront cost. The smaller units ($500) that you often see won’t produce enough hot water to serve most households. They’ll only serve one faucet at a time—a problem if you want to shower while the dishwasher is running. Larger units that can handle the demand of a whole family run $1,000 and up. (Regular tank water heaters cost $300 to $500, and they last 10 to 12 years, compared with 20 years for a tankless unit.)
But because tankless units have high-powered burners, they also have special venting requirements (a dedicated, sealed vent system, which requires professional installation). Natural gas burners often need a larger diameter gas pipe, which could easily add $500 to $1,000 to the initial installation cost.
