Are Tankless Hot Water Heaters More Energy Efficient? Saving The Earth Is A Tankless Job

Dear EarthTalk: I’ve heard that tankless water heaters are more energy efficient than traditional water heaters. How do they work?

—Felipe Gomez, Flagstaff, AZ

In a conventional water heater, 30 to 60 gallons of water sit in the tank, constantly being heated and re-heated, even when no hot water is in use. The heat from the tank keeps dissipating into the air, creating “standby heat loss.” This constant energy waste adds up, and can constitute 10 to 20 percent of a household’s heating costs.

tankless hot water heater
Credit: Bart Everson, FlickrCC

Unlike traditional water heaters, tankless water heaters (also known as demand or instantaneous water heaters) heat the water only as it is used, thus eliminating standby heat loss and minimizing energy usage. Cold water travels through a pipe to the unit, where it passes over a gas or electric heating element in a thin enclosure. This exposes a lot of the water’s surface to the heating element, thus enabling it to heat up quickly. The element only operates when the hot water faucet is turned on. These heaters are also small and thus space saving, and can be attached to a wall or put under the sink or in a closet.

First put into widespread use in Japan and Europe, tankless water heaters began appearing in the U.S. about 25 years ago. While they do cost more than double the price of conventional water heaters—top-of-the line, high-capacity residential tankless models sell for up to $1,000—a typical tankless unit lasts more than 20 years, compared to the 10-year life expectancy of a conventional water heater, according to the Energy Efficiency and Renewable Energy Office of the U.S. Department of Energy. Also, consumers can quickly make up the difference through energy savings.

While a constant supply of hot water is available through a tankless system, the flow rate may be somewhat limited, depending upon the needs of your household. Typically, a tankless water heater provides a flow of two to four gallons per minute. As with many tank heaters, simultaneous use of hot water appliances can affect the flow rate. Water-hungry appliances like dishwashers and washing machines may need to be operated at separate times. Alternatively, a second water heater can be installed at a high-demand location. Gas-fired heaters tend to have higher flow rates and are less expensive than electric models. Leading tankless water heater manufacturers include Bosch, PowerStar and Ariston, and the units are available at most big appliance and home superstores as well as online.