Tankless water heaters v. Storage tank water heaters

Tankless water heaters v. Storage tank water heatersIn the United States, most homes have storage tank water heaters. The tank typically stores between 30 and 50 gallons, but you can find larger or smaller tanks, depending on your application. Storage tank water heaters are responsible for about 17% of a home’s annual energy usage. In terms of energy consumption, it’s one of the major players in your home.

For years, statistics showed that heating comprised the majority –more than half – of a home’s annual energy usage. With the move toward high efficiency, heating now consumes about 40% of a home’s annual energy consumption. Appliances, water heaters and air conditioning combined have become the major consumers.

Targeting older appliances and fixtures will help reduce your energy costs, and the water heater is a pretty juicy target. But should you go for a tankless water heater? Can you still save money with a tank?

The pros and cons of tankless water heaters

A tankless water heater provides instant hot water, if you can be a little flexible about your definition of “instant.” Instead of storing pre-heated water for use “on-demand,” a tankless water heater creates hot water only when you need it. Some “tankless” water heaters have a tiny tank that holds a small amount of pre-heated water to minimize the “cold water sandwich.” Many tankless water heaters, however, just heat water when you open a hot water tap. The cold water that remains in the pipe is flushed out and soon enough, you’re getting “endless” hot water.

The rating for a tankless water heater shows the number of gallons per minute the water heater can provide. Higher capacity tankless heaters can supply 9 or more gallons per minute of hot water. That’s clearly enough for a shower – which might only take 2.5 gallons per minute of hot-and-cold water mixed. If your shower routinely competes with a dishwasher, a washing machine or another bathroom, the higher capacity water heater may be needed.

The bottom line on tankless water heaters

If you use less than 40 gallons of hot water per day, you can save money with a tankless water heater, but there are some conditions involved! Tankless water heaters are more expensive to buy than a conventional storage tank water heater is – by about a factor of two. You’ll pay twice as much for a tankless water heater, and the installation costs will be higher. Tankless water heaters require a larger gas (or electric) service, so you may need to do some retrofitting of your existing gas or electricity service to supply a tankless water heater.

The good news is that a tankless water heater will last about two to two-and-a-half times as long as a storage tank water heater. Since they’re wall-mounted, you’ll recover the space that your storage tank water heater currently takes up. Another potential positive – they can be mounted on the outside wall of the home.

In terms of operating costs, a tankless water heater can save you between one-quarter and one-third of what you’d spend on keeping stored water hot. Your savings would depend on how much hot water you use in a day. The more hot water you use daily, the less you’ll save. If your household consumes a lot of hot water every day -60 to 80 gallons – you would reduce your savings to 10%-15%.

The pros and cons of storage tank water heaters

Storage tank water heaters aren’t particularly efficient. The tank loses heat in a number of ways. Combustion losses can reduce your tank’s efficiency by 15% or more. Standby losses – heat escaping through the tank walls – reduces efficiency by 30% or more. Transmission losses – heat escaping through the pipes –may reduce your efficiency by another 10%. By the time your hot water exits a tap, you might get only 40%-50% of what you paid for.

Residential storage tank water heaters have a rated life of between 6 and 12 years. You’ll replace your storage tank water heater twice during the lifetime of a tankless water heater. That gives the tankless heater a cost advantage over a storage tank water heater.

Another negative for storage tank water heaters is that they don’t “fail pretty.” Mineral deposits inside the tank can cause uneven heating, overheating, smelly water and noisy operation. A failing hot water tank can discharge rusty water or leak. Any of these signs indicates an impending tank failure. Don’t ignore them!

On the positive side, a storage tank water heater is the cheapest way to provide a source of heated water in terms of immediate, out-of-pocket costs. 40-gallon storage tank water heaters are widely available, relatively inexpensive and can be installed in a day with limited need to modify an existing gas or electrical service. Your operating costs will be higher and your tank may have a shortened life cycle, but if you need hot water today – a storage tank water heater is still a respectable option.

If you’d like more information about tankless water heaters, storage tank water heaters or other water heating options, please give us a call at Boston Standard Company at (617) 288-2911 and we can help you choose the best option for your home.

Photo Credit: Alan Levine, via Flickr.com