Tank vs. Tankless Water Heaters: The War Rages On

Jul 12, 2007 |  by  |  Craftsman Archives  |  Share

tankvstankless Tank vs. Tankless Water Heaters: The War Rages OnAs part of my research for building our Craftsman dream home, I’ve been on a mission to investigate many of the structural and functional pieces that may go into the home. The first of these things was a tankless water heater and all I can say is wow, man. Just when you think you’ve got something figured out you get smacked in the face like a wicked stepchild. I sincerely thought that tankless water heaters were the way to go – supposedly they use less energy compared to the standard storage tank water heater, which is both good for the environment and for my pocketbook. With the average household water usage being close to 65 gallons per day (even higher for families of four or more) and with water heating accounting for up to one-third of home energy costs, clearly a more efficient system, like manufacturers of tankless water heaters claim to produce, would be worth investing in, right? I mean in August of last year the author of the Free Money Finance Blog even took the time to analyze the numbers:

Right from the start, the tankless water heater looks like a great deal. It could cost up to $2,000 at most ($1,000 for the unit and $1,000 for installation), but it saves you $2,000 as well ($100 a year for 20 years). It pays for itself! It seems like a no-brainer at this point. The above numbers reflect the worst-case scenario.

Let’s assume a best-case scenario. Let’s say the tankless water heater costs $1,000 and it’s only $500 to install. And let’s say it saves you $125 per year (the piece does say it saves about $100 or MORE). Finally, let’s assume you get the $300 tax credit on the unit (that’s $300 savings because it’s a credit, not a deduction). In this case, the unit costs $1,200 ($1,000 + $500 – $300) and saves you $2,500 ($125 x 20 years) for a financial GAIN of $1,300. Not bad.

Sounds pretty good right? Makes you want to run out and throw one of those bad boys on your Mastercard or Visa doesn’t it? Well, just hold your horses, Lone Ranger. Because then I read this “controversial” article from Tim Carter at Ask The Builder, which explained why tankless water heaters may not be as efficient as many people think. Now his argument that “some people who buy a tankless water heater end up using more hot water and fuel since the heater never runs out of hot water” doesn’t really apply to me. I mean come on, in a conventional shower (not the 6-headed, spray-every-crack-in -your-body kind) fed by a storage tank water heater, you can take a long ass steaming hot shower until you’ve got skin like Wilford Brimley before the heat runs out. I know. I’ve done it. So if I knew that I could have an endless hot water shower, would I? If I was looking for a way to get a couple of paramedics to haul my naked body away on a stretcher, then maybe. Aside from that argument, Tim does makes an interesting point about the realistic capacity of a tankless heater:

A typical tankless heater with a 165,000 Btu burner can raise the water temperature to 110F and deliver 3.8 gallons per minute of this heated water indefinitely…A code approved typical shower faucet will deliver 2.5 gallons of water per minute. A typical kitchen sink faucet will discharge 2.0 gallons of water per minute. Do the math and you can see that these two common fixtures have exceeded the capacity of the tankless heater.

Also, it’s important to note that the average shower temp for most folks is 115-120F, which is higher than the 110F the tankless heater delivers.

He also provides some credible evidence against the efficiency of tankless heaters:

That month [July] the cost of natural gas in my city [in the Midwest] was 53.4 cents for each 100 cubic feet of gas consumed. My family used 2,400 cubic feet of gas last July. Most of it went to my traditional storage tank water heater, some went to our gas range that was used each day to cook and the remainder went to our gas clothes dryer. I estimate that it cost me approximately 37 cents per day to provide hot water for my family of five and we rarely run out of hot water.

On average, hot water runs in our home approximately 90 minutes each day. 50 minutes of that usage is showers, the rest being cooking and cleaning. If I had a large 165,000 Btu tankless heater at my home, it would have consumed 248 cubic feet of gas each day. Doing the math, I arrive at a cost of $1.32 per day using a whole house tankless heater. Unless I am mistaken, it would cost 3.5 times more money to use this heater in my home.

He’s even had people write in explaining their disappointment with a tankless heater. One lady from Oklahoma said, “Not only have we spent more on the initial costs of the heater and the installation (about $2000), but we have found that since it’s installation we have not saved anything, it has consistently cost us more in natural gas.”

Another guy wrote, “ The bottom line is that we spent $2100 dollars for a tankless water heater that doesn’t conserve energy, takes at least 1 minute to deliver “hot” water, and that has the same warranty as a conventional water heater.”

Puts things in a completely different perspective doesn’t it?

But wait, dammit, there’s more! There’s also this Yanni-without-the-mustache looking guy who did all this hardcore math that showed tankless is the more efficient choice. Are you kidding me? I just want to know if it’s going to save me some money. It really shouldn’t be this complicated.

So it appears the tank vs. tankless battle will go on, and at this point I’m not completely sure what side to join, but between you and me I’m leaning toward The Builder’s point of view. I’d trust a builder over a self-anointed finance guru or a Yanni wannabe any day.

Useful Tankless Water Heater Links:

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1 Comment

  1. How fortuitous to find information on something I was thinking about buying. The tankless water heater. Very good info.Thanks.


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