15 Pros and Cons of Tankless Hot Water Heater

Tankless hot water heaters are receiving more attention in North America and Europe in recent years because of their energy efficient designs. Because the water is only heated on demand instead of being stored in a tank, there are significant savings opportunities available with this technology. The first systems to use this design were invented in the 1890s, but they were very in efficient. Although the first storage tanks for hot water were invented in 1889, it would not be until 1929 when Stiebel-Elton would create the first practical electric tankless model.

It would take over 40 years until the technologies that make tankless water heaters possible became effective enough to become a viable alternative to a standard tank-based system. As the efficiency levels began to increase, European countries began to adopt these space-saving systems because of the advantages they offer. It wouldn’t be until the 1990s when this option began to make an impact on the American market.

Now you can find tankless systems that work independently, function in a hybrid system with a tank, and provide hot water on demand at incredible levels. There are models of varying size on the market today that can provide anywhere from 2 gallons of hot water per minute to over eight gallons per minute.

If you are thinking about the installation of a tankless hot water heater for your home, then here are the pros and cons to start considering.

List of the Pros of a Tankless Hot Water Heater

1. Tankless hot water heaters use much less energy in most homes.
Most tankless hot water heaters will use up to 50% less energy to provide warm water throughout the home. Even when energy efficiency rates are not at their peak, homeowners can save about 30% on this expense. That means the average household can save about $100 per year (or more) with this need because you’re eliminating the cost of maintain 50-80 gallons of water at an ideal temperature with a tank-based system.

2. You will receive a continuous supply of hot water.
Another benefit to consider with a tankless hot water heater system is that you will never run out of hot water like you do when using a tank-based system. The water runs through a unit that installs directly on your wall in a garage, interior room, or another convenient location. Heaters warm the water as it travels through the plumbing so that it reaches your shower, bathtub, or sink at the correct temperature.

As long as you purchase a model which operates with the correct capacity for your home, you will not run out of hot water during use. Because it only generates this need when you activate the system, there is never a worry about tank failure.

3. There are multiple energy solutions to consider with this technology.
A tankless hot water heater typically runs off of natural gas or propane, but there are electrical models available on the market today as well. That means it is possible for homeowners in most situations to find an option that works with their current energy solutions. Although the models which use electricity as their primary source of heating power do not offer the same levels of energy savings on a household’s utility bill, there are still places to save energy since the system is not engaged all of the time.

4. Tankless systems last longer than the traditional tank-based hot water heater.
A tankless hot water heater can last significantly longer for homeowners when compared to the traditional systems that use a storage tank. Although you can receive over 10 years of service with a tank-based design in your home, tankless systems can last for up to 20 years or more depending on the make and model that you choose. If you plan to be in your home for the next five years at minimum, then the cost of installing this technology is something that you can recoup over time thanks to the energy savings that you receive.

This advantage applies to the warranties which are found in this industry as well. If you purchase a traditional tank to store your hot water, then the average warranty runs from 6-10 years, depending on the make and model that you choose. Most tankless systems are backed by a 15-year warranty.

5. Less space is necessary for a tankless system compared to a traditional tank.
If you own a small home, then the amount of space that a tank for hot water can require is significant. Even if you can place the unit into a corner or closet, that area becomes unusable space for anything else. Tankless systems use a different approach, connecting to the plumbing system of your home directly through the wall. This design creates a footprint in your home that is similar to what an electrical panel requires. Most systems without a tank take up 50% less space when compared to the traditional systems.

6. There are fewer risks with leaks when using a tankless system.
If you store your hot water in a tank, then there is always a risk that the product could leak. Rust or corrosion can exacerbate this issue as well. It is a problem that does not impact tankless hot water systems because the plumbing routes directly through the wall box to create instantly heated water. The breakdown risks are minimal with this technology, which means there are fewer issues with water on the floor when using a system like this compared to the traditional design.

7. You will encounter fewer maintenance needs with this system.
You will not get away from all of the maintenance chores for your hot water system if you decide to use a tankless model. This advantage does mean that there are fewer tasks that you must complete to ensure that the hot water is available when you need it. You will want to flush your plumbing at least once per year to remove any calcium, minerals, sediment, or other materials that can reduce your output. Some hot water tanks need this chore completed once per quarter instead.

List of the Cons of a Tankless Hot Water Heater

1. The idea of endless hot water tends to be a fantasy instead of what happens in reality.
The amount of hot water which is available in your home will go down every time there is a faucet requesting access to the system. Most of the tankless hot water heaters can support about 4 gallons of water per minute at a temperature which is comparable to what a tank of already heated water can provide. If you exceed this level of demand, then the temperature of the water that you receive at the faucet will not be as warm.

If your shower output is 5 gallons of water per minute, but your tankless hot water system only supports 3.5 gallons per minute, then switching off of a tank will not be a positive experience.

2. Cost is a significant factor to consider when shopping for tankless systems.
Most of the tankless hot water systems which are available today do not provide enough capacity to support a household of more than three people. That means you must upgrade to a significantly larger system if you prefer a tankless design over the traditional hot water heater tank. That means you can easily spend over $1,000 on the initial equipment for your home before starting any of the installation work.

Homes which are receiving an upgrade to a tankless system can experience a significant cost for the remodeling work as well. Plumbing systems which were designed to work with a hot water tank are not always compatible when you want to use a tankless system instead. The final cost of a project can be more than $5,000 when labor costs are included. That is why most of the systems go into new construction projects.

3. You must install specific vents to use a tankless hot water system.
Tankless hot water systems use high-powered burners to quickly heat the water when someone turns on a faucet or fixture. This design means that a home with this system must have special venting requirements installed to be up to code. You must have a dedicated and sealed system, which usually requires a professional installation to create. Natural gas burners need a larger diameter pipe as well, which can also add to the installation cost.

That is why when you start pricing a tankless hot water unit, it is imperative that you receive a firm bid or estimate on the final installation costs. Unless you are a DIY specialist with professional-level skills, this is not a job that you can tackle on your own.

4. There is no access to a hot water reserve with this system.
If the power goes out at your property, then there is a chance that your tankless hot water heater may not be able to function correctly. Because there is no access to a reserve system without a tank, there could be emergency situations where hot water is not an option at home. If you have a hot water tank, then you could have up to 80 gallons of an emergency water supply that becomes useful if you become trapped in your home for an extended period for some reason. Without instantaneous energy through your electrical or gas connection, there is no way to create hot water for use.

5. You must have a high-pressure gas line available for some models.
If you do not purchase an electric tankless hot water system, then there is an excellent chance that you will require a high gas pressure system to provide fuel to the burners that will heat your water. Some of the heaters in this category require over 150,000 BTUs to create the correct users experience. If your home has a low-pressure main gas line, then you might not have the capacity to use this technology right now. The cost of retrofitting a home to a system like this can sometimes be triple the cost of installing a brand-new tank-based hot water heating product.

6. There is a challenge to supply enough hot water to all of your appliances.
Unless you purchase a high-capacity model, tankless hot water heaters can struggle to keep up with your home’s demand levels if you run multiple appliances simultaneously. If you install a low-capacity system, then it may not be possible to operate the dishwasher and the washing machine at the same time. Some systems cannot even support two people taking separate showers. The only way to get around this disadvantage is to install two tankless systems instead of one, often dedicating one of them to the high-use appliances in the home.

7. Some systems might not pay for themselves before reaching their end of life.
Tankless hot water heaters may not always provide a significant energy savings after installation. If you are only saving $50 to $75 each year with this system including the changes to your usage habits, then a product lasting only 20 years may not reach a place where you can recover your entire investment. There are several areas of cost to consider that go beyond the system itself, including venting and labor costs that are variable based on your home’s design and geographic location.

That is why some homeowners focus on the cheapest systems that are available right now, but this models do not have the power to support the needs of an entire family.

8. There can be delays in the flow of hot water.
When you use a hot water tank, there are times when a delay occurs in the delivery of the correct temperature through the faucet compared to when someone engages the plumbing system. This disadvantage applies to tankless systems as well. Because the burners heat the water on demand instead of proactively in a tank, it might be up to a minute before you receive the final product that you want with this technology. Although there is less risk of water damage overall, you’ll be using more water than normal to achieve the results you want with a low-capacity system.

The pros and cons of tankless hot water heaters show us why this technology is useful and the reason behind an overall lack of interest in this option when compared to a traditional system. Although there is the promise of receiving endless hot water with this system, it might be lukewarm if you have multiple demands placed on your plumbing at once. That is why an estimate of your current user habits must take place first before determining if the benefits of this option outweigh the potential disadvantages.

About the Author
Brandon Miller has a B.A. from the University of Texas at Austin. He is a seasoned writer who has written over one hundred articles, which have been read by over 500,000 people. If you have any comments or concerns about this blog post, then please contact the Green Garage team here.