White tankless water heater

Are tankless water heaters worth the investment?

Q. I am interested in a tankless water heater. How much do they cost and is it worth the investment?

A. Now that furnaces are hitting a glass ceiling in the efficiency standards (97%+/-) homeowners are looking at improving their efficiency on other big energy users in the house and number 2 on that list is the water heater.  Water heater technology has largely remained stagnant for the last 60 years.  Standard atmospheric vent water heaters use the same standing pilot technology that was used in the 60’s and 70’s.  This has resulted in efficiency levels around 67% efficient.  That means for every dollar in gas used, 67 cents are deposited into the water and 33% dissipates up the flue vent.

Tankless water heaters are relatively new.  They have efficiency levels higher than 95% and only heat water that is needed rather than heating an entire tank of water for standby.  This is very attractive because from an energy stand point there isn’t any waste.  From a cost stand point, it consumes a small amount of electricity for controls in standby mode. However, when a shower or tub turns on the unit ramps up and consumes a shocking amount of gas to heat the water near instantaneously.  A typical furnace in the City of Holland uses 60k btus of gas, and a water heater uses 40k.  A tankless water heater with 2 showers running will use over 150k btus of gas!

A standard water heater replacement should cost less than $1,000, less than $1,500 for a power vent unit.  A tankless water heater will run closer to $3,000.  This is due to a more complicated installation process.  A tankless requires 2 pvc vents for intake and exhaust, a beefed up gas line to handle the load, high voltage electricity, and draining for condensate.  These additional requirements add up and drive the cost up.  On top of these costs, a tankless water heater requires bi-annual maintenance.  A tankless water heater should be flushed out every other year.  This carries a roughly $125 service charge.

Usage will play a huge factor in determining the payback period.  On average, a tankless should hit its payback around year 10.  However, the unlimited supply of hot water is a great benefit that helps offset that long payback period.  Feel free to contact us and we will give you an honest assessment if you are a good candidate for tankless water heating.

Chad Baumann
SALES & MARKETING MANAGER
Residential comfort expert. Recognized nationally as a top 40 under 40 in the HVAC industry. 10 years of experience in the HVAC field.