Tankless water heaters can seem like an attractive option for energy-conscious consumers. After all, instead of keeping water continually heated in a storage tank — whether or not the hot water is needed at the moment — tankless heaters fire only when hot water is demanded. But are they truly a better option?
The answer is yes…and no. Experts note that there are advantages and disadvantages to this choice. Before installing a tankless water heater, consider:
- Many tankless units come with a federal tax rebate of $300.
- Tankless heaters last five to 10 years longer than tank heaters.
- Since they only use energy to heat the water needed at any given moment, they can shave as much as 20% from your water-heating bill.
- They take up less space than tank heaters and can even be installed on walls, under cabinets or in closets.
- Electric models don’t produce greenhouse gases.
- They remove the risk of flooding due to a ruptured tank.
- Savings on heating bills can be eaten up by up-front costs. Tankless water heaters cost, on average, $800-$1,500 (vs. $300-$480 for tank styles). They often require expensive retrofitting: electrical outlets for their fan and electronics; upgraded gas pipes; new ventilation systems – adding an average $1,200 for installation (vs. $300 for tank models). This means it can take up to 22 years to break even, longer than the 20-year life of many models.
- Gas-powered units produce greenhouse gases.
- Gas units require annual servicing to remove mineral buildup. Recommended annual maintenance includes a vinegar flush of the system for 45 minutes. Failure to do so significantly reduces the life of the equipment.
- You can experience lag time before the water turns hot, requiring you to run the water longer and increasing water waste.
- If you simultaneously run appliances that require hot water, the tankless heater may not be able to keep up with the demand; you may need two or more heaters to avoid this problem.
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