“Ten-minute showers, guys,” I said. “I’m getting Hallmark cards from the gas company.” My teenagers grumbled as I laid down the rules for the hundredth time. Between my kids camping in the shower and my furnace (even though it is an efficient 90% model), my propane bills were going through the roof.

Then I installed a tankless water heater. That was four years ago. My teenagers are grown and gone. And we finished this last billing cycle with a credit from the propane company. Our tankless water heater definitely is saving us money!

Should you throw out your standard tank type water heater and install a tankless model? Maybe, maybe not. There have been many technological advances in tankless water heater manufacture in those last four years. Nevertheless, tankless water heaters are not appropriate for everybody.

A bit of tankless water heater history.

Tankless water heaters first came into widespread use in Europe after the second World War. Shunned in the United States as being incapable of providing sufficient volumes of hot water at high enough temperatures, they were brought over to Canada where they gradually gained popular acceptance. After the energy crisis of the 1970’s they saw increased use in Europe and Canada, but they still were not an acceptable alternative to the standard tank type water heaters used in the United States. We Americans were used to big things. We wanted lots of hot water standing ready for our use, indifferent, for the most part, to the cost of the energy required to achieve this.

As the years have gone by and energy costs have heated up, more and more Americans have looked for ways to save energy, money and water. Correctly chosen for the application, properly sized and installed, tankless water heaters can help accomplish these goals.

How do tankless water heaters work?

Basically, a tankless water heater consists of a coil of tubing assembled in a unit called a heat exchanger. In gas models, a main burner is situated underneath the heat exchanger. In older models and some cheaper ones, a standing pilot flame burns continuously to ignite the main burner upon a call for hot water. Newer models use different sources of ignition: mechanical ignition or piezo ignitors. In older models of tankless water heaters, the gas valve provided a steady supply of fuel to the main burner irrespective of the quantity of hot water required. This was, by and large, the source of complaints about insufficient hot water volume. More hot water demand with these older units meant cooler water temperatures and less hot water. Newer models have a modulating gas valve. The greater the hot water demand, the more fuel the gas valve supplies to the main burner. If you turn on the bathroom sink faucet only using a small volume of water—about 1.5 gallons per minute—the water heater’s main burner will only burn with a light, short flame. If you turn on another hot water faucet, increasing the hot water demand, the main burner flame will burn much hotter giving you more hot water.

Benefits of a tankless hot water heater.

Tankless water heaters can save you money. A tankless water heater without a standing pilot will sit quietly doing nothing, not using any energy at all, not using or heating water. If a tank type water heater springs a leak, you may be faced with a flood and consequent water damage. Not so with a tankless water heater; there is no tank full of water to drain out all over your floor. Tankless water heaters are small in comparison to a tank type unit. They hang on a wall and range in size from that of a bread basket to a large medicine chest. Today many manufacturers make tankless water heaters. Some, like Rinnai, make external models suitable for installation on the outside of your home. Rinnai supplies a wall mounted thermostat that even has troubleshooting capacity. You can set the temperature of your hot water from your bathroom or anywhere else in your house with one touch of a button. You can install multiple thermostats in different locations throughout your home. You can take as long a shower as you want with a tankless water heater. It will produce hot water without interruption as long as the hot water faucet is on.

To gain the greatest efficiency from a tankless water heater, carefully read the installation instructions and owner’s manual supplied with the unit. All current models operate on the principle of hot water demand. You will receive the greatest benefit if you keep the water heater’s thermostat turned down and avoid mixing cold water with the hot water flow to achieve the temperature you desire. Tankless water heaters excel at filling hot tubs, jetted soaking tubs and the like. Any application requiring large volumes of hot water is an excellent candidate for a tankless water heater.

Disadvantages of tankless water heaters.

Some local jurisdictions have specific venting requirements for tankless gas units. You would be wise to check into those venting requirements before purchasing your water heater. In my county, the building and codes venting requirements for propane and natural gas tankless water heaters are so strict as to almost eliminate their installation inside a home. Cases like that are where the external units like Rinnai’s model 2020 and 2520 come in handy.

As with any appliance or piece of mechanical equipment, misuse or abuse can cost you money. If you keep your water heater’s thermostat turned up too high, requiring you to add cold water to your shower temperature, for instance, you will waste energy. If you take advantage of your water heater’s ability to provide unlimited hot water by regularly filling your hot tub or jetted tub or taking extremely long showers, you may also experience increased utility bills. Don’t worry about your dishwasher; they all have their own heating elements to boost the incoming hot water temperature to that required for proper cleaning.

Some people confuse tankless water heaters with instantaneous hot water heaters. Tankless water heaters do not provide ‘instant’ hot water. If your water heater is at one end of your house and your bathroom is at the opposite end, it may take a few seconds or longer for the hot water to arrive at your faucet. A tankless water heater will not improve this kind of situation.

Are tankless water heaters right for you?

Some dealers may sell a tankless water heater to anyone who inquires about one. That can be problematic for the customer. Some people are not good candidates for tankless water heaters. My approach (and the one specified by most manufacturers) is to determine the customer’s hot water demand. An elderly couple or a single person who uses the shower once a day with a couple of small loads of laundry once a week is not liable to realize much savings from a tankless water heater. It would take an inordinate amount of time to gain a pay back. By contrast, a large family, one with teenagers or small children, would have a moderate to severe hot water demand, realizing a pay back in a much shorter span of time. They are the ones who would benefit the most from a properly sized tankless water heater installation.

Ask the dealer to see the factory sizing chart that specifies temperature rise and flow rates. Ask them to explain the numbers and make sure the unit you are considering is sized to provide the quantity of hot water you want at the desired temperature. Paying a lot of money for a unit that underperforms is unsatisfactory at best.

Finally, as with any large purchase, shop around. You may find quite a price difference between installers. Enjoy your new tankless water heater and the many benefits it can afford, knowing you are contributing to energy conservation and a better environment.