The Pros & Cons of a Tankless Water Heater – All You Need To Know

Tankless water heaters are becoming more popular in the United States. In today’s economy, people are searching for every way to cut their energy bills. These units have been in use for several decades in Europe and parts of Asia such as Japan. Now most Americans want to enjoy the enhanced benefits of tankless water heaters.

Tankless water heaters are called on-demand water heaters. They come with a powerful electric or gas-powered burner that heats the water instantly when you need it. Thus they can save energy because the unit need not reheat the water repeatedly like a conventional tank water heater.

Despite their modern features and improved energy efficiency, tankless water heaters have drawbacks. Before choosing to buy a tankless unit, it is important to know the advantages and disadvantages of the machine.

Here, we look at the pros and cons of tankless water heaters to consider before committing resources to it.

The List of the Pros & Cons of Using Tankless Water Heaters


Pros of Tankless Water Heaters

Tankless water heaters are excellent for many reasons. Here are some benefits of tankless water heaters.

On-demand Hot Water

The most important advantage of tankless units over tanked alternatives is their ability to deliver instant hot water. Tankless water heaters are called on-demand for a reason. That is because the unit can heat the water to the desired temperature in the small time it takes the fluid to flow through the systems compartment.

Thus, you need not wait for a tank to fill up and slowly heat the water to enjoy a piping hot bath during the peak of winter. Tankless water heaters can deliver on-demand hot water with a relatively small size. If you are not a fan of waiting for hot water, a tankless unit is a great choice for you.

Energy Efficiency

If you live in a cold region where life is incomplete without hot water, energy bills can take a huge chunk of your monthly household expenses. A tankless water heater can help reduce your monthly energy bills by as much as 22 percent.

Unlike tank water heaters that store water and heat repeatedly, tankless units provide water on demand. This means that the unit is not burning gas or using electricity when you are not running the faucet. That way, you can reduce your heating expense drastically. Check out our comparison post to learn more about the differences between a tank and tankless water heater.

For people who have a large household, a tankless water heater can help save heating bills. They also provide instant hot water whenever you need to bathe and wash. You can save hundreds of dollars every year with a tankless unit compared to a standard water heater.

Longer Lifespan

One great advantage of tankless water heaters is their longevity. Top-quality conventional water heaters can deliver for up to 10 years. On the other hand, tankless units can last for over 20 years. This makes tankless units a good buy from the economic angle. They serve you for a longer time along with being more energy-efficient.

For heavy hot water users such as large households where people use multiple shower heads and faucets simultaneously, a tankless unit will serve you for longer, although its initial cost may be higher.

You will get the value for the additional cost of the unit. Tankless units can serve for twice the time a high-quality tank water heater will last. In the long-term, a tankless unit is the better investment.

Compact Size

Besides improved energy consumption and longevity, tankless units also come in smaller sizes. This stems largely from the operational mechanism of tankless water heaters. Unlike traditional water heaters that need to store water in a reservoir, tankless units do not need a reservoir. This reduces its size to a small box that houses the thermal element or gas burner.

The smaller size of tankless units makes them the preferred choice in small homes where every square inch is precious. Whether you live in a big or small house, tankless units offer space-saving benefits that not only allow you more room for other things in the home but make installation more flexible and easier.

On-demand Hot Water

At sub-zero temperatures, most people don’t want to wait for their hot water. Tankless water heaters ensure you never have to run out of hot water when you need it most. A standard water heater has to boil water every time you want to use hot water, making you wait for some time. However, a tankless unit heats the water whenever you need it, making it truly an on-demand heater.

Reduced Environmental Impact

Tankless water units are not only energy efficient and compact, but they have a less negative impact on the environment. Because they require less energy to work, it means you can get more out of tankless units while reducing greenhouse gases from power stations.

Further, tankless water units have replaceable parts that reduce pollution whereas most traditional heaters need to be replaced completely when they become faulty.

Gets Rid of Standby Loss

One of the biggest advantages of tankless water heaters is their ability to get rid of standby loss. Standard water heaters lose a lot of energy because they need to reheat the water repeatedly to keep the temperature high, skyrocketing energy bills. The worst part is that a traditional heater continues to heat water even if nobody uses the water, causing a significant waste of energy resources and scarce household funds.

Tankless water heaters are immune to this problem because they only heat the water when you open the faucet. This translates to hundreds of dollars in savings on energy costs annually, especially in large homes where people use plenty of hot water.

Tax and Financial Incentives

Governments all over the world try to encourage citizens to use energy-efficient, environmentally friendly products to reduce global warming and greenhouse gases. Because of their higher energy-efficiency, tankless water heaters enjoy tax breaks and financial incentives to help reduce the burden of installation and initial purchase cost.

Longer Warranties

Tankless water heaters come with longer warranties because they have a higher lifespan. This protects the homeowner from expensive repairs and parts replacements should something go wrong during the lifetime of the unit.

You can get upwards of five to ten years of warranty when you purchase a tankless unit. It is advisable to check the warranty before buying a tankless unit considering the high initial cost of buying and installation.

Perfect for Smaller Homes

For people with modest hot water needs, a tankless water heater makes more sense. You can get an electric tankless unit to supply hot water for your shower only or kitchen faucet. The unit will deliver hot water on demand, cut your heating bills, eliminate standby loss, and take a small space.

Cons of Instant Hot Water Heaters

Tankless water heaters offer exceptional benefits, but they are not perfect. Compared to standard heaters, tankless units also have shortcomings. As a conscious homeowner or business, you need to consider the constraints to using a tankless water heater before splurging on the appliance. Here are drawbacks of tankless water heaters.

Expensive Initial Cost

Tankless water heater costs are higher than that of traditional water heaters.  Because they use more advanced technology and require expert installation, tankless units are more expensive to buy and install compared to standard heaters.

While traditional heaters cost about $500, tankless alternatives can cost as much as $1,000 or more. Plus, tankless water heaters are also more expensive to install because they require professional installation.

If you buy a gas-powered unit, you may have to retrofit your home’s venting system and this costs prohibitive amounts. When buying a tankless unit, you need to consider the installation cost as it can be double or triple the initial purchase price.

The installation cost will go down if you have the skills and equipment to set it up yourself. Thankfully, the high upfront cost is worth the lower operating expenses and longevity of the units.

Temperature Fluctuations

A major concern with tankless units is that many models suffer from temperature fluctuations. Tankless water heaters experience temperature inconsistencies because they don’t store their water in a tank but have to heat it on the go whenever somebody needs hot water.

The problem with on-demand hot water is that the heater may find it difficult to supply multiple outlets at the same time. This results in temperature fluctuations at different faucets, especially those that are far away from the heater.

Sometimes, it takes a few seconds and even a couple minutes before the temperature stabilize. However, temperature fluctuations are usually temporary. In some tankless water heater brands, it is possible to lock the temperature so that the heater will only deliver water at the preset temperature.

Limited Water Supply

Tankless water heaters deliver hot water on-demand, but not all of them can supply water to multiple outlets simultaneously. If you are a heavy hot water user and live in a large house with many occupants, you may find that your tankless unit struggles to provide water when somebody is washing the dishes, and two other people are having their bath.

Tankless units have specific gallons per minute (gpm) capacity. Many homeowners don’t calculate the gpm value of their homes before installing an instant hot water system, and the result is a limited hot water supply.

The good news is that there are big tankless units with the capacity to serve large households with no problem. Your job is to calculate the flow rate of all the water outlets you want the tankless unit to serve and buy a water heater that can handle such demands.

Extensive Retrofitting

One reason for the high cost of installing tankless units is that they require extensive and often expensive retrofitting of your home’s gas and venting system. Most gas-powered tankless units are not compatible with the gas piping and venting in your home. You need to evacuate the smoke produced by the combustion in the heater’s burning chamber.

For this, you may have to reroute gas lines and add a new venting. The work is sophisticated and usually requires a trained contractor, increasing the cost of installation.

Electric units are more affordable to install, but you need to upgrade your electrical installations if the model you bought has higher power ratings, which is usually the case. All these costs quickly add up, but it will be worth it in the long run.

You May Need Extra Equipment

For longevity and optimized operation, most tankless units often require additional equipment. You may need equipment such as a water softener to reduce water hardness which can lead to mineral sedimentation in the tankless unit. While a softener increases the total cost of the unit, it also takes a lot of space.

You don’t have to buy a softener, but the device improves the performance of the tankless unit, reduces its energy consumption and makes it last longer. So it is worth the investment.

Requires Annual Maintenance

Most tankless water heater brands have a policy that mandates users of their units to carry out annual maintenance to keep their warranty. Sometimes, companies like Rheem also stipulate that only a trained technician certified by the company can perform maintenance and repairs on their products.

If you DIY it yourself, you may forfeit your warranty. Manufacturers also want users to flush their units every year to prevent the buildup of minerals in the water line and heater. Also, some may require you to buy a softener. These cost money, and you may have to pay hefty fees to the technician every year even if your system is in a perfect working condition.

Learn how to spot the signs of water heater failure.

There Are Alternatives

Tankless water heaters are great, but the truth is there are energy-efficient alternatives on the market. You can also get traditional tanked water heaters with exceptional energy-saving features. Even solar-powered models that cut down your heating bills drastically during the summer months.

However, if you need your hot water on-demand and can’t endure long waits, nothing beats the reliability of tankless hot water heaters.

Higher Instantaneous Energy Requirements

Another concern with tankless heaters is that they require more energy to heat water compared to tank heaters. The reason for this is that they do the same job at a fraction of the time it takes a traditional heater to deliver, so they need to operate at a higher temperature. However, the overall cost of running tankless units is lower than standard water heaters.

Can not Store Water

This is not a problem per se, but you will want to have your hot water in a reservoir sometimes. Your gas or electricity supply may be cut off and this can prevent your tankless unit from working. In such a situation, a tankless water heater will be useless to you, unless you have a power generator to run your household.

Wrap Up

A tankless water heater is an excellent piece of hardware to add to your home. The system provides instant hot water whenever you open your faucet. They are designed to lower your energy bills and save space. There are so many benefits of using tankless water heaters. But like everything made by humans, it is far from perfect. You need to weigh your options carefully before switching to a tankless water heater.

One of the biggest concerns for homeowners and businesses considering a tankless heater is the higher upfront cost of buying and installing the system. Tankless units can cost double the price of a traditional tank heater and even more to install. You may need to retrofit your gas pipes, venting or install new electrical systems.

You also need to pay a professional for the installation as the systems are usually either too complicated to DIY or the manufacturer’s policy prevents you from performing the job yourself. And there is also annual maintenance you need to carry out to keep your warranty.

Final Considerations

Considering the pros and cons of tankless water heaters, the benefits far outweigh the potential drawbacks and investing in one. These systems will not only guarantee constant hot water supply but will also reduce your energy bills. And not to mention save you hundreds of dollars which you can invest in other household needs.

All you need to do is know the hot water requirements of your home and get a brand or model that best suits your preferences. There are several brands that make top quality tankless water heaters including electric and gas-powered models.

Check our homepage for in-depth reviews and tankless water heater buying guide to help you make the best choice when you go shopping for an on-demand water heater that will meet your household or business needs.

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