Tankless Water Heaters... has their time finally come?

For decades tankless water heaters haven't been worth the effort to install due to our artificially low cost of natural gas in the USA and the high price of tankless heaters. Tankless water heaters have dropped to under $1,000 while tank water heater prices have continued to climb. Are tankless water heaters worth rethinking?

I have found 3 basic types of tankless water heaters:

1: Non-modulating with battery powered igniter such as they use in Europe. These can be bought in the US for under $230, and use 1/2" gas lines. Most will require an vent upgrade to 4" B-vent. 54 -87% efficiency.
http://www.amazon.com/dp/B009EFVS8A/ref=twister_B00B5EZPUK

2: Modulating tankless that automatically adjusts the burner output based on temp rise and water flow. They sell for about $550 but must either be mounted outdoors or require very expensive Stainless Steel venting. Most require upgrading gas lines to 3/4". 82% efficiency
http://www.supplyhouse.com/Takagi-T-KJR2-IN-NG-T-KJr2-IN-Takagi-Tan...

3: Condensing that can vent with ordinary PVC pipe, cost just under $1,000. Also requires 3/4" gas line and condensate drain. 95% efficiency.
http://www.supplyhouse.com/Takagi-T-H3J-DV-N-T-H3J-DV-N-Indoor-Tank...

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Several things to consider:

1) The hot water usage. The first unit (Amazon) is only about 3.1 gpm.  That rate is often only achieved with input water temperature that is already above 60F.  A low flow shower head AND one bathroom sink would nearly equal or exceed the capacity of the small unit.  The 54% (low range) is not particularly efficient.  For slightly more than the cost of the Takagi tankless - a condensing gas tanked heater may be a good choice.  The gas also modulates - water is stored on site (also good for emergencies), and the efficiency nearly equals a tankless. 

2) You could install multiple small tankless units in the same house for point of use water heating - but that would result in increased gas lines within the house.

3) Make sure you check the specs for NOx emissions - some of the tankless heaters may exceed the California specs as well as those in a few other states.

4) Moving a tankless outdoors - can be a risky procedure - if you live in a climate zone which has days that are below freezing.  Internal electric heaters are required to prevent the flash boiler in the tankless from freezing up.   This can even be a problem if the tankless is installed in a cold zone 6 or 7 region and air from the outside is allowed to flow through the tankless combustion chamber during winter storms.  Many of the tankless manufacturers recommend draining and filling with food grade gylcol during those events.  :-(  That of course seems contrary to the point of installing the tankless.

5) Larger tankless heaters (Rinnai 9.8 gpm model for example) can also be used to provide hydronic heating in small heat load homes.

5) If the house is in a warmer climate with sun - solar hot water heaters still work and can provide a viable alternative.

Keep in mind the additional delay induced by not having a ready supply of hot water in the tank, the possibility of the "cold water sandwich" effect, the importance of matching historical flow rates / temp rise.  IMHO it always makes the most sense to reduce demand first (efficiency first!) BEFORE committing to a new supply option (i.e. $20 ultra low flow shower heads @ apx. 1.6 gpm, front load wash. mach., etc.).

Below excerpted from http://www.consumerreports.org/cro/appliances/heating-cooling-and-a...

"Water runs hot and cold

Manufacturers of tankless water heaters are fond of touting their products' ability to provide an endless amount of hot water. But inconsistent water temperatures were a common complaint among our poll respondents. When you turn on the faucet, tankless models feed in some cold water to gauge how big a temperature rise is needed. If there's cool water lingering in your pipes, you'll receive a momentary "cold-water sandwich" between the old and new hot water. And a tankless water heater's burner might not ignite when you try to get just a trickle of hot water for, say, shaving.

Nor do tankless water heaters deliver hot water instantaneously. It takes time to heat the water to the target temperature, and just like storage water heaters, any cold water in the pipes needs to be pushed out. And tankless models' electric controls mean you'll also lose hot water during a power outage.

Tankless units might need more care
During our long-term testing, an indicator on the tankless model warned of scale buildup. We paid $334 for special valves and a plumber to flush out the water heater with vinegar. Many industry pros recommend that tankless models be serviced once a year by a qualified technician. Calcium buildup can decrease efficiency, restrict water flow, and damage tankless models. Experts suggest installing a water softener if your water hardness is above 11 grains per gallon. Ignoring this advice can shorten your warranty."

I suggest speaking with a few customers on both sides of the aisle (happy/unhappy) that have already made the switch to understand their experience (get a 360 degree view) before you decide.

Good luck!

I think that the cost of these units for new construction are making more sense and it is what I have seen speced in many custom builder homes here in San Diego. This is partly to do with Title 24 and energy trade offs. However the ability to have the proper gas run, electricity and venting during new construction makes them an obvious choice.

Certainly as you look at the cost of a Takagii the initial price of the unit is close to the price of a 50 gallon NG DWH. The first unit I do not like the reviews or the battery. I have installed Takagii and know they are a quality unit.

In a retro fit situation it will cost more money for the initial install. As each job is different how much work it will be and therefore money extra will vary.I would say at a minimum it will add $1200 to a retrofit and up too $3000. But for the most part you will not see the savings for the life of the unit.

Probably the second unit and you will see a positive cash flow. NG is simply so cheap that is difficult to get payback on the unit on a retrofit unless you are a huge user of hot water which most residential are not. I think those that switch to them now are the energy conscious and green type customer. For them the choice is not financial but environmental.  

I've sold a lot of Naviens (IMO the best unit available) and now I find myself recommending electric water heaters.  If there aren't convenience benefits (most notably endless hot water), the benefits are highly speculative. Since cost of heating hot water requires a magnifying glass, any fractional savings end up being pretty hard to see. 

My perspective has evolved thusly:  Installing an expensive gas appliance that makes that home gas infrastructure biased and gas dependent for the next 15 years is a disservice to the environment and the homeowner.  

Air source heat pump technology has made technological and efficiency gains similar to computers and TV's, they are a completely different item.  They now heat cheaper than gas, so the argument for a furnace has been erased.  I HATE cooking on electric, but induction stove tops have removed that sacrifice - they actually cook better than gas.  

The argument that electric hot water is more costly is correct.  But getting rid of the gas meter in my area saves significant meter charges, taking a $100-150 monetary penalty and turning it into $100-150 reward.  I've dumped a couple gas meters and am saving $450+ per year. 

The final dagger, solar PV has gotten so cheap I'd rather have them spend the increment buying production rather than spurious efficiency.  With electric hot water people can produce the energy they consume.  Not many can produce their own methane.  

The person who could make us all look like kindergarteners when it comes to hot water is Gary Klein - I think he's one of the world's foremost experts on hot water.  Maybe he'll comment.  

Issues of water savings and energy savings are separate, and I think many tankless installs do neither.  Other details like supply line design, the need for buffer tanks, proper recirc, etc add complexity to design that never makes it to install.  

Bad install design means short pulls heat up lines without getting hot water at the tap.  A lot of gas is burned very inefficiently (high CO/NOX) without delivering ANY hot water, and this cycling unnecessarily beats up the equipment.  Or long purges waiting for hot wastes a lot of water.  

I agree with Brian's assessment as the these condensing units do require maintenance and ideal water conditions to minimize scale build up.
Another big issue is the servicing contractor- ensuring technicians are properly trained to service and install. Controller boards for these units are expensive and many service companies do not carry spare boards in their service vans- not a situation I would want with no hot water and a service tech telling me he needs to get a new controller board that may take some time.

I believe that it all depends on where you live, the cost of the power source, and what type of housing we are discussing. In south Florida, I strongly urge in single family stand alone housing, a solar hot water system using a flat plate collector. Freezes here are rare but a freeze plug must be included in the system! A properly designed and installed solar hot water system can deliver up to 90% or more of a home's hot water needs. If the home is set up for gas, I would recommend gas as the back up. In most cases (85% or more of our homes have electric hot water systems) electric will be the back up. With the federal tax credit and utility rebates the systems initial cost is reduced by as much as 50%!

Heating water electrically is the least efficient method of making hot water. However, if you have a high rise condo with limited space and gas is not available then a tankless electric system may be the best option. Just remember, that on any type of tankless system (gas or electric) every time you open the hot water tap you will be charged an energy cost!

In colder climates solar is an option, but it will deliver a lower total of the hot water needs and may have a longer payback period.

Just note that on a sunny 55 degree outside temperature day here we can still make 130 degree plus hot water!

I have a Noritz gas tankless mounted externally and it has done a fine job even down to 5F here in Atlanta.  Mounting externally removes a combustion source from the envelope and eliminates any venting issues.  I do experience the 'sandwich', but that has not been a bother.  My water usage is stable at 3,000 gallons/mth as it has always been.  Costs vary wildly.  My total cost was $2,200, but I received a gas company rebate of $600 and a federal tax credit of $480, so my real cost was $1,120.  Considering I had to buy a water heater of some type, my normal option would have been a .67 EF storage unit that would have cost near $1000 to install. So my incremental upgrade cost was nominal.  In my opinion, it worked out great.  There are electric storage options that can work in the for of heat-pump water heaters now on the market.  If I had sun, I would have chosen solar, but I live in a forest.

Nearly all the manufacturers also offer tanked condensing gas hotwater heaters with efficiencies around 80%.  Because they have storage capacity,  the sandwich is gone.  They can bring the air source in from outside and direct vent... plus the BTU/hr is often closer to the existing gas hotwater heaters - no need to upside or alter the gas line in the house.

http://www.ruud.com/product/residential-gas-water-heaters-high-effi...

Rheem has one,  AO Smith had one that I looked at several years ago.  If I remember correctly, the prices were around $1500 without rebates, but because the gas piping often doesn't need changing - the installed cost can come in under $1000 (with rebates and tax credit)

They still have a tank,  the warranty for the tank is often 6 or 12 years (double anodes...) they do require 120V as do many of the tankless.

82% EF tank costs $1,500 vs $550 for 82% tankless. Unless the gas line is $1,000 to change, what's the point? The tank doesn't give back the extra space a tankless would. Good luck finding a condensing tank for sale, much less somebody to service it.

AO Smith Vertex is about $1600, 90% efficient, 78,000 BTU,  which means you might be able to use existing gas pipes.

http://www.supplyhouse.com/AO-Smith-GPHE-50-50-Gallon-76000-BTU-Ver...

The  tankless nearly always require an up-sizing of the gas line -its the 120,000 BTU and above.   The Marey you listed is made in Puerto Rico.... and it also is 78,000 BTU (approximately).  But a low flow rate.  The Vertex would have much higher flow rate - and higher efficiency,  plus it would meet the California NOx requirements.   Marey's website said eff was 54%-87%.

The  tankless nearly always require an up-sizing of the gas line -its the 120,000 BTU and above. 

Nope, Not any more: 

1/2 inch gas line:  http://bit.ly/npeAhalfinchgasline

I hope this doesn't devolve into arguments of cost.  Parroting supply house cost is NOT informative.  Water heaters at the supply house counter don't produce any hot water.  

In my area, triple supply house cost and you have a rough idea of installed cost including other materials, labor, overhead, etc...  

All irrelevancies anyway - for most the energy savings opportunity is less than $100 a year.  Nearly Pointless when maintenance/risk is factored... If there are no non-energy benefits to the consumer, it is very likely tankless is a bad recommendation.  

And if you are at ALL forward looking, gas anything is a bad recommendation.  Making "cost benefit" decisions that handcuff clients to a fuel with no certainty of cost when the option to self produce an alternative is simplistic at best, arguably malpractice.  Solar means consumers have serious cost protection for Electricity, and this will keep electricity costs low whether your client buys solar or not.  No such democratized production cost protection exists for gas. 

Recommend electric water heaters.  Take the savings and improve the enclosure. 

Yes,  and the authors unit (Marey) is probably okay,  until you look at what else might be hanging on the low pressure (house side) line going back to the meter.  If it's just the tankless (and under 24') 1/2 works as Navien suggests.  But add a gas dryer,  stove, or furnace on the same line and you need to do the calculations for the line size.  That really opens up a bag of worms.   It can make the condensing tank  or  heat pump hot water heater look much more attractive.

Five years ago we did the upgrade on our house, and when I started to total up the BTU use of all the appliances, running max load (house full of relatives over for Thanksgiving on a very cold day -- that was amazing how much gas would be used and the size of the meter and inside lines.  (gas dryer, stove, furnace, hotwater, enclosed fireplace, spa,  and possible generator).  But on a normal day... for  most hours of the day - the gas draw is zero.

The tankless heaters can easily trigger the need to upgrade pipes.  I've seen that multiple times... and if someone really wants to stay with gas - but demand high efficiency - the higher efficiency Vertex, Rudd, Rheem are probably a lower total cost.

HPHW are priced about the same as the condensing tank heaters -- so it becomes a wash if the owner is just after high efficiency.   If owner can put small electric tank heaters near point of use -- and eliminate the need for all the hot water distribution lines... they might even have more options (small point of use electric flash heaters). 

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