The US Department of Energy has determined that water heating accounts for 14 to 18 percent of energy consumption in the average American home, which represents between $400 and $600 per year and is the second largest energy expense. Water heating costs are strongly determined by three main factors: the type of heater, the energy source and consumption habits.
Since hot water is a basic necessity in buildings, especially in northern states like New York, building owners should make sure they select the type of heater that best suits their needs. In most cases, the two main options are:
- Conventional water heater with storage tank.
- An instantaneous or tankless water heater in which water is fully heated as it flows.
Regardless of the type of heater you choose, electric and gas models are available. On average, a home with a tankless heater will spend $100 less on hot water each year, but that doesn't mean storage heaters should be overlooked. Each alternative has advantages and disadvantages.
Over-engineering increases costs without any benefit.
Find out which systems to look for.
Classification of Instantaneous Heaters by Fuel Source
There are electric and gas tankless heaters, and although their main operating principle is the same, there are some key differences between the two types:
Gas Tankless Heaters
These heaters typically offer a lower operating cost because they run on gas and can handle higher flow rates than electric heaters, often up to 5 GPM in larger models. However, instantaneous gas heaters often require an upgrade to the gas service inlet, increasing their initial cost; and also require a chimney to eliminate combustion gases.
In general, gas tankless heaters are cost-effective if the existing gas installation is suitable for the unit and there is already a chimney installed. Otherwise, the initial cost of the gas installation and associated chimney could negate the benefits of the project.
Tankless Electric Heaters
Running on electricity, these heaters tend to have a higher operating cost than their gas counterparts, but their initial cost is low – electrical fixtures are easier to upgrade than gas lines and these heaters do not require maintenance. chimney.
Electric tankless heaters have a flow rate disadvantage over gas heaters: Even larger models are typically limited to values below 2 GPM. However, this can be compensated for by simply installing more units in parallel. When upgrading existing hot water systems, electric tankless heaters tend to be the winning option due to the initial cost advantage.
What is the best option?
Neither type of heater can be considered better than the other – some designs will favor gas and others will favor electricity.
- Gas heaters are best suited for new installations, or in existing projects with high demand for hot water and where the gas installation and chimney are suitable.
- Electric heaters are typically the best choice when retrofitting existing installations without the provision of a gas heater, when demand for heating is relatively low or if the customer prefers point-of-use heaters in multiple locations.
When site conditions are suitable for both options, the decision can be made based on financial performance: which type of heater provides the greatest net savings over the existing installation?
Advantages of instant hot water
Regardless of the power source, tankless water heaters offer several performance features that make them the preferred option in many U.S. homes.
Instantaneous heaters are compact
The hot water tank is the largest piece of equipment in conventional heating installations and this can be a problem when space is a limitation. Thus, tankless water heaters are common in single-family apartments, tiny houses, and other similarly sized homes.
The size advantage is especially true for point-of-use heaters, which can be easily installed on a wall near a sink, shower, or faucet.
Instantaneous heaters save energy in most applications
Storage water heaters constantly consume energy just to keep the water in the tank at the desired temperature. This energy waste is avoided with tankless heaters, and although your savings vary by design, they can exceed 30% in extreme cases.
Although not common, there are cases where electric tankless heaters can be more expensive to operate than their storage-based counterparts; This happens if hourly electricity rates apply and the heater is used extensively, precisely when peak rates are being charged.
Design flexibility in new installations
Another significant advantage of instantaneous heaters is that, as no storage tank is used, there is flexibility in the installation configuration:
- A single heater can be installed in an entire house.
- Multiple point-of-use heaters can be used in strategic locations.
- A combination of both approaches.
Using a single heater is the recommended choice when there is a consistent and predictable water heating load that will require the full capacity of the unit. On the other hand, point-of-use heaters are the best choice when there are few places with variable consumption, for example two bathrooms and a kitchen tap in a small apartment.
Tankless heaters have a longer lifespan
Another significant advantage of tankless heaters is their long lifespan: they typically last 20 years or more, while heat pumps and conventional storage heaters typically last 10 to 15 years. Only solar heaters offer a lifespan comparable to that of tankless heaters.
A tankless heater may seem expensive in terms of initial cost, but consider that it replaces two conventional heaters over its lifetime. You will avoid the cost of the replacement storage heater as well as the associated labor cost.
Synergy with Solar Water Heaters
A tankless heater can provide excellent results when combined with a solar water heater:
- The solar collector has a storage tank, compensating for one of the main limitations of instantaneous heaters.
- The tankless heater allows the solar collector to provide consistent output: On days when sunlight is unable to provide consistent heating due to weather conditions, the tankless heater can cover any gaps.
Basically, the tankless heater provides hot water on demand, while the solar collector provides free heating and storage. When both types of heaters are combined, the result is a reliable supply of hot water.
Disadvantages of instant hot water
Instant hot water systems offer solid performance, but they are not without limitations. As with any engineering decision, there are pros and cons to consider before installation.
Tankless heaters cannot store hot water
Lacking a tank, instantaneous heaters are unable to store hot water for later use and there are a number of scenarios where this could be a problem.
If the gas or electric utility interrupts service due to routine maintenance or an emergency, affected customers will not have access to hot water until the heat source is restored. With water heaters, it is possible to keep a tank full of hot water as a reserve.
Electric water heaters can take advantage of hourly electricity rates, maximizing consumption when energy is cheap and using only stored hot water when rates are high. This is not possible with a tankless heater; If hot water is needed during peak demand, there is no other option than consuming expensive electricity.
Tankless heaters offer lower efficiency than heat pumps
As stated by the Department of Energy, the average U.S. household saves $100 per year with a tankless heater, but this increases to $300 on average with a heat pump. Additionally, heat pumps can utilize hot water tanks – offering maximum efficiency without giving up the convenience of energy storage.
The only limitation of heat pumps is that they are basically refrigerators that work in reverse, so their response is slower than that of tankless heaters. They also have a higher initial cost, but are generally the most energy-efficient option available. There are now models of heat pumps that can use geothermal energy to increase their efficiency, providing even greater savings to the owner.
Tankless Heaters Can Provide Inconsistent Temperatures
Conventional heaters have a hot water reservoir, making it easier for the system to supply water at a consistent temperature. On the other hand, tankless heaters must increase the temperature of the water to a specific value as it passes through and may have difficulty responding to sudden changes in demand:
- In homes with a tankless central heater, sudden drops in hot water consumption can cause a drastic increase in temperature. The heater will then adjust operation to meet the new demand, but the superheated water present during the transition period can cause discomfort or even minor burns.
- The opposite also applies: a sudden increase in hot water consumption can cause temperatures to drop, while the heater increases its output to meet the higher flow rate.
Fluctuating temperatures are typically a problem when an instantaneous central heater is subjected to a variable load. When multiple tankless heaters are used independently, the hot water temperature tends to be more consistent because the pipes do not affect each other.
How do tankless heaters compare?
Assuming a design offers suitable conditions for both electric and gas tankless heaters, the key factor determining the best choice is operating cost. All heaters have an Energy Factor (EF), which is a measure of how efficiently the unit uses the energy input. However, the heater with the highest EF will not necessarily be the cheapest to run – you also need to consider the cost of fuel.
- If both heaters use the same energy source, the one with the highest EF will have the lowest operating cost.
- When the energy source is different, the operating cost must be estimated based on both the FE and the unit energy price.
Final Observations
Instant hot water systems offer the advantages of a compact size and greater energy efficiency than conventional water heaters, while also having a longer lifespan. However, they give up the ability to store hot water for later use, and temperatures can fluctuate when the demand for hot water changes drastically.
To determine the best water heater for your application, we recommend that you contact a qualified engineering firm. They can help you select the option that best meets your project conditions and needs, while optimizing the total cost of ownership.
