Tankless water heaters, also known as instantaneous or on-demand water heaters, provide hot water without using a storage tank. Like tank water heaters, tankless water heaters use either gas or electricity to operate. Cold water travels through a pipe into the unit, and either a gas burner (see Figure 1) or an electric element heats the water. Tankless water heaters can be supplementary units placed at the point of use or can replace a centralized tank water heater.
Tankless water heaters are very efficient because unlike conventional water heaters, they do not have standby losses incurred by continuous use of energy to maintain water in a tank to a set temperature. They are also space savers, which can be particularly useful for a small business or where a faucet or shower is some distance from the current water heater.
Although they theoretically provide endless hot water, most tankless water heaters, especially electric units, provide it more slowly than conventional tank water heaters. This limits the number of sources that can draw hot water at one time.
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What Are the Options?
Gas or electric. Choose a gas water heater whenever possible, because the cost of gas is approximately one-third that of electricity on a per-Btu basis. Gas tankless systems also have wider applications because they produce hot water at higher flow rates. An electric tankless system is an appropriate choice only when gas is not an option and no space is available for a tank hot water heater.
Efficiency. The term "energy factor" characterizes the efficiency of both tank and tankless water heaters. The energy factor is the portion of the energy going into the water heater that gets turned into usable hot water under average conditions. It takes into account heat loss through the walls of the tank, up the flue, and in combustion. The higher the energy factor, the more efficient the heater.
Because tankless water heaters don't have the losses associated with tanks, their energy factors are normally higher (although well-insulated, ultra-efficient tank heaters also have high energy factors). Energy factors for gas tankless water heaters range from around 0.78 to 0.85, compared with 0.58 to 0.67 for a conventional gas tank and 0.86 for an ultra-efficient gas tank heater. Conventional electric tank water heaters have an energy factor of 0.90 to 0.95 compared to 0.99 for electric tankless water heaters.
Standing pilot or electronic ignitions. Gas tankless water heaters with standing pilot lights waste energy, but they can be cost-effective in applications where water use is high-a beauty parlor, for example. Where water use is lower (as in a residence), use a tankless water heater with an electronic ignition.
Energy inputs. Electric heating element and gas requirements for tankless water heaters are much larger than for storage water heaters. A typical gas storage water heater has a gas input of 40,000 Btu per hour. A centralized gas tankless heater, though, will require at least 160,000 Btu/h and so may require larger gas lines and vents than conventional water heaters. The switch to larger gas lines in a retrofit may make the installation cost-prohibitive if the unit is installed far from the gas meter. Similarly, although a typical residential electric storage water heater draws at most 7,000 watts, a centralized electric tankless heater can draw as much as 38,000 watts and may require upgraded copper wiring and possibly upgraded electrical service. Specifications for tankless water heaters also include requirements for minimum flow rates to activate them—usually around 1/2 to 3/4 gallons per minute (gpm), as well as minimum and maximum water pressure (usually 15 to 150 pounds per square inch).
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How to Make the Best Choice
Pick the right size. The method for sizing tankless water heaters is different from that for storage water heating equipment. Choose an appropriate model based on peak demand, incoming water temperature, and desired outgoing water temperature. Most water heater purchases are centralized units, but in some cases a point-of-use unit is desirable to cut down on the waiting time for hot water when a sink is a long way from the main water heater. For point-of-use installations, an electric unit is the most likely choice because it doesn't require venting. Centralized units that are advertised as "whole-house" will provide 2 to 4 gpm of hot water at a 75° Fahrenheit temperature rise. (See Table 1.) Choose the model of water heater closest to your flow rate and temperature rise needs.
To figure out your peak demand, list the number of devices you expect to draw hot water at one time, and add up their flow rates. This is the desired flow rate for the demand of water. For example, assume that you want a tankless water heater to operate a shower and two sinks at the same time. Assume your peak demand is 2.5 gpm for the shower and 0.75 gpm for each sink, for a total peak demand of 4 gpm.
Calculate cost-effectiveness. Gas tankless water heaters can be cost-effective, especially when used in high water-use applications and new construction where incremental installation costs are lower than retrofit applications. Because there are so many variables involved in calculating cost-effectiveness, it's a good idea to do your own analysis.
Analysis of a hypothetical situation reveals that payback periods for tankless heaters are significantly longer in lower-water-use applications than in high-water-use applications. In the example shown in Table 2, tankless water heaters have paybacks ranging from approximately 8 to 25 years in low-water-use applications compared to approximately 2 to 6 years in high-water-use applications.
Tankless heaters become more attractive when replacement costs are considered, because tank water heaters must be replaced between 6 and 10 years and tankless heaters last about 20 years, according to manufacturers.
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What’s on the Horizon?
The next frontier for tankless water heaters is a condensing gas tankless unit. This unit will likely be somewhat larger than existing units because the improved efficiency comes from a larger, and therefore more effective, heat-exchange area. But it will also probably be easier to install due to a simple venting system consisting of a polyvinyl chloride (PVC) pipe that passes through the side of a building. One manufacturer so far has introduced such a product and it seems likely that more are on the way.
Who Are the Manufacturers?
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