Instantaneous (Tankless) Water Heaters

Tankless water heaters start at about $950 for 16 litres (4.2 gallons) per minute units and at about $1,500 for 28 lpm (7.4 gpm) units.  Professional installation costs can range from less than $1,000 to more than $2,000, depending on modifications required. A tankless heater could save you 30 per cent or more on your hot water bill. Government of Alberta rebates are available, click here for more info.	Requires some research and consulting with potential installers.	Switching to a tankless water heater could reduce your residential greenhouse gas emissions by about 325 kilograms per year.

Hot water use typically accounts for up to 20% per cent of the total energy consumption of the average home.  Switching to a tankless water heater could reduce that hot water demand by 30 per cent or more, depending on your use.  Tankless heaters have been commonly used in Europe and Asia for decades and are becoming more popular in North America. They are, however, fairly expensive to buy and install, compared with a conventional hot water tank, and may not be a good choice in households that require simultaneous hot water from two or more appliances or fixtures.

What are tankless water heaters?

Tankless units – also known as on-demand water heaters – produce hot water only when it is needed.  This differs from conventional hot water tanks, which store a typical 150 litres (40 gallons) or more of water at a constant temperature – resulting in standby losses, from dissipated heat, of up to 20 per cent.  Tankless units range in size from less than 15 litres (four gallons) to more than 42 litres (11 gallons) of hot water per minute and vary in efficiency from about 80 to 98 per cent, the latter usually employing newer, condensing technology. By contrast, many conventional tanks have an efficiency rating of 60 per cent or less.

How do tankless heaters work?

When hot water is demanded, an electronic ignition spark fires a burner, which (via a heat exchanger) heats water running through a maze of copper pipes.  Within a few seconds, the water should be hot enough to use.  The heater keeps producing hot water, at its rated litres/gallons per minute, as long as it’s demanded.  As soon as the hot water is no longer needed, the heater automatically turns off. 

What are other benefits of tankless water heaters?

• Because they are not much bigger than an electric panel and can hang on a wall, tankless heaters require very little space compared with a conventional tank.
• Their lifespan is about 20 years, about twice as long as conventional tanks, which also tend to become less efficient as they build up with sediments.
• Most tankless units use electronic ignition instead of conventional tanks’ pilot lights, which steadily consume gas and can go out.
• Tankless heaters can produce an endless supply of hot water, at their rated capacity, and thus won’t suddenly run out, say, in the middle of a shower.  The downside of running the hot water longer than needed is it defeats the energy-efficiency potential of tankless heaters.
• A tankless heater can be an ideal choice if you’re away for long stretches of time.  That’s because it consumes no energy when it’s not in use, unlike a tank, which normally keeps 150 litres (40 gallons) of water continuously heated when you’re away, for example, on a three-week vacation.

Will a tankless heater produce enough hot water to meet my needs?

If you need to use two or more hot-water appliances or fixtures at the same time, a tankless heater might not meet your needs.  If, for example, your tankless unit has a maximum capacity of 16 litres (4.2 gallons) per minute and you want to run your dishwasher and washing machine at the same time, or have two simultaneous showers, the demand could outstrip the supply.

You might be able to circumvent this problem by staggering your hot water uses (some appliances have timers, for example, allowing you to delay their operation), doing your laundry in cold water or by replacing inefficient washing machines, dishwashers, showerheads and faucet aerators with low-flow units.  You can also buy larger-capacity heaters, which can have outputs as high as 42-plus litres (11-plus gallons) per minute but they cost more.

Are there any other potential drawbacks?

Some users complain of delays in getting hot water, though this is also true, to a certain extent, with conventional hot water tanks.  The problem is exacerbated when the tankless heater is a long ways from its intended use; it can be mitigated by placing the heater closer or by having more than one heater, each close to its intended use – though this certainly raises the total cost of producing hot water.  As well, tankless heaters, with a minimum flow of two litres (0.5 gallons) or more, may not fire at all when just a trickle of hot water is needed, say, for shaving.

How much do tankless water heaters cost?

Prices start at about $950 for 16-litres-per-minute (4.2 gallons) units and at about $1,500 for 28 lpm (7.4 gpm) units.  This is generally two to two-and-a-half times more expensive than buying a conventional hot water tank.  Some tankless brands can cost up to $3,000.

What does it cost to install them?

Installation prices can vary widely, from $1,000 to $2,000 and up, depending on what venting and piping modifications are required.  Professional installation is recommended.  Get quotes from two or three plumbing contractors and ask them for references and how much experience they have installing tankless heaters.  A qualified contractor should be able to properly size the heater you need and explain what installation modifications are required.

What is the payback period?

It depends on what your purchase and installation costs are, plus what your annual hot water savings are.  This can range from seven years to more than 15 years to pay off the installed cost.  But if the alternative is to replace an aging tank with a new, conventional tank, which might cost $700 or more installed, recovering the additional cost of a tankless system would be somewhat quicker.  It also makes more economic sense to buy a tankless system when building a new house or undertaking extensive renovations that require new plumbing infrastructure anyway.

How big should my tankless heater be?

Proper sizing is important.  While a heater that’s too large is inefficient, one that’s too small will result in less hot water than you need.  When considering sizing, it’s important to be aware of the so-called “temperature rise” of tankless heaters.  This is the difference between the temperature of the cold water coming into your house (you can measure it with a thermometer) and the temperature you want it heated to. For example, incoming water with a temperature of 15 degrees Celsius (60 degrees Fahrenheit) has to rise 34°C (60°F) to reach a hot water temperature of 49°C (120°F). During Alberta’s winters, when the incoming cold water might be only 7°C (45°F), the temperature must now rise 42°C (75°F) to reach 49°C (120°F).  This is important because the larger the needed temperature rise, the longer the unit will take to heat the water running through it; a valve restricts outgoing flow until the water reaches the desired temperature.  As a result, a heater that produces some 34 litres (nine gallons) of hot water per minute when its temperature rise is just 20°C (35°F) might only produce 15 litres (four gallons) when the temperature rise is 42°C (75°F).  In such cases, you’ll get less flow, and at lower pressure, than you need.

Be sure to check with the manufacturers’ specifications and your contractor to ensure the flow rates will be sufficient for your hot water needs at different temperature rises.  Also make sure the heaters you are considering can accommodate the maximum temperature rise you’ll need in winter.  For example, unless your dishwasher has an internal water heat booster, you might need a temperature rise of nearly 53°C (100°F) on your tankless heater to reach the dishwasher manufacturer’s recommended temperature of 60°C (140°F).

Should I consider a natural gas or an electric tankless heater?

In Alberta, a natural gas unit is almost always the best choice.  Electric systems are more expensive to run because electricity is more expensive per unit of energy.

Are there ENERGY STAR®-rated tankless heaters?

Yes.  As of January 1, 2009, the ENERGY STAR program includes tankless heaters.  To receive the ENERGY STAR label, the heater must have an Energy Factor of at least 0.82; the minimum standard for conventional units is 0.62.