Everything You Need to Know About Tankless Water Heaters Before Buying (Guide)

Have you ever been greeted by an ice-cold shower in the morning because your water heater couldn’t keep up with your household’s hot water needs? If so, a tankless water heater might be right for you!

According to the U.S. Department of Energy, water heating is the second largest expense in your home, accounting for 14 to 18 percent of your utility bills. And the average household spends $400 to $600 on water heating annually!

So, you may be thinking about ways to reduce those bills – and wondering if a different kind of water heater might help.

In this article, we’ll explain what tankless water heaters are and how they work, breaking down the different types of heaters on the market. We’ll also go over the pros and cons of tankless water heaters, how efficient they are, and what to look for if you decide installing one in your home is the right move for you.

What are tankless water heaters?

Tankless water heaters, first introduced in the 1990s, are also called instantaneous or on-demand water heaters. They provide an unlimited supply of hot water, no matter how much you use. This is possible because they heat water directly, without the use of a storage tank. When a hot water tap is turned on, cold water travels through a pipe into the unit. A gas burner or a source of electricity heats the water. This allows it to deliver a constant supply of hot water through your pipes and to your faucet.

Let’s look at some of the different types of tankless water heaters out there.

Gas, electric, or solar?

Just as water heaters with tanks can be powered by gas or electric, so can tankless water heaters. A tankless water heater that’s powered by gas will produce a higher flow rate, otherwise known as gallons used per minute, than an electric tankless water heater.

Electric tankless water heaters are generally cheaper, because you won’t need to install any venting as you would with a gas tankless water heater. They are also lower maintenance than a gas heater, though they are generally less efficient and have a lower flow rate.

The installation cost of a tankless water heater that uses gas will be higher, plus they are slightly less environmentally friendly. You’ll also have to pay attention to the natural gas prices in your area and how much they fluctuate.

You can also opt for a tankless water heater with solar panels – however, these are much less common and more expensive.

Condensing vs. non-condensing

When it comes to gas tankless water heaters, there are also condensing and non-condensing versions.

A condensing system recycles exhaust back through a secondary heat exchanger, heating up incoming cold water. Then the water goes back through the main heat exchange system.

Recycling the exhaust saves on heating and fuel costs, and this practice is much more environmentally friendly. But the condensation can cause corrosion. So, a condensing tankless water heater with stainless steel components is your best bet at preventing this.

You could also go with a non-condensing tankless water heater, which has just one heat exchange. It’s cheaper – especially if you are converting from a traditional water heater with a tank – and smaller than a condensing heater.

But because this type of water heater emits exhaust at high temperature, this can harm the vents in your system, especially if they’re older. If this is the case, you might need to upgrade to a sturdier material such as stainless steel, which will cost you more upfront.

Tankless water heaters that are non-condensing are also slightly less efficient than their condensing counterparts.

What are the pros and cons of tankless water heaters?

Different types of tankless water heaters have various pros and cons, no matter which type you choose.

First, let’s talk about the pros.

  • Can you run out of hot water with a tankless water heater? As mentioned above, tankless water heaters provide a constant supply of hot water, no matter how much you use. So you never have to worry about running out!
  • Fewer parts need replacement, so maintenance costs are significantly lower!
  • They also last longer than a traditional water heater, with a lifespan of 20 years or more. They also usually have longer warranties as a result!
  • Because they only heat water on demand and don’t waste energy maintaining the temperature of a storage tank, tankless water heaters are up to 34% more energy efficient than a traditional storage water heater. You could save at least $100 annually on reduced energy costs.
  • Tankless water heaters take up much less space! Without a water tank, a tankless unit takes up a fraction of the space of a conventional tanked water heater. You can install them in small rooms, apartments, or other spaces that wouldn’t typically have room for a unit with a tank.
  • A tankless water heater will give you the peace of mind that comes with knowing that, with no storage tank, there is no possibility of a catastrophic leak. They can also be drained in seconds, making them an excellent option for a vacation home or rental.

But there are some cons to consider.

  • Maintenance costs may be significantly lower, but tankless water heaters, especially those powered by gas, are more expensive to install.
  • While a tankless water heater provides a constant supply of hot water, it can be limited by its flow rate. The limited flow rate of a tankless water heater means that simultaneous, multiple uses of hot water can challenge its capacity. You can easily resolve this by installing two or more units in parallel or connected to appliances, such as washing machines or dishwashers, that use a lot of hot water.
  • A tankless water heater may not be a good option if you have untreated hard water where mineral deposits on your pipes and fixtures already reduce flow rate.
  • Depending on the quality of your home’s water, you may need to filter the water before you install a tankless water heater. 

Could a tankless water heater increase my home’s value?

While there are both pros and cons to installing a tankless water heater, the answer is yes! Energy efficiency is a huge selling point for homebuyers, and rebates or tax credits may also be available for Energy Star certified units. They also save a lot of space, which can be appealing. In fact, a 2016 study conducted by Zillow found that homes with tankless water heaters sold for 4% more than their expected value. 

What should I look for when buying a tankless water heater?

So now you’ve decided that you want to install a tankless water heater in your house! No matter which type of tankless water heater you decide upon, one of the most important things to consider is its size. While they are far more compact than their traditional counterparts, they are also not a one-size-fits-all appliance.

British Thermal Units (BTUs) Needed to Heater Water to 120 Degrees

A professional plumber can give you some guidance here. He or she will consider how many British thermal units (BTUs) per gallon a tankless water heater needs to heat the water to 120 degrees. (A BTU is the amount of heat needed to raise one pound of water by one degree Fahrenheit.) The more bathrooms in your house, and the more people who live in your house, the higher your BTU output is going to be.

Peak Demand

Then, the plumber will figure out peak demand, also known as the flow rate of all of your plumbing appliances and fixtures, like faucets and showers, that will be using hot water simultaneously.

Fixture flow rates will vary, depending on how efficient the fixtures are. But in general, a showerhead’s flow rate is about 1.25 to 2.5 gallons per minute; a kitchen or bath faucet, 1.5 to 2.2 gallons per minute; a tub faucet, 4 gallons per minute; a dishwasher, 1 to 2.5 gallons per minute; and a washing machine, 1.5 gallons per minute. If you aren’t sure of your fixtures’ flow rates, one easy thing to do is determine how many seconds it takes you to fill a quart-sized container. Divide that number by 15, and you’ll get the flow rate.

Heater Efficiency

Finally, when determining what size tankless water heater you’ll need, the plumber will look at the heater’s efficiency.

How much does a tankless water heater cost?

According to Angi, the cost of a tankless water heater varies widely. You could spend as little as $150 if you are just buying a single-point, electric tankless water heater – meaning it would only provide hot water to a single appliance such as a sink. A whole-house electric or gas system, though, will cost you between $1,000 and $1,500. (Again, if you go with the gas system, you’ll have to take into account the cost of natural gas or propane.)

The most expensive type of tankless water heater is one that is solar-powered, which could cost up to $5,000. But under the Consolidated Appropriations Act of 2021, you’ll be eligible for a 30% tax credit.

Can I install a tankless water heater myself?

The short answer is no. Installation is a job for a professional, requiring a plumbing retrofit and possibly upgrades to your electric or gas service. Let’s examine what that entails.

Hiring a Plumber to Install Your Tankless Water Heater

If you’re installing a tankless water heater that’s fueled by gas, your plumber will need to make sure it’s connected to a gas-supply line that delivers the right amount of volume at the right amount of pressure. And, if you’re installing a tankless gas heater that’s non-condensing, your plumber will take into consideration the kind of venting you’ll need.

A plumber will also be able to determine whether you should install your heater indoors or outdoors. If you live in a warmer climate, you may want to consider putting your heater outside. It saves space inside, and it’s easier to install and maintain. You will have to consider the possibility of cold snaps, as frozen pipes can lead to serious problems. You may also need a permit to install a water heater outside.

How do I protect my outside tankless water heater?

If you do end up installing a tankless water heater outside, you’ll have to pay the most attention to the pipes that are attached to it to prevent freezing in the winter. We recommend insulation made specifically for pipes in conjunction with heat cable. Heat cables have thermostats that will read your pipe’s temperatures and crank up the heat of the temperature dips too low.

How do I winterize a tankless water heater?

We mentioned above that a tankless water heater could be a great option if you have a summer home or vacation property. Many times, these are properties that will be vacant over the winter months. If your tankless water heater is going to be left unattended for a period of time, you’ll have to drain it and unplug it. Turn off the electric or gas supply before draining. Sometimes, you might still have hot water inside the heater – simply wait until that cools off before draining. Locate the main shutoff valve and turn off the water supply. Drain the water heater by opening the hot water tap. You can also refer to the instruction manual that came with the unit. After lowering the water pressure, disconnect the inlet and outlet water hoses and place a bucket beneath the heater to collect any last drops of water.

You can then use an air compressor to blow out any water that remains, and cover the vent termination to keep debris out of the system while it’s not in use.

Maintenance requirements of a tankless water heater

Though they are generally lower maintenance than water heaters with tanks, tankless units should receive regular maintenance to ensure their longevity and prevent catastrophic failures. We suggest scheduling service visits at least once a year. If your area has hard water or your heater is set to run at a high temperature, it may need maintenance twice a year. Benjamin Franklin Plumbing offers complete water heater maintenance with different plans to fit the budget and needs of every customer.

What happens if you don’t flush your tankless water heater?

If you don’t flush your tankless water heater, you limescale could build up on the heat exchange system and damage it. If you have hard water, you should plan on flushing your unit every few months, but your local plumber can give you further instructions.

That said, it’s relatively easy for you to flush your tankless water heater yourself by following these instructions:

Turn off the isolation and gas valves. The valves must be perpendicular to the pipe to be fully closed.

Connect the hoses to the inlet and outlet valves. There might be a service port cap on both valves you need to remove first. Use pliers to make sure the hose and the valve are sealed tightly to prevent leakage.

Attach hoses to the circulation pump. Your unit should have come with a flushing kit, which contains a circulation pump. You’ll need to attach the end of the inlet hose to the discharge side of the circulation pump, then put the outlet hose in a bucket.

Add cleaning solution. Add your cleaning solution to the bucket, which should have at least a gallon of water. Follow the instructions on the unit to learn what type of cleaner is best. You could also use vinegar to clean it (about two to three gallons of it.)

Open the valves. Open up the valves to let water flow through them and start the pump. This will take at least an hour – again, refer to the instruction book that came with your unit. If you’re using vinegar, the process will take a longer, up to two hours.

Flush out the cleaning solution. After you’re done, turn off the pump, then turn off both valves and disconnect the inlet valve hose. Flush out the remaining cleaning solution by keeping the hose connected to the hot water outlet valve and turning on the cold water inlet valve. Let the water flush for 5 to 10 minutes. Then you can turn off the service port and the cold water inlet valve again. After that, you can remove the remaining hose.

Reconnect everything. Plug the service port caps back in and then turn on both water valves and the gas valve.

If you don’t feel comfortable flushing the heater yourself, we encourage you to call a professional plumber.

Tankless water heaters and water softeners

As mentioned above, if you have hard water, you’ll probably have to filter the water before installing a tankless unit. Hard water won’t harm a tankless water heater’s daily process, according to the U.S. Department of Energy. But years of mineral buildup could. We recommend investing in a water softener if you have hard water and are interested in installing a tankless water heater.

What are some signs you need a water heater replacement?

Not sure you need a new water heater? Here are some signs it’s time for a replacement.

  • Your water heater is at least 10 years old.
  • You notice leaks around the water heater.
  • Your water heater is making strange noises.
  • The water smells or tastes funky, or both.
  • You notice rust in your sink. This could also be due to hard water. However, it could also be a sign that the tank is corroded.
  • Your family uses a lot of hot water, which means it your heater will wear out more quickly.
  • Your water gets warm, but not hot.

Is it Time for a New Water Heater?

If it is time for you to get a new water heater and you’re interested in installing a tankless water heater, don’t wait until it’s an emergency! With a tankless water heater, you can soon be on your way to on-demand hot water and never have a cold shower again! To explore your options for tankless water heaters, reach out to your local Benjamin Franklin Plumbing location today at 1-888-BEN-1776 or contact us online!