Tankless water heaters are all the rage right now, as they are said to be eco-friendly and more cost efficient than a standard hot water heater. But are tankless water heaters really all they’re cracked up to be, and do they really save money? In this article, we’ll tackle these and other questions and provide you with 5 things to consider before buying a tankless water heater.
How is a tankless water heater different from a traditional hot water heater?
Before buying a tankless water heater, it’s important to understand that it will operate differently than the hot water heater you are currently using. With a tankless unit, the water is not stored and heated in a tank. Instead, water is heated as it flows through the unit. This is what makes a tankless water heater desirable to many consumers, as it is said to provide an endless supply of instantaneous hot water. But does it?
Will buying a tankless water heater really provide an endless supply of hot water?
Because the water is not heated or stored in a tank, you will get a steady stream of hot water from a tankless unit. However, there is no such thing as ‘instant’ hot water, regardless of which type of unit you use. As with any unit, it takes time to the water to the desired temperature, and there will be a need to ‘push out’ a stream of cold water before the heated water arrives.
In addition, if you are using an electric tankless water heater, there will be no hot water if the power goes out. With a power outage there will be no stored hot water in the tank, as with a standard hot water heater, or any way to heat the water that passes through the unit. This means cold showers for everyone until the power is restored.
Will using a tankless water heater really save money?
There is no doubt that you WILL save money with a tankless water heater, but it may not be as much as you may think. According to the Energy Star website (www.energy star.gov), the average savings of using a tankless water heater is $ 1,800.00 over a 20 year equipment life-span. This equates to roughly $ 90.00 in saving per year, which breaks down to around $ 8.00 in savings each month.
Compare the savings to the cost of the unit
So we’ve broke down the monthly savings of using a tankless water heater to be around $ 8.00 a month. Now, let’s take into consideration how much the unit will cost. The units themselves are expensive and can run anywhere from $ 400.00 to $ 2,000.00, depending on how it is powered and the size of the unit itself. However, the unit cost is not the only consideration. Installation of a tankless water heater can average an additional $ 800.00 – $ 1,000.00, or even more, in initial set-up costs. This is compared to the average cost of $ 300.00 – $ 400.00 for a standard hot water heater with an estimated $ 200.00 – $ 300.00 installation fee.
Don’t forget to consider available tax credits
There is one definite PRO to consider about buying a tankless water heater, and that is the Federal Tax Credit. The current deadline to receive a tax credit for 30% of the cost (up to $ 1,500) of any energy-efficient product (inducing tankless water heaters) is December 31, 2010. However, there is speculation that this tax credit will be extended. Thus, if you feel that a tankless water heater is the right option for you, be sure to take advantage of any available tax credits. For more information regarding Federal Tax Credit for Energy Efficiency, visit the Energy Star website.
** To read more from this author, CLICK HERE.