How Energy Efficient Is A Tankless Water Heater? 

According to the U.S. Department of Energy, heating the water in your home accounts for roughly 18% of your energy use each month, making it the second largest energy expense in your home. Whether it’s time to replace the water heater or you’re making an energy efficient upgrade to your home appliances, using a tankless water heater is beneficial in multiple ways.

How Do Tankless Water Heaters Work?

Unlike traditional water heaters that store water in a large tank and continuously warm it until someone in your home turns on a faucet, tankless systems heat water the very moment it’s needed. When the shower is turned on, cold water goes through the plumbing to the tankless heater, and a gas or electric heating element heats the water for as long as it’s running. You won’t have to worry about finishing a shower with cold water!

Tankless water heaters produce hot water at a rate of 2-5 gallons per minute, which is less than a traditional tank. This means a single tankless system may find it difficult to run hot water to multiple sources at once. The best solution is to install multiple tankless water heaters in your home to meet the water demands from multiple appliances, like the dishwasher, shower and washing machine.

Tankless vs. Traditional Water Heaters

When comparing a traditional water heater to a tankless unit, there are three main areas of difference: lifespan, initial cost and energy usage. As you consider the differences, keep in mind your budget and the size of your home and family.

The average traditional water heater has an expected lifespan of 10-12 years, which means it will likely be replaced multiple times depending on how long the homeowner lives in the property. A tankless water heater, however, can last up to 20 years.

The initial cost of a tankless water heater versus a traditional unit is a larger investment. Depending on the unit you select, the cost to install a tankless water heater averages between $1,800-$3,000. The installation investment could be more if additional electrical outlets, upgraded gas pipes or a ventilation system is needed. A traditional unit is less expensive, running between $550-$1200.

While tankless systems are more of a financial burden upfront, they cost less to operate each month. The U.S. Department of Energy estimates tankless systems can be 24%-34% more energy-efficient than traditional water heaters in homes that use 41 gallons or fewer of hot water each day. For homes that use around 86 gallons of hot water daily, the energy savings is between 8% and 14%.

Storage tanks are in a constant state of energy consumption as they periodically heat water in the tank to keep it ready for use. Oppositely, tankless heaters only use energy when water is turned on. Energy Star reports that the average family will save around $100 a year by switching to a tankless system.

By understanding the differences between a tankless and traditional water heater, you can better determine which is the best fit for your home and family.

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