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Do Tankless Water Heaters Save Money?

You may have heard or read something recently that mentioned tankless water heaters as an energy efficient “green” alternative to the traditional tank heaters. Tankless water heaters are often advertised as being more energy efficient and a good way to save money each month on energy bills. So, do tankless water heaters really save money?

There is much conflicting information on the subject and it’s very important to read the fine print when it comes to making a decision about which type of water heater is best for your purposes. Is your main goal to use less energy or to save money?

The simple answer is that it is unlikely that a tankless water heater will save you money when you consider all the costs involved. However they may run more efficiently, though even that is not guaranteed, and depends on how they are used.

The initial cost to buy and install tankless water heaters can be up to three times the cost of traditional tank water heaters, and they require regular yearly maintenance unlike traditional tank heaters.

Tankless water heaters have many moving parts and electronic components making them more prone to needing repair as well, so even if they do save money each month on heating bills, it is unlikely that you will ever recoup your costs to buy, install and maintain a tankless water heater.

Depending on individual use, a tankless heater may save up to 20% on electricity or gas per month, however they can sometimes cost more to operate than a well insulated tank water heater. The best way to save money on hot water is to insulate the hot water pipes between the water heater and the fixtures to keep the heat from radiating away while the hot water is moving through the pipes.

There is a common misconception that tankless water heaters deliver instantaneous hot water but that is not the case unless the water heater is installed very close to the plumbing fixture being used. It takes the same amount of time for hot water to travel through the pipes with either type of water heater. Traditional tank heaters actually have hot water ready to go while the tankless heater has to turn on and start heating the water when it detects a demand, so in fact most tankless water heaters will take longer to deliver hot water than a traditional tank water heater.

Pros: Tankless water heaters can be more energy efficient, are compact and take up less space than a traditional tank water heater and can provide continuous hot water over a long period of time.

Cons: Tankless water heaters are more expensive and mechanically complicated than tank water heaters and are not able to deliver as much hot water simultaneously as a traditional tank water heater.

Each situation is different and there are many factors to weigh in determining which type of water heater is best for your purposes. Do tankless water heaters save money? The bottom line is you may be able to lower your monthly electric or gas bill with a tankless water heater, however it will take a long time to recoup your initial costs, and with regular maintenance costs, it’s unlikely you will save money when all costs are factored in.

For more information about the pros and cons as well as energy costs of tankless water heaters, please refer to the following article:

http://www.greenbuildingadvisor.com/blogs/dept/musings/are-tankless-water-heaters-waste-money