Several months after my husband and I and our two kids moved from the US to a space-efficient flat in London, I dragged our contractor into the back of one of our bathrooms to show him a strange, small silver box mounted on the wall and asked if he could remove it. "Not a good idea," he said. "It's your water heater."
Long favored in Japan and Europe, where square footage is at a premium, tankless water heaters provide hot water on demand. According to the EPA, residential electric water heaters are the second highest energy users in American households: "The energy consumed by your refrigerator, dishwasher, clothes washer, and dryer combined use less energy than your current standard water heater." Tankless water heaters offer big savings in energy use and space. The question is: Can these little units cater to the water-heating needs of larger homes? Read our primer to find out if a tankless water heater should be on your house remodeling or tank replacement short list.
![Michaelis Boyd Architects Bathroom, Remodelista]( "Michaelis Boyd Architects Bathroom, Remodelista")
Above: A London bathroom by Michaelis Boyd Architects.
With the help of a demure tankless water heater that barely took up any space in our London flat, four of us bathed, showered, washed clothes, and otherwise ran hot water without ever experiencing shortages or wars over water pressure.
What is a tankless water heater, and how does is work?
Unlike standard water heaters that keep water hot and ready for use at all times in insulated 20- to 80-gallon tanks, tankless models don't store hot water, they heat on demand. When a hot water tap is turned on, cold water runs through a pipe into the unit where a flow sensor turns on a gas burner or an electric element to heat the water to the desired temperature. When the hot water tap is closed, the flow sensor turns off the burner.
![Tankless Water Heater Diagram, Remodelista]( "Tankless Water Heater Diagram, Remodelista")
Above: The inner workings of a gas-powered tankless water heater. Image via Better Water Heaters.
How are tankless water heaters powered?
Tankless water heaters can be fueled by gas (natural or propane) or electricity. Gas-powered units require venting (just like standard tank heaters). Most gas models also have electronic controls, so an electric outlet is needed. Full electric tankless heaters don't need venting but have minimum voltage and AMP requirements—consult a professional to be sure your power is adequate.
![Steibel Tempra Plus Electric Tankless Water Heater, Remodelista]( "Steibel Tempra Plus Electric Tankless Water Heater, Remodelista")
Above: The Steibel Tempra Plus Whole-House Electric Tankless Water Heater doesn't require venting, which allows for location flexibility.
Are there different types of tankless water heaters?
Two types of heaters are generally offered: whole house and point of use. Whole-house systems are powerful enough to generate hot water at flow rates to serve a household. Point-of-use units have low flow rates and are designed to supply hot water for a single appliance or location. These compact contraptions are typically installed directly adjacent to wherever they're needed, such as under a sink; they're most often used to augment a system when instant or additional hot water is needed.
How much hot water can a tankless heater generate?
Unlike standard water heaters, which draw on reserves, tankless water heaters provide a continuous supply of hot water. Sound too good to be true? Well, sort of. While the stream of hot water is unlimited, tankless models can only heat and deliver water at a certain flow rate. That output, or capacity, is measured in gallons per minute (gpm). So, while a tankless water heater won't "run out" of hot water like a storage tank can, there may be an issue of not being able to pump out enough hot water for multiple uses at the same time.
![Faucet with running water, Remodelista]( "Faucet with running water, Remodelista")
Above: A bathroom faucet typically delivers 0.5 to 1.5 gallons per minute of water flow—one of the measurements to keep in mind when figuring out your household's hot water needs. Photograph by Steve Johnson via Flickr.
What size tankless water heater do I need?
Tankless water heaters are available with different levels of hot water output (measured in gpm and often referred to, confusingly, as "size"). Correct sizing depends on two factors: the level of water flow needed to supply your home and the temperature of the ground water.
Water Flow: The level of water flow required depends on what and how many appliances and faucets you have, and whether they're used simultaneously. You can add up the flow rates of these items to calculate your needs. Consult Home Depot's Water Heater Buying Guide for a useful chart of typical flow rates for appliances and faucets. For example, running a shower (typically 1.5 to 2 gpm), a dishwasher (1.5 to 3 gpm), and a bathroom faucet (0.5 to 1.5 gpm) at the same time requires a total gpm capacity of 3.5 to 6.5 gpm.
![Speakman Shower Head, Remodelista]( "Speakman Shower Head, Remodelista")
Above: Advancements in whole-house tankless heaters have raised their gpm capacities—many now offer flow rates with top-end capacities of 6 to 11 gallons per minute. Photograph via Speakman.
![Bosch Compact Front Loading Washer and Dryer, Remodelista]( "Bosch Compact Front Loading Washer and Dryer, Remodelista")
Above: Another solution for high-gpm needs is setting up two connected tankless water heaters, or pairing an individual heater with a water-consuming appliance, such as a washing machine, essentially taking it off the family water grid. Photograph via Bosch.
Ground Water Temperature: Another factor in tankless water heater output is the temperature of the ground water that feeds the input pipes. Where you live matters. Colder ground water takes longer to heat, which in turn affects speed and flow of the hot water coming out of your faucets.
![Steibel Tankless Water Heater Groundwater Temperature Map, Remodelista]( "Steibel Tankless Water Heater Groundwater Temperature Map, Remodelista")
Above: Nearly every manufacturer's website has charts indicating the tank power required by geographic location and gpm needs (often simplified to equal the number of bathrooms in the house). Image via Steibel.
![Noritz tankless water heater, Remodelista]( "Noritz tankless water heater, Remodelista")
Above: Some manufacturers, such as Japanese company Noritz, are adding built-in recirculation pumps to move water more quickly from the heater to its destination. Speeding up warm water arrival means less water waste.
How compact are tankless water heaters?
Space savings is one of the biggest advantages of tankless water heaters. Unlike their 5-foot-tall, 24-inch-wide monolithic cousins that demand substantial real estate in a home (sometimes their own room), tankless units are wall-mounted and typically measure in at a demure 1.5 feet tall, 24 inches wide, and 9 inches deep.
![Noritz Tankless Water Heater in Bathroom Closet, Remodelista]( "Noritz Tankless Water Heater in Bathroom Closet, Remodelista")
Above: Tankless water heaters can be installed discreetly in a closet, cabinet, or room without taking up valuable floor space. To maximize hot water delivery, consider installing the system near where it will be used most or in a centralized spot. Photograph via Noritz.
Are tankless water heaters more efficient than the standard tank variety?
Yes. A drawback of standard tanks is the energy used to keep the water hot at all times, otherwise known as “standby losses.” Tankless water heaters eliminate these heat losses. The EPA estimates that tankless water heaters offer a 35 to 40 percent energy savings over high-efficiency storage tank heaters.
How much do tankless water heaters cost?
The initial outlay for a tankless water heater is substantial, averaging about $1,000 to $1,200 for a whole-house unit. This is compared with about $300 to $500 for a standard tank heater, but is priced similarly to, even a bit less expensive than, high-efficiency tanks, which run in the $1,500 range.
While the upfront costs are high, they're offset by the higher life expectancy of the units over standard tank models and the savings in energy costs. According to the U.S. Department of Energy, most tankless water heaters have a life expectancy of more than 20 years, double that of storage tanks. They also have easily replaceable parts, which extends their life by many more years. The savings in energy costs are real but far from life-changing: They're estimated at $90 per year in an average household. The EPA offers an energy cost calculator for personalized assessments.
![Noritz Tankless Water Heater in Garage, Remodelista]( "Noritz Tankless Water Heater in Garage, Remodelista")
Above: A Noritz tankless water heater mounted on a garage wall.
Who makes tankless heaters? Not surprisingly two leaders in the tankless water heater market are Japanese companies: Rinnai and Noritz. Other manufacturers include Steibel and Bosch (both from Germany), and Rheem, AO Smith, and EcoSmart in the US.
Tankless Water Heater Recap
Pros
- Space savings
- Increased energy efficiency
- Lower operating costs
- Long life
- Constant temperature output
- Endless supply of hot water
Cons
- Expensive
- May not generate enough output for high-use homes
- Electric controls mean no hot water if power outage
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