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Saving Money with Tankless Water Heaters

The most common form of water heater in North America consists of a large heated tank of water that is always at a constant temperature.  As the FSBO homeowner uses water from the tank or as the water naturally cools down, a heater turns on, or gas ignites, to warm the incoming cold water to the desired temperature.

Since there is no way to determine when someone might need hot water, the tank water heater maintains the water at temperature 24 hours a day even in the middle of the night when the likelihood of anyone using the hot water is low.  This method of heating water results in the unnecessary use of electricity or natural gas to keep the hot water heated.  In residential installations, the heating of water is a large energy expense when a tank water heater is used.

An alternative to heated water tanks is the tankless or on-demand hot water solution.  In this type of hot water production, the water heater only heats the incoming cold water when required.  When the For Sale by Owner homeowner turns on a hot water faucet, the flow of water through the tankless unit turns on the heating mechanism and warms the water as it is flowing through the unit.  This means that the tankless water heater only uses energy, electric or natural gas, when the homeowner wants the water heated thus saving energy over the tank water heater.

Tankless water heaters come in either natural gas or electric form and are smaller than tank water heaters.  They are rectangular box shaped heaters with a cold-water inlet pipe, a hot outlet pipe, and two pipes for air inlet and exhaust.  Because they are smaller, they can hang on the wall thus reducing the footprint of the water heater in the home.  Tankless heaters also do not require large amounts of space around them since the air inlet and outlet vent directly to the outside air.

The energy rating of the unit in British Thermal Units (BTUs) measures its heating capacity. An additional measurement of throughput is gallons per minute or liters per minute.  A successful tankless installation must also take into account the amount of hot water throughput that is required.  If the tank is undersized, it will not be able to provide enough hot water to meet demand.  The throughput required is usually determined by calculating the maximum gallons per minute required and is determined by adding up the throughput of the number of faucets, or other outlets that might simultaneously be in use.

Exact energy savings will vary depending on the temperature set point and on the temperature of the incoming cold water.  During the winter in the northern states and Canada, energy savings may be less because the burners will have to burn hotter in order to maintain a given temperature set point.  Tankless water heaters, however, represent a large saving in energy use due to their on-demand operational process.  They only use energy when hot water is required and the system is otherwise in the off or standby state.