The Columbus Dispatch
Yanking the Tank: On-deman Water Heaters Cost More, But They Save Homeowners Money Over Time
by Lee Stratton
July 31, 2005

Providing an endless supply of hot water to the Ted Goodman household is a tankless job. Goodman saw no reason to shop for a hot-water tank when he had the plumbing system in his 1926 Victorian Village home updated this year. Instead, he opted to buy another tankless unit to replace one that had served the house since shortly after World War II.

“We lived with the old water heater for 25 years, and it had been there about 30 years before that,” said Goodman, an architect. “Frankly, I gave up waiting for it to wear our. I decided to replace it with a new, more efficient model.”

Such longevity and the promise of a never –ending supply of hot water is gradually drawing more American homeowners to adopt the tankless systems that have been common in Europe and Japan for years. Rather than a 40-gallon tank sitting in the basement, Goodman's house sports a suitcase-size box mounted no the basement wall. Instead of storing hot water, it fires up and instantly heats water only when hot water is being used.

Anytime hot water is not running, “It sits on the wall, stone cold,” Goodman said. “There is no stand-by heat loss. There is not a standing pilot light. The gas consumption is a lot less than a tank type even though tank efficiencies have improved, too.”

The tankless heater provides all the hot water he and his wife need in the home with 2 ½ baths, he said. Similar to other energy-efficient devices, tankless water heaters typically cost more to purchase and install, but they save money in the long run.

Depending on their capacity, whole-house units cost $350 to $2,800, about twice as much as a comparable tank. The average American household spends about $200 a year to heat water with gas and $450 with an electric tank, according to the U.S. Department of Energy. Heating water accounts for at least 20 percent of a household's energy costs. Standard tanks typically waste between 10 percent and 20 percent of the energy they use because heat escapes from the stored water through the sides of the tank and the vent.

Tankless units eliminate much of that waste, especially the models that have an electronic-ignition system instead of a pilot light. Heaters come in a variety of sizes. Some electric models can be placed in a cabinet or closet to heat water for the kitchen or a bathroom. Many gas-fired models are large enough to meet an entire household's needs.

Tankless systems have some limitations, however. If too much water is demanded at once, the water flows too fast through the unit to be fully heated. The temperature of water as it enters the house also is a factor. Lower temperatures, including those during Ohio winters, prevent some units from reaching their peak temperatures when the maximum volume of water is used.

Goodman's new tankless unit, made by Takagi, automatically adjusts the flame to compensate for increased flow and the incoming water temperatures, said Tom Guile, regional sales manager in Milwaukee. “Our units are set to reach 120 degrees within four seconds,” he said.

Most tankless models have a life expectancy of 20 years, compared with the 10- to 15-year life of water tanks, according to the U.S. Department of Energy. They have replaceable parts that can extend their years. They also are less apt to collect the mineral deposits that reduce the efficiency of hot-water tanks and eventually cause them to fail. Despite the energy savings, tankless heaters are not apt to surpass the hot-water tank's dominance in the United States , Tankless units account for about $150 million of the $2 billion in water heater annual sales.

“Most people in the world who have water heaters have tankless water heaters,” Guile said.

But the concept was not well received in the United States in the 1980s because the units could supply only a small volume at once. The temperatures were subject to fluctuations. Recent improvements enable manufacturers to produce units that maintain constant temperatures and meet a typical household's demand.

The upfront cost is a barrier. Beyond the cost of the unit, customers typically pay more for installation if they replace a standard tank with a tankless unit, said Nate Ramsey, owner of Benjamin Franklin Plumbing in the Short North. Waterlines might need to be extended to a new location because the tankless model hangs on the wall. Gas models often require a larger gas line from the meter and different exhaust vents.

“But if you are going to be in the house for a long time and don't want to buy another water heater during that time, and you want an unlimited supply of hot water-this may be what you want,” Ramsey said.

Andy and Lori Johnson told Ramsey they wanted a Rannai tankless heater after their 100-gallon tank sprang a leak in the finished basement of the 10-year-old home in Powell. “Water was spraying all over,” Mrs. Johnson said. “If we hadn't been right there, it would have ruined the whole basement. My husband didn't want another tank sitting around waiting to spring a leak.”

The new unit is much smaller than that tank it replaced, and it provides enough hot water for the family of four to bathe and shower, she said. “I can run the clothes washer and the dishwasher at the same time and not run out of hot water.” The difference in replacement costs were significant, she said.

Another 100-gallon tank would have cost $1,000, installed. The tankless system was almost three times that muchbegan selling and installing Rinnai tankless units three years ago.

“I have done four or five so far,” he said. “I think people see them on home-improvement shows and they ask me about them. Sometimes, I bring it up as an option.”

Goodman, of Victorian Village , said a plumber has claimed his ancient Ruud tankless unit to display as an antique. “I hope the new one lasts half as long,” he said.

So far, it suits him. “You can stay in the shower as long as you want.”