With the lure of a $300 tax credit during 2006 and 2007, tankless water heaters are a hot upgrade. According to the Gas Appliance Manufacturers Association, factory shipments of tankless water heaters jumped 30.3% during the first quarter of 2006 compared with the same period last year, and unit shipments were already up by nearly half (47.8%) in 2005 versus 2004.
“In the last three years, the market has exploded because people are learning that there's really no downside to tankless, and they understand the technology better,” says Jason Blackburn, northeast regional sales manager for Takagi.
The technology is simple. Bruce Cole, specialty resource manager for Rheem, explains that tankless water heaters move water through a series of heating coils when — and only when — the hot water valve is opened. This is in contrast to tank-style units that heat dozens of gallons of water and store it for later use. With the tankless approach, energy isn't wasted on heating water when it's not needed, and hot water doesn't run out.
Blackburn says the tankless unit in his home saves $52 per month on the hot water portion of his gas bill. That amount can quickly return the investment for a unit, which can range from $800 to $1,000 before installation. Moreover, although tankless units cost more than tank-style systems, they also last longer. “Some customers may balk at the price and opt for a less expensive tank unit,” Blackburn says. “But the fact is tankless units are likely to last 20 years or more. In that time, the homeowner could pay to replace a tank water heater at least once.”