Mechanical systems are second only to air sealing and insulation in their impact on home energy consumption. One “low-hanging fruit” for energy-wise appliance retrofits is the tankless gas water heater.

Unlike traditional storage-type water heaters, tankless water heaters are compact heating units that provide hot water only as needed. When the occupants call for hot water by turning on a tap, water enters the tankless water heater. A sensor detects the water flow and activates a gas burner, which quickly raises the water temperature to a preset level. When water flow stops, the heating element shuts off.

Some tankless water heaters use a thermostat to vary output temperature according to water flow rate and inlet water temperature.

Reduced Standby Losses

Standby losses in traditional storage-type water heaters are high because of inadequate insulation and because the thermal energy stored in the water can escape as convective airflow up the flue when the tank is not firing. Traditional gas water heaters have an energy factor (EF) of about 0.60. (The energy factor measures the amount of water heated per unit of fuel consumed, taking into account heat transfer efficiency and both standby and cycling losses.)

Tankless water heaters eliminate standby energy losses because hot water is not stored in a tank waiting for use. Consequently, tankless units can reduce water heating bills by 10% to 20% — which is significant considering the average household spends 14% of its energy budget on water heating. Even more efficient condensing models are available now with EF 0.95 or higher.

Longer Life

Tankless water heaters have a longer life expectancy than traditional units because they do not store water and thus are less vulnerable to corrosion. A tankless unit will have an expected functional life of more than 20 years, as opposed to 10 or 15 years of service from traditional water heaters.

Also, tankless units are not under pressure so they are less likely to leak at joints and fittings. Extended service life and lower energy bills help offset the fact that tankless water heaters are more expensive to purchase than traditional water heaters.

Smaller Footprint

Another attractive feature of tankless gas water heaters is that they have a much smaller footprint than traditional storage-type water heaters. Tankless gas water heaters are almost always installed inside the home, and, as with any combustion appliance, proper venting and fresh air intake considerations are important.

Venting can be expensive (Category 3 stainless steel), so choose a location that is as central to faucets as possible, but also on an exterior wall to minimize the length of the vent pipe.

Sizing & Maintenance

When selecting a tankless gas water heater, it is important to properly size the heater to suit the needs of the home and its occupants. Flow rate and temperature are the two main criteria to consider.

Currently there are residential gas models available that increase the water temperature by 60°F at a flow rate of 5 gallons per minute, which is more than enough for two showers to be run simultaneously (see table below).

Tankless gas water heaters require regular maintenance to ensure that scaling does not interfere with the operation of the unit. The heating coils should be flushed with a de-scaling solution per the manufacturer’s suggestion.

This article is adapted from content developed by the U.S. Department of Energy’s Building America program.

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