source: thehcf.org

Tankless water heaters, also called on-demand or instantaneous water heaters, are a fast, efficient way to heat your home’s water. Whether you’re doing the dishes or taking a shower, a tankless heater can provide hot water faster and more economically than traditional storage water heaters.

As opposed to traditional tank heaters, a tankless unit only heats up water as needed, and doesn’t waste electricity heating up standby water. When a hot water tap is turned on, water travels through a heated unit and comes out hot. Once the tap is turned off, the heating unit stops working as well. There’s no need to wait for water to fill a storage tank, and the hot water doesn’t run out. Though tankless heaters cost more and have higher installation fees than tank models, they can cost 10%-22% less to operate, saving you upwards of $70 a year, depending on your usage.

A small tankless water heater that provides hot water for a single sink and shower can cost $120 -$350. These heaters, however, typically don’t supply enough hot water for simultaneous, multiple uses, like taking a shower and doing laundry at the same time. To overcome this problem you can either install additional small tankless units or a central tankless heater.

A central tankless water heater provides enough hot water for an entire house and typically costs $800 -$2,000 or more, depending on the gallons per minute capacity and whether it's gas or electric. Consult with a local plumbing contractor to determine the type and size of tankless heater that best fits your household’s water needs.

Gas Vs. Electric

Electric-heated tankless heaters generally cost significantly less than their gas-heated counterparts, though gas-heated units can produce a higher flow rate. A central electric-heated unit can run between $800 and $900, whereas a gas-heated one will typically cost between $1,000 and $2,000.

Tankless gas heaters require more installation work to verify that the gas line is large enough and to create adequate venting, which can cost $200 or more. Additionally, the location of where you place your gas-heated unit is limited because of the need for venting.

Electric-powered heaters can be installed much more easily and in a wider variety of locations. This enables the unit to be located closer to the point of use, consequently providing hot water faster. Additionally, the installation cost is much less than a gas-heated unit, though your plumber will need an electrician to make sure your house meets the electrical requirements and to install any necessary wiring.

Your climate is also an important factor. If you live in a cold-winter climate like Milwaukee, Wisconsin, your incoming water temperature will likely be much lower than if you live in a warm climate like Jacksonville, Florida. Consult with a local plumbing contractor and figure out how much temperature rise you will need in order for your water to reach the desired heat.

Though tankless water heaters are more expensive than traditional tank units, it’s worth the investment. Using a tankless water heater will save you energy, water, and over time, money.