Tankless water heaters have come a long way in the last 20 years. Touted for their energy efficiency, these devices also take up minimal space in your home. Such a heater may literally be no larger than a bread box in the back of a closet. Furthermore, if they perform as advertised, you won’t ever have to wait for hot water and you won’t ever run out. Sounds great, doesn’t it. It can be, but there are a few caveats.
There seems to be little question that, once your tankless water heater is installed, the costs of heating water for your home will go down. But be aware that the initial costs of installing a tankless water heater are almost always greater than a conventional water heater. First, there’s the cost of the unit itself. A recent study showed that the average 40 gallon tank heater ($328) cost more than $600 less than a tankless heater with the same capacity ($989). In addition, to get the equivalent heating output you would expect from a tank heater, you need about four times the BTUs. That may mean you have to put in a larger gas line, and it will certainly mean that you’ll need a larger vent. If your heater is electric, you may need a wiring upgrade to accommodate the tankless heater.
With most types of tank heaters, you can have hot water from a number of sources at the same time. If you have a single tankless heater, that can be a challenge, though not impossible. To get hot water from a tankless, you will need to run it for a period of time—not the case with a tank heater. Be aware, too, that when you turn the hot water off, your tankless heater will shut off, but may leave hot water in the pipe. If you turn it on shortly after you’ve turned it off, there will likely be some cold water in the pipe that never gets heated. So you could have what is known as the “cold water sandwich,” where the water is initially hot, then cold, then hot again.
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