Energy-Efficient On-Demand Water Heaters

Don’t pay for the unused hot water by installing an on-demand water heater that’ll slash your energy bill while still providing adequate hot water.

  • On Demand Water Heaters
    You could save up to $75 a year with an on-demand water heater!
  • Tankless water heater
    Many tankless water heaters are located inside buildings, but some models are designed for outside installation.
  • Tankless water heater in garage
    A tankless water heater (left side) that supplies the entire house with water is a compact unit — 14 inches wide. (The unit on the right side is a water softener.)

  • On Demand Water Heaters
  • Tankless water heater
  • Tankless water heater in garage

Although some conventional water heaters are more energy-efficient, most older water heaters and many lower-priced models waste about 20 percent of the energy they consume. Much of the heat they produce escapes through the wall of the tank as the hot water sits unused for hours at a time. This is known as standby loss.

Besides being inefficient, storage water heaters (conventional water heaters) don’t last long — only about 13 years. Homeowners can increase the life of their water heaters by lowering the temperature to a more reasonable setting, by periodically flushing sediment from the bottom of the tank, and by replacing the anode rod. Some of these measures also save energy.

If your water heater is more than 10 years old and has not been maintained, it may be approaching the end of its useful life. If it’s leaking or showing signs of rust, it definitely needs to be replaced. So consider your options before it goes kaput and you have to make a rushed decision to get hot water back. Now might be the time to install a tankless water heater.

How Do Tankless Water Heaters Work?

Also known as “instantaneous” or “tankless” water heaters, on-demand water heaters are surprisingly compact units. Some are designed to meet the needs of a laundry room or bathroom, but others provide hot water for an entire house.

Like conventional storage water heaters, tankless water heaters provide hot water 24 hours a day, 365 days a year. However, they meet this need without the standby losses of storage tank heaters.

Tankless water heaters don’t suffer from standby losses because they don’t store hot water — they generate it as it’s needed. When a hot-water faucet is turned on, cold water begins to flow into the water heater. A flow sensor inside the tankless water heater detects water flow and sends a signal to a tiny computer inside the unit. The computer sends a signal to the gas burner or electric heating element in the water heater, turning on the heat source. Water flowing through the heat exchanger in the tankless water heater heats up rapidly — increasing in temperature from about 50 degrees to 120 degrees in a matter of seconds.

10/11/2017 7:54:06 AM

first off ask the plumbers in your area if they install them if you dont know how to do it yourself, second see if you can find out what the flow rate has to be for it to work, I bought one and the plumbers in the small rural town I moved to didn't know how to install my $1500 unit, and I could only get sufficient water flow if I ran 2 faucets at the same time

10/6/2017 9:11:43 PM

Great, informative article. We are looking into replacing our old standard hot water heater and the info given here about tankless water heaters is important and relevant. Thank you!

10/6/2017 5:39:45 PM

I've used a propane-powered tankless heater for 15 years now, and I bought it used. I'd guess it's about 30 years old. I'm really happy with it because it's not at all electrical (no computers) which is a big plus with an off-grid system. However, we are also on 100% rainwater, so from the comments about flushing lines (which I've never done), longevity may be problematic with harder water. Also, we have propane for our oven/stove and our household generator, so the additional cost of a propane line was negligible. If you're building a house I'd definitely recommend looking at tankless heaters, although perhaps they are not cost-efficient for renovations.

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