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Question DetailsAsked on 9/5/2013

are tankless water heaters more energy efficient?

We are considering replacing our water heater, and are considering going with a tankless. I have heard that the pilot light can be an energy hog with the on-demand type. Energy efficiency is important to us, and we would like to know which is generally more energy efficient - those with a storage tank or those that are on demand. If it is brand dependent, which are the brands or ratings that are more likely to give us the energy efficiency model?

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2 Answers


With Gas you can get a high efficiency storage tank type , similar to tankless. However it cost money to keep a storage tank hot, with tankless this expense is elimnated. So tankless wins for lowets cost of operation.


Answered 6 years ago by BayAreaAC


If you click on the Home > Water Heaters link below your question, you will find a few similar questions about Tankless or On Demand water heaters.

On demand is definitely more energy efficient by 20% or thereabouts, which works out to about $5-15/month savings typically compared to a similarly-powered tank-type (i.e. gas to gas, electric to electric). The higher savings occur when comparing electric fueled heaters, and the lower daily hot water demand households.

Generally they cost far more up front - typically about double, and have at least so far been plagued by a number of complaints - leaks in the tanks, burning out because they are sometimes not designed to handle the full energy load they can pull, and most commonly the inability to keep up with the demand for hot water, particularly if more than one user is demanding water at a time. They are generally particularly bad with large demands like showers and washing clothes, where "hot" may only be luke-warm in actuality. There have also been a significant number of fires, particularly in at-the-faucet demand units. Installation of large-demand electric units also commonly carries with it a substantial electric service upgrade cost to provide the high power demand of units large enough to begin to be realistic, so in many cases an expected energy savings of about $100/year on the average can turn into an initial outlay of $1000 or more extra to achieve those savings, pushing the payback period out to 15 years or so, far beyond the average time a family stays in a home.

You should also pay attention to the resale effect - many buyers are like me, and would not buy a home with on-demand hot water heating.

Your best bet is to check the yellow energy rating stickers for both figure the installed cost for each, then go online and plug in to an amortization program to figure the present worth of the savings at say 4% interest (or 15-24% if buying with a credit card) and see if it exceeds the cost of the tankless unit.

Answered 6 years ago by LCD

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