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Tankless or On-Demand Water Heaters

Advantages & Disadvantages - Part 1

Part 1

  1. Point System:
  2. A point of use tankless hot water system places a number of individual water heaters close to where the hot water will be required – kitchen, bathrooms, laundry rooms. This style of tankless hot water system is the most common in use in Europe.

    Because a point of use system is closer to the faucet that is requesting hot water, the system has an inherently shorter lag time – the time it takes for hot water to be heated and then come out of the faucet when it is turned on, than a whole house tankless water heater system.

    Figure 4 is a diagram showing a typical installation of a point of use tankless hot water system.

point of use tankless hot water system
Figure 4 - Point of use tankless hot water system

Advantages of a Tankless Hot Water System

  • Uninterrupted Hot Water:
  • We have all faced the loss of hot water when taking a shower only to find out that earlier someone ran the dishwasher, washed a load of laundry, or had a bath. The biggest advantage of tankless hot water systems is that they never run out of hot water – they heat the water as it is required, 1 gal or 10,000 gals – hot water is always available.

  • Pay For Hot Water Consumed:
  • The traditional hot water system with a tank uses energy to keep a quantity or water at a high temperature so that it is available when required. If you and your family are not home during the day, the hot water is still being maintained at a high temperature. If you go away on vacation for two weeks, the hot water is still being maintained at a high temperature. When the family is sleeping the traditional hot water system is still hard at work maintaining the temperature of the water in the hot water tank. All of this consumes energy that you pay for every month.

    With a tankless hot water system the only time energy is consumed is when someone in the home requests hot water. This saves energy and reduces your energy bill.

    It may also be noted that the efficiency, the amount of energy it takes to heat the hot water, increases over the life of the traditional hot water tank as mineral deposits begin to build up in the tank and if it is an electric hot water tank as mineral deposits build up on the element casings.

  • Space:
  • A traditional hot water tank uses approximately 9 square feet of floor space, an area 3 feet square. A tankless hot water system is most commonly mounted on a wall and does not use any floor space, which provides for a neater and more convenient installation.

  • Leaks
hot water tank pan
Figure 5 - Pan for a hot water tank

    Traditional hot water tanks that are installed where floors are constructed of wood require the use of a metal or plastic pan, as shown in Figure 5, to protect the surrounding areas from water damage should the tank leak; a relatively common occurrence as the tank begins to age.

    With tankless hot water systems the only leaks that might occur are in the failure of pipe fittings, a far less common occurrence than a leaky hot water tank.

  • Length Of Service:
  • Traditional hot water tanks have a life expectancy of approximately 10 years, depending on the mineral content of the water source. Tankless hot water systems will generally operate for 20 years or more before replacement is necessary.

Disadvantages of a Tankless Hot Water System

  • Energy Sources:
  • With current technologies a traditional hot water system can have a host of energy sources and combinations thereof. These include: solar cells, solar thermal, geothermal, NG, LP and electric.

    Tankless hot water systems require the use of either electric, NG or LP for power.

  • Heater Reset:
  • A tankless hot water system detects the opening of a faucet to turn its water heating elements on and off. If someone turns the faucet on and off a number of times in quick concession it can disrupt the circuits that ignite the burners or supply energy to the elements. This disruption can cause the tankless hot water system to reset itself. The resultant is intermittent periods of hot and cold water exiting from the faucet.

  • Initial Cost:
  • Tankless hot water systems are more expensive to install than the traditional tank hot water systems. On electric tankless hot water systems it is not uncommon to require a 50 amp service. With gas fired tankless hot water systems, the size of the gas piping to the unit will be larger than for a traditional tank hot water system. A tankless hot water system can cost as much as $1,000 more to install than a traditional hot water system.

    Tankless hot water heaters range in price from $750 to $2,000 whereas a traditional tank hot water heater costs between $250 and $500.


The most common misconception with respect to tankless hot water systems is that they supply instantaneous hot water at the faucet spout. This is not true. The time that it takes to get hot water at the faucet spout is relative to the distance in piping from the tankless hot water system unit to the faucet. Point of use systems will generally supply hot water to the faucet faster than a whole house unit due to the proximity of the water heater to the faucet.

The second misconception is that with a tankless hot water system you will not experience a change in the volume of hot water if someone turns on a faucet or flushes a toilet while you are taking a shower. The installation of a tankless hot water system has no effect on the water pressure that is coming into the home. If someone requests water while someone else is in the shower, the water pressure going to the shower will be reduced and hence, there will be a change in the water temperature in the shower.

Selection of tankless water heaters.