Do Tankless Water Heaters Really Save Energy?

Tankless Water Heater Marketing Is Everywhere

If you have had a reason to think about water heaters lately you have probably heard a lot about tankless water heaters.  In the last couple of years the tankless water heater manufacturers have really stepped up their promotional campaigns and spent some big bucks building consumer awareness and interest in their products.   Tankless water heaters have been portrayed as providing huge energy savings and endless hot water.  How much of this is true?

Just The Facts, Ma’am

Today we are going to start cutting through some of the marketing hype and find out exactly how tankless water heaters stack up in the energy savings arena.  Just how efficient are they, anyway?

Electric Tankless Water Heaters

Now is a good time to go ahead and say that we will be discussing gas (or LP) tankless heaters.  Electric tankless heaters really make no sense  99% of the time.  They just don’t do the job in most cases and usually require extensive (and expensive) rewiring.  Electricity is really a fairly expensive way to heat water in most cases.

While we are on the subject of electric water heaters lets clear up one more thing.  Even though most electric tank type water heaters are rated with a higher efficiency factor than similar gas models, they are not usually an good choice to lower your energy bills.

It’s true that electric water heaters are technically more efficient, because there is no energy wasted up the flue pipe common to all gas water heaters.  The problem is that, at least for now in most places, the electricity required to operate a water heater costs more than either natural gas or LP.  So even though it takes less energy, the energy used costs more.  Enough said.

Gas Tankless Water Heaters

Let’s talk about the possible energy savings with gas tankless water heaters.  It is a fact that gas tankless water heaters are rated almost 50% more efficient than a standard tank type gas water heater.  The reason tankless heaters beat tank type in efficiency is because there is no energy used keeping a tank full of water hot.   The only time any energy is used is when hot water is actually being used.  As soon as the faucet is turned off the heater stops heating the water.   This is one of the big selling points for tankless water heaters.

It’s Not All Hype

So it’s not all hype, tankless water heaters really are more efficient, but the payback period that is often stated in marketing literature is probably based on the best case scenario.  In the real world, the more frequently hot water is used the smaller the gap in efficiency between tankless and tank type water heaters.  This is because there is less “non use” or “temperature maintenance” energy use as the frequency increases of “hot water usage events” (a fancy way of saying a hot water faucet was turned on).

Basically, if you are using hot water any type of heater will be using energy. It takes the same amount of BTUs to heat a gallon of water in either type of water heater.  In plain English,  the more often you use hot water the less a tankless will save you on your gas bill.

Check Your Usage Pattern

So, are tankless water heaters really more more efficient?  The answer, strictly speaking is, yes.  How much more efficient depends on your individual usage pattern.  If you are thinking about going tankless you should probably pay attention to when and how often you use hot water now.  The more frequently you use hot water, the less money you will save in energy costs.