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The Benefits of Tankless Water Heaters

Did you know that your hot water heater is the second highest energy using appliance in your home?  A standard 50-gallon electric water heater will cost about $520 per year at 10.6¢ per kWh.  If you live in the northeast US where electric rates are higher, it will cost you as much as $800 per year.  These “tank” water heaters consume a lot of that energy keeping the water hot when you’re not using it, wasting hundreds of dollars each year.  Fortunately, there is a better product available – tankless hot water heaters.

Tankless water heaters are relatively new to the US but have been used in Europe and Japan for decades.  The concept is simple: the unit heats the water only when you need it. This picture shows how a tankless propane water heater works:

What are the Advantages?

A tankless propane water heater has a number of advantages over an electric tank water heater.  They include:

  • No Cold Showers – If you have teenagers in the house, you probably are used to cold showers in the morning.  A propane tankless water heater makes that a thing of the past.  Since the water is heated as you need it, there’s no running out and no cold showers.  A 50-gallon electric water heater can take over an hour to completely recover the hot water.
  • More Hot Water – Propane tankless water heaters allow you to run more appliances at the same time.  You could take a shower while the dishwasher and laundry are going.  Plus, a tankless unit will let you take full advantage of your Roman bath or Jacuzzi tub.
  • Lasts Longer – Most tankless units have 10-15 year warranties and can last up to 20 years before replacement.  Tank units typically have a 6-year warranty and only last 8-10 years.  You may have to get two or three tank units for every tankless unit.
  • Less Waste – Many propane tankless water heaters are made of entirely recycled materials where as most tank units must be disposed of in landfills.
  • Saves Money – You save money by only heating the water when you need it.  While tank water heater waste energy heating water you aren’t using, the tankless unit save energy by only using gas when you need hot water.  This can cut your costs by up to 30% per year!
  • Space Savings – Tankless units can be placed almost anywhere in the house.  They are hung on the wall, either inside or outside of the house (depending on climate).   You can regain valuable floor or closet space.
  • Cleaner Water – Traditional water heaters can build up rust and scale inside their tank, where the hot water you use for bathing and drinking is stored. With tankless water heaters you will experience fresher, cleaner water.

What will it cost?

The challenge that faces tankless water heaters is that the purchase and installation costs are significantly higher than the standard tank water heater.  For a typical two bathroom home, a tankless water heater can cost 2 to 2.5 times that of a standard water heater to purchase and install. However, there are other ways that you can save with a tankless unit.  Most propane tankless water heaters are eligible for a $300 federal tax credit.  AmeriGas is also offering a $700 rebate towards the purchase of a propane tankless water heater (5-year agreement required).  There are other state and local rebates that may also apply in your area.  And don’t forget that you’ll need to replace a tank unit twice in the lifespan of just one tankless unit, so it’s a great long term investment.

Overall a propane tankless water heater can save you money in the short and long term, all while providing additional comfort and convenience for your family.  AmeriGas works with two of the larger brands in Rinnai and Noritz, and their websites are a great resource for learning more about the products and benefits.

Be sure to contact your local AmeriGas office to find out more about our tankless water heater rebate!

About Andy Hertzog

Andrew has been working for AmeriGas since 2003. For the last five years, he has been a Product Manager, developing strategies and programs for residential and commercial segments.
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11 Comments

  1. Posted March 22, 2011 at 8:21 pm | Permalink

    Awesome site. Thanks for sharing. I will keep coming back for more information. I want to refer this site to my friends and visitors. Its great to have such a rich resource of information. I’ll be back to review more of your articles.

  2. Posted March 24, 2011 at 4:05 pm | Permalink

    Very helpful. I’ve learned something coming here. I’ll link it to my blog and recommend it to others. I wish others would take the time to explain or write things like this online. Thanks again for valueable information you’ve shared.

  3. Posted March 27, 2011 at 7:58 am | Permalink

    There are so many advantages that we can have by using tankless water heaters. Since tankless heater are smaller and do not hold water, their life span is 20 years, twice its counterpart’s.

  4. Posted April 11, 2011 at 5:07 am | Permalink

    nice post, thanks for sharing

    • Posted March 30, 2012 at 3:11 am | Permalink

      I believe, now many household use tankless water heaters. But not much aware of how it works. It is important to know it. thanks for educating through this.

  5. paul mullin
    Posted July 12, 2011 at 7:35 pm | Permalink

    Can I install a tankless hot water heater in a crawl space above the shower in my camp? The space is sloped 40″ high to 0″ 10 feet away

  6. Neil Lemme
    Posted August 2, 2011 at 12:29 pm | Permalink

    Seems I need to empty my tankand get a new company to service my account.

  7. David Bachman
    Posted November 29, 2011 at 8:57 am | Permalink

    I have installed a tankless propane water heater, and although there are some benefits, belive that the review should be more balanced and also point out some of the drawbacks.

    Specifically, tankless technology is significantly more complex than a tank gas water heater, with computer controls, autoignition, sensors, fans, and control valves. Not all plumbers are skilled at working on them, or have parts readily available. Especially if you have hard water, they should also be flushed with vinger annually, usually by a technician. All of these factors can add up to service costs that offset energy savings.

    With respect to energy savings, there are also added factors to consider. For example, my water heater is in the basement, and the “wasted” heat keeps the basement warm in the winter. I will need to offset this with expensive electric heat with the tankless water heater. Also, the tankless heater takes electricity for the controls. This isn’t too significant, but is perhaps $10/yr.

    The real issue is the upfront installation costs. Tankess heaters require 3/4″ gas lines, which most existing homes would not have for the water heater. They also require specialized venting, and some changes in plumbing These factors can easily add $500-1000 to the cost of the water heater itself.

    Also, keep in mind that if you have no electric, you will have no hot water. Also ythese units need a min flow rate to lite, so forget about having the spigot ol low to rinse dishes or shave.

    For best cost of ownership, consumer reports recommends getting a high quality standard tank heater with a good warranty. In my case, I was able to get a new tankess heater for $500, and can get a $500 tax credit till entdend of this year, however knowing what I know now without the tax credit this would not have made economic sense.

    Considering most all these tankless heaters are from foreign companies and made overseas, while most tank units are made in the US, it seems like our government has missed the mark in economic recovery by subsidizing foreigh products touted as energy savers without educating consumers properly.

  8. Posted November 29, 2011 at 9:22 am | Permalink

    David, thanks for the review on your installation. It’s always helpful to hear a first hand experience for those thinking of making the switch to tankless. Hopefully the return on your investment will pay off in savings, endless hot water and efficiency in the long term. Just a reminder, as mentioned by Andy Hertzog in the first blog…..
    AmeriGas does offer a FREE standard water heater and a $700 tankless rebate for replacement of electric water heaters.

  9. Posted January 16, 2012 at 1:39 am | Permalink

    Making use of a tankless water heater in your house is very helpful if you would like to save more money and energy. The things that were mentioned will help you fully understand why these are already being used by most people.

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