Tankless Water Heaters

Buy or Bust?

You turn on your faucet and it doesn’t get hot. You’ve checked the pilot light on your water heater, but it’s in working order. After some diagnosis, you come to the conclusion that it’s time to replace your water heater.
Do you go tankless?  This is a question we field often, but there’s no easy answer.

So we initiated a search for all the pros and cons of tankless water heaters so you can make an informed decision. You should decide for yourself if going tankless is something that will benefit you, but consider your personal circumstances and this list of pros and cons.

1) Saves energy & qualifies for tax rebates. Tankless water heaters are marketed to be more efficient than traditional water heaters when it comes to energy usage since they do not waste energy during the 24/7 standby heating. The unit operates only when there is a demand for hot water, which is reported to reduce energy cost by about 25 percent annually. Even greater news: They qualify for federal tax rebates.  Savings vary by region, but Southern California Gas customers, for instance, can save up to $400 in rebates, depending on the model purchased.
2) Compact size. The typical tankless heater is about the size of a small suitcase, taking up significantly less space than the big and bulky traditional water heater. The unit is versatile, as it can be easily installed inside or outside the house.
3) Reliable. If a unit is sized properly, a gas tank can deliver a continuous supply of hot water at a rate of typically 2 to 5 gallons per minute . When deciding which tankless unit to purchase, consider where you will need hot water. If you are looking for a unit that will heat just one bathroom or kitchen sink, then you will need a single point application. If you want an entire bathroom , then you will need a multipoint application. Or if you would like an entire house, condo or apartment, you will need a whole house application.
4) Longer Life expectancy. Another benefit of  a tankless unit is you are less likely to have to replace it due to rust. Since the water is not stored in the tank, it has less of a chance to deteriorate and pollute the water supply. According to the Energy Consumer Center, the average life expectancy of a traditional water heater is 13 years, while a tankless water heater is 20 years.

1) Upfront cost. The tankless water heaters tested by consumerreports.org carried a hefty price tag of between $500 to $1,150, compared with $300 to $480 for the regular storage-tank types. You save around $70 to $80 per year, based on 2008 national energy costs. But because they cost much more than storage water heaters, it can take up to 22 years to break even, which is longer than the 20-year life of many models.
2) Retrofitting required. Unless you are building a new home and planning to add a tankless water heater, retrofitting your existing home with a tankless unit is not only expensive, but can also be difficult. This is not a do-it-yourself project, unless you have pro-level skills. Plan to hire a licensed professional to install your unit.
3) Electric tankless water heaters. The electric units do not perform adequately to serve a whole house. The best performing tankless water heaters are gas powered. Electrical units are not Energy Star-rated and require significant amounts of energy to use.
4) There is a risk factor. Tankless water heater companies have come and gone. When they are around, they sell huge volumes. When they go out of business, they leave their customers stranded without warranty, technical support, or spare parts. They are no longer able to  stand behind their products nor do they honor their warranty policy.
5) On demand delay. When you turn on the hot tap that is connected to a traditional water heater, the hot water flows immediately. With a tankless, a flow sensor must first wake up, then a fan turns on, and the burner fires up. Only then does water start to heat. According to user reviews, it takes about four times longer to get hot water, with a lowered water pressure at that.
6) Needs more care. Read the fine print. Failure to hire a qualified technician to perform routine maintenance  may void the warranty. Tankless units contain many parts and intricate controls. The more complicated the device, the more that can  go wrong.                                                                                                                                                                                                                                                            7) Not compatible with efficient low flow dishwashers.  Some tankless units require a minimum flow rate of .5 gallons per minute. This becomes a major problem for users with a super-efficient low flow dishwasher model, in which the flow rate cannot be increased.

Top 3 Brands

1. Ecosmart ECO 27 – According to consumersearch.com, this is the best whole-house tankless water heater


  • 99.8 percent efficiency
  • Point-of-use; heats water on demand
  • Small unit doesn’t take up much space
  • Lifetime warranty


  • Requires 200-amp electrical service
  • Not recommended below 37 degrees Fahrenheit

2. Rheem 22V40F1 Natural Gas Water Heater


  • Good Energy Factor rating
  • Excellent flow rate and recovery rate
  • Extremely quiet


  • Not Energy Star-qualified
  • Shipping damage common when ordered online

3. GE GeoSpring Hybrid Water Heater


  • Four modes plus vacation setting
  • Uses 62 percent less energy
  • Energy Star-rated


  • Heat pump fan cools surrounding air
  • Standard electric mode only below 45 degrees Fahrenheit

Related Articles

Leave a comment

No Comments
Nikki Klugh
Nikki Klugh is an award-winning interior designer. She is the principal and owner of NKDG, specializing in residential and commercial design. Nikki's corporate and home décor work reflects the distinct style that has made her name a buzz in the minds of tastemakers in the Silicon Valley hub and beyond. Her design work has the hallmark of timeless style, eye-catching designs and simply superb decorating ideas. Learn more about Nikki at http://nikkiklughdesign.com/
30 of 31 in Design

Sign up for our newsletter!

Relevant. Important. Fun.

Close this popup