December 1, 2020

Your water heater is an important aspect of home comfort and convenience. It ensures that you have hot water when you need it, and when your water heater falters or fails, it can certainly put a crimp in your lifestyle. When it comes time to choose a new water heater, homeowners have two primary choices: traditional water heaters, which are also known as tank- or storage-based, and tankless, which are also known as on-demand water heaters. Tankless water heaters provide many conveniences and benefits, and the industry believes that they will become the de facto standard in time. But is a tankless water heater the right choice for your family and your home right now?

Delay vs. On-Demand

Let us begin with why you may want a tankless water heater in terms of comfort and convenience. There are two primary reasons, and the first is the delay. Picture a scenario in which the hot water has not run in a while and you turn on the shower or a faucet. The water will initially be cold. There is a delay, and this is true of every water heater on the market. But there is a difference in wait times. Traditional systems take about 15 seconds and can take as much as 25 seconds to deliver the hot water. While not a deal-breaker, certainly an inconvenience. On-demand systems, on the other hand, take only several seconds if the equipment is modern and properly sized for the home.

Endless vs. Finite Hot Water

The other comfort and convenience advantage is the supply of hot water. Traditional water heaters store a finite amount of water: about 30 to 50 gallons. If you use it, the water heater will not be able to heat the water fast enough to meet the demand. Ever been the last in your home to take a shower? Then, you have experienced this inconvenience firsthand. Tankless water heaters are on-demand systems by design, which means that for all practical purposes, your hot water supply is endless.

Installation Cost

Of course, there are some disadvantages to tankless water heaters, and the big one is that they tend to cost more, which means that your upfront investment will be higher. You can expect equipment and installation costs to be at least twice as much with an on-demand system, and that is probably the best-case scenario. If you are converting from a traditional to a tankless system, then the cost will be even higher. There can be other factors as well, such as if you require any electrical wiring or if you will be converting to natural gas, which will maximize your long-term investment.

Equipment Lifespan

One reason that you may be willing to pay more for a tankless water heater is that they last longer than tank-based systems. A traditional water heater will last about 10 years or perhaps 15 with proper maintenance and a bit of luck. Tankless systems, however, are expected to last 20 years and might last even longer than that. Something else to consider is the warranty. A typical water heater warranty lasts for about five years, but tankless water heater warranties often provide coverage for twice as long.

Energy Efficiency

An excellent reason to invest in a tankless water heater is that they are more efficient. The average home—which uses less than 41 gallons per day—can reduce energy usage by 24 to 34 percent. Homes that use about twice that amount will not be as energy-efficient but can still save between 8 and 14 percent. However, homeowners with large homes can opt to install multiple tankless systems throughout the residence, which can reduce energy consumption by as much as 50 percent. Be mindful that electric systems are less energy efficient than those that use natural gas or propane, so conversion from electric to natural gas may be a consideration if long-term energy efficiency is important to you.

Reduced Utility Costs

While the energy efficiency averages list above may make it seem like your utility bills will be drastically lower, that is not usually the case. In fact, the average home will save about $10 a month overall. These savings will make a difference long-term but will not help recoup the initial investment fast.

Total Cost of Ownership

Even when converting from a traditional to tankless setup, the total cost of ownership is lower with tankless in most cases, and it will certainly be lower with each system replacement to come. Consider a scenario in which you can pay $2,000 for a tank-based system or $5,000 for a tankless system with the expectation of saving $10 a month. Over 10 years, the traditional system would cost $200 a year, and over 20 years, the tankless system would cost you $150 a year.

Rebates and Tax Credits

Another way that you can mitigate your upfront costs is with rebates, tax credits and other incentives. Such savings may be available at the federal, state and local levels as well as through private and nonprofit organizations. Incentives are not exclusive to tankless systems, but the amounts do tend to be higher relative to a comparable tank-based system due to the increased energy efficiency.

Home Resale Value

If you plan to sell your home within the lifespan of a tankless water heating system, then the resale value will be an important consideration as well. This varies from region to region, but Zillow research indicates that homes with tankless water heaters sell for 4 percent more than comparable homes without and sold, on average, 40 days sooner than expected.

Interior Footprint

Another advantage of a tankless water heater is its footprint within your home. Traditional water heaters often require a dedicated space. Tankless water heaters are about the size of an electrical panel and can thus be installed in many inconspicuous spaces throughout your home. If you are converting from a tank to tankless, you can now use that previously reserved space for something else.

Reduced Risk

All types of water heaters can leak, but traditional water heaters present a more significant risk due to the storage of up to 50 gallons or so. If that spills onto the floor, then you may be looking at some serious water damage. One reason that experts recommend replacing a water heater after 10 years rather than trying to maximize the lifespan is due to the increased risk of leaking at that point.

Your Northern California Water Heater Experts

Gallagher's Plumbing, Heating and Air Conditioning in Los Molinos and Sacramento has more than 30 years of experience serving Northern California and the surrounding areas. We are a BBB-accredited business with an A+ rating, and we install, maintain and repair water heaters. Our company also performs conversions from traditional to tankless. You can also count on us for a full range of water purification and other plumbing services, and when it comes to staying cool and keeping warm, our team is here to perform whatever heating and air conditioning installations, maintenance and repairs you require.

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