Most homeowners nowadays are trying to make their homes as energy efficient as possible. A more energy efficient home will not only help the environment but will also help you to cut on the gas and electricity bills. The largest expense usually falls on water heating. So that’s one area to look at if you’re looking for potential savings. That’s why a lot of homeowners these days are switching to tankless water heater models as they are considered to be more efficient. But how much money will a tankless water heater really save? They do require a pretty big upfront investment. Generally, they cost more than the more energy wasting models. And the installation costs are usually higher than with traditional tank models. So if you’re also wondering if a tankless water heater will really help you to save money, keep on reading this article.
How Do Tankless Water Heaters Save Money?
Traditional water heaters work by storing hot water until needed for use. The unit is constantly working to keep up the water temperature, even when you don’t need it, meaning that a lot of energy is being wasted.
Tankless water heaters, on the other hand, start heating water only when you turn on the tap. So they work only when there’s a demand, thus helping you save on energy costs.
How Much Do They Cost?
The price tag for tankless units is usually higher than for standard tank type heaters. However, you can find a wide range of prices, which can vary from the brand, advanced features, power, and energy efficiency. Still, the initial cost for a good tankless water heater can be double, or even triple, the cost of a traditional tank water heater.
What Are the Installation Costs of a Tankless Water Heater?
In addition to a higher price tag, tankless water heaters also have higher installation costs which can be as high as $300-$1000. The cost will vary depending on the model and type of installation required. If you’re adding a tankless water heater to a new home construction, all the wiring and plumbing will be included in the general costs, so the price difference will probably not be as significant. However, if you’re doing a retrofit and adding a whole house tankless water heater unit, you will need to hire an electrician to add extra wiring for the heater. So the expenses will go considerably up.
If you’re adding a tankless water heater to a new home construction, all the wiring and plumbing will be included in the general costs, so the price difference will probably not be as significant. However, if you’re doing a retrofit and adding a whole house tankless water heater unit, you will need to hire an electrician to add extra wiring for the heater. So the expenses will go considerably up.
The higher installation costs are related to the more complicated process. For example, the gas units will require special venting. They often require a larger diameter tubing so you might have to replace your existing gas line with a wider one. For the electrical models, on the other hand, you will need a dedicated electrical run.
How Long Do They Last?
Typically, tankless water heaters can last up to 20 years, while tank type models average lifespan is about 10-15 years. So in the long run, that can make hefty savings on the overall homeowner’s costs.
Tankless water heaters provide about 15-40% savings on energy costs in comparison to tank type units. The percent also depends on the source of energy.
Electrical units will cut down electricity bills by about 15% because traditional water heaters usually have a lot of standby loss heating the water all day while tankless do it only when you need it.
If you’re thinking to switch to an electric tankless model from a gas tank type heater, then this will probably not help you save on energy costs. Natural gas is the most economical type of heating energy. So if you’ll switch to an electric tankless type, your energy costs will most likely go up. As an option, you can also consider installing a gas tankless water heater but their prices are usually higher than for electric ones.
To sum it up, tankless water heaters can actually help you to save some money. Consumer Reports estimates about $70 savings per year. However, each situation is different and there many other factors that you need to weigh in before determining which type of water heater will better serve your purpose. You need to consider the installation cost, the source of energy, your household water usage.
Buying a tankless water heater is quite a big investment. So don’t forget to consider also other factors. These include that tankless units take up a lot less space than tank models. Also, you’ll be able to get some of your upfront expenses back by cutting on the electricity costs. Another benefit to consider is that you’ll never have to deal with a cold shower (unless there’s a power outage) as there’s no tank that can run out of hot water.