Are Tankless Water Heaters Worth The Investment?

Are Tankless Water Heaters Worth The Investment?

According to consumer reports, generally no. The month to month savings don’t make up for the high initial installation cost.

You can get savings from a smart thermostat control for a storage tank water heater without the extra installation costs of replacing the heater itself, and those projects are more likely to pay for themselves.

But you can always get a free estimate from someone local to see exactly what the installation costs would be in your case.

And if, like our house, if you use a solar system then it may not be a matter of dollars saved in the first year or two but literally energy reduction. So that’s another factor for some people.

In Australia we call these instantaneous gas water heaters, and they have been very common for well over a decade. They are fitted on almost all new builds.

I guess the economics of these things are going to vastly differ between countries, but ours gives us “unlimited” hot water ( ie as much or as little as our family needs, you never run out) for about 0.5AUD per day. That’s half what the daily service fee to be connected to the mains natural gas system costs!

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Good point, If it’s a new build all together, the tankless will probably be the best choice. This is mentioned in the consumer reports article. :sunglasses:

If you’re thinking of replacing an existing water heater in the US, consumer reports says that most US homes do not have the infrastructure in place to support the tankless devices. So you end up having a very large upfront cost because you have to upgrade both the power and the water systems.

But that’s why you need to get some local estimates to see how it will cost out for your specific home.

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I’ve wondered this but not done the research. I have two tanks and I seem to have to replace them about every 6-8 years on average. That gets pricey, even if you have a warranty that partly covers things. And if one busts it’s VERY pricey, lol (my genius builder put both tanks in the attic in my two story home).

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I’ll add my two cents. Please note that I do not monitor the costs of my hot water system. My wife and I greatly enjoy long, hot, powerful showers. I built my house three years ago. I have used tank water heaters all of my life. I installed a tankless water heater (gas) in my new house because I wanted endless hot water. I have dual shower heads in my master shower. The flow restrictors have been removed from both shower heads. Running two showers at that volume (3-4 gpm each) can empty a tank quickly. Even if the dishwasher or clothes washer is running, I can enjoy a long, hot shower without fluctuations in volume or temperature.

As @JDRoberts has noted, the costs of a tank system are probably less over the long run. Generally speaking, tanks will last longer than tankless heaters. But the numbers for tankless are improving daily as the technology improves.

Both can suffer leak failures, so to me, that point is mute.

I feel that you do have more maintenance with tankless. I flush my system once a year to remove debris and buildup. Tanks can generally go a long time without flushing.

Tankless systems are far smaller and can be installed inside or out. The plumbing for each system is nearly identical (at least in my home). And swapping out a tankless is much easier than removing and installing a new (usually large) tank water heater.

Am I spending more for water and gas versus electric/gas tanks? Probably.

Am I adding to global warming with my tankless? Probably not any more than the fossil fuel needed to power an electrical tank system.

Do I enjoy continuous, endless, consistent hot water. YES !


My daughter built a new, custom home 8 years ago and put in tankless heater. Something wasn’t done right and it takes them several minutes to get hot water at any tap.

We built new last year and, based on hers, told the builder we didn’t want tankless. He convinced us theirs was an installation problem. We went with tankless with a recirculation system that keeps hot-ish water all thru the house.

After some start-up/setup issues it’s been great! Water in the recirc loop can be up to 10° below three thermostat set-point but is nearly instant at any tap.

Wife loves super-hot baths. She could never get a tub full enough and hot enough at our previous house. I haven’t seen any issues with running two or three things at once (dishwasher, washing machine, shower, etc)

So, based on a sample of two, I think tankless requires recirculation setup and so would not work well to replace a tank system.

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I have a tank system and still need a recirculation pump installed. It can take forever for hot water to reach my kitchen - simply due to physics - distance of tanks from kitchen.

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I have a recirculator at my tankless heater that sends hot water to the kitchen sink nearly at the other end of the house. I have very hot water at my kitchen sink always (happy wife). The master bathroom is directly over the tankless so we get immediate hot water there. HOWEVER, the upstairs bathrooms do take a couple of minutes to get hot water. I do not have a recirculator on those (no kids). But it would be simple to add them to my system if desired.

Doesn’t this mean that the water heater is running constantly? I would have thought that defeated the advantages of a tankless system. Or does recirculating it keep the operating (reheating) cost down?

My Rinnai monitors the temperature of the water in the kitchen line and circulates as needed. I think that it recirculates about every 15-30 minutes. I am willing to pay the extra for hot water at my sink. Recently, I have looked at putting in an under-sink heater.

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What about if you have very cold water coming into the house… Like around 46 degrees

I just installed a tankless electric water heater, best investment ever! The initial cost was $160 more than a standard 50 gal water heater, I did have to run two power lines to the unit, but other than that I don’t see why anyone would want to go any other route, my electric bill has dropped $30 per month so far!

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Mine is the same. If recirculating water drops more than 10 degrees below the heater setpoint, it fires up to heat that water.

We’re in the country so the heater runs off the house propane tank. Between the water heater and cooking, we used 200 gallons of propane in about 8 months.

Makes sense. But I think tankless would make that problem worse. Daughter’s house doesn’t get hot water to any tap in less than about 5 minutes

We put a tankless water heater in our house when we did a gut renovation in 2014, and we have been thrilled with it. Since the larger gas piping was not a significant extra cost to the installation, I think we ended up paying a few hundred dollars over an equivalent tank-type system, and our tankless should last a lot longer than a tank.

One major factor to consider is how close to the point of use you can locate the tankless hot water heater. Long runs of pipe will sap efficiency from any hot water heating system, but it’ll seem a lot worse with a tankless since there isn’t always hot water in the pipes.

Our water demands are inconsistent because we both travel for work, so we save extra over what some other families might by not having a huge tank of hot water on standby all the time.

I’m able to flush my system once a year myself, but others might have to pay a plumber to do this, so factor that in.

And comfort is a major factor here. We have one kid and are planning on a second, and no matter how many showers we take (or how many house guests we have staying with us), we will all always have hot water. That’s worth a lot to us.

Our system has a recirculating pump to keep hot water available at the taps, but it’s a pretty dumb system out of the box. The only options were: cycle the pump all the time to maintain hot water in the loop, or use a built in timer to cycle the pump at specific times of day. Neither would have been particularly efficient for us.

Interestingly, improving on this recurculating pump schedule was the reason I purchased Smartthings in the first place. I use a combination of motion sensors, contact sensors, and buttons (depending on the location) to trigger the recirculating pump until ST detects hot water at the point of use.

It’s also possible to monitor the power draw of the tankless unit and just trigger the recirc pump for a set amount of time when it detects that the tankless unit is heating water. This effectively boosts the hot water to your point of use without any “false positives” detected by motion.

I live in a cold climate and our inlet water temperatures are often below 46°F in the winter. Our tankless system is sized properly for our demands at this low water temperature and it has no difficulty keeping up. Since tankless systems use variable gas burners, unlike tank-type systems (which also suffer from reduced performance with low inlet temperatures) there’s not a significant hit to the efficiency of the system during the summer if you have to oversize it for the winter.


I would add to the comments above my thoughts.
In our country, hot water is a bit pricey nowadays, and someday we (my sister and I) decided to install a gas tankless water heater. From our calculations, it was a good idea (we’ve read a lot of articles like these, I was surprised by how many models and brands exist on the market. It was a bit hard to find a good price along with a quality of the installation and of the heater. But we are glad to pay less for hot water now, it was worth it (expenses ~£1800).
A company that installed it for us - Pimlico, gas tankless water heater - Noritz NRC66DVNG.
That’s my short but happy story.

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Biggest problem I have with gas tankless or the high efficiency direct vent water heaters, is that is your power goes out, you also loose hot water.

That is the primary reason I have kept with an old school flue vent gas water heater. Even if my power goes out, I still have hot water. That being said, I’d like to have a genset that can at least run my furnace blower, refrigerator, network equipment, and a few other items. If I were to switch to a water heater that required power, a generator would be a must.

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Absolutely. And if your tankless is near your master bathroom, you can have nearly instant hot water for your sinks, tub and shower. Sweet!

Not doable for a retrofit but when we built our house we had it plumbed with a recirculating loop. The house is one story and kind of long and narrow so the tankless heater is almost 100ft from the master bath. The loop gives us hot water in 15 seconds from any faucet.