Are Tankless Water Heaters Really Money Savers?

Are Tankless Water Heaters Really Money Savers?

With inflation on the rise, homeowners and renters alike are constantly trying to find ways of saving money. One way to save is by purchasing more energy-efficient appliances for the home, as appliances account for 45% of energy usage in your home.

One such energy-efficient appliance is the tankless water heater. With water heating taking up nearly 30% of your total energy bill, it may sound as if the more energy-efficient tankless water heater will save you loads of money. However, the actual cost savings of energy-efficient appliances is not always straightforward. 

Are Tankless Water Heaters Really Money Savers?

In this article, we set out to discover whether or not there are truly any cost-saving benefits to using a tankless water heater, as well as the advantages and disadvantages of that system. 

What Is A Tankless Water Heater?

Water heaters are vital to the everyday operation of your home. At the most basic, water heaters heat up your water so that it can be used for washing clothes and dishes. Traditionally, water heaters consist of a large storage tank with a drain valve, dip tube, and various pipes for hot water to circulate through. 

Water will go to the bottom of the tank by way of a dip tube, which is where the heating element or gas burner is located, heating up the water as it disperses into the rest of the tank where it is stored. 

In contrast, tankless water heaters deliver hot water on demand without using a storage tank. When a hot water faucet is turned on, cold water flows through a heat exchanger heated by either electricity or natural gas. Because of this, tankless water heaters can deliver a constant supply of hot water, whereas a traditional water heater will need to refill and reheat. 

To be fair, a tankless water heater's upfront cost can exceed three times as much as a traditional water heater.

There are a variety of advantages and disadvantages to consider when choosing a tankless water heater.

Advantages and Disadvantages Of Tankless Water Heaters

Advantages Of Tankless Water Heaters:

  • It occupies less space as it is compact in size compared to traditional water heaters.
  • Energy is efficient as it only heats water on demand.
  • May have a longer lifespan than traditional water heaters.
  • Provides a continuous supply of hot water.
  • Suitable for small households or individual use.

Disadvantages Of Tankless Water Heaters:

  • Has a higher upfront cost.
  • It may not be able to meet the hot water demands of larger households.
  • Require larger gas lines and electrical service than traditional water heaters.
  • Not suitable for areas with hard water or low water pressure.
  • It needs regular maintenance and cleaning to function efficiently.

What Are The Cost Savings Of A Tankless Water Heater?

According to the US Department of Energy, gas-fired tankless water heaters save around $108 annually, while electric tankless heaters save $44, though some studies show up to $165 in annual savings. Upfront costs of tankless systems are generally way higher. So, where are the cost savings that are typically marketed? 

For tankless water heaters to truly pay for themselves with energy savings, you're looking at around 22-27 years for gas or 12- 20 for electricity. However, tankless water heaters tend to outlast traditional tank water heaters. In some cases, they may last as long as 25-30 years. 

In addition to the federal program “residential energy property credit,” there are some state and local tax credits and rebates that put money back into homeowners' pockets. The federal tax credit is an easy $300 back when you do your taxes. Some rebates can be up to $1,000 depending on the efficiency of your tankless water heater, so be sure to check with your utility company to learn more. 

So, What Kind Of Tankless System Should I Buy?

If you have access to natural gas and are looking for the most efficient water heating system on the market, gas-powered tankless water heaters are the way to go. Not only are they compact and easy to use, but they will give you the best hot water supply while also decreasing your energy bill. Also, many of the tax credits and rebates favor natural gas systems as they are better for the environment.

HOWEVER: The most efficient water heater on the market for residential use is a TANK-TYPE HYBRID ELECTRIC UNIT that is many times more efficient than traditional tank or tankless units.

Barlow Plumbing - Your Trusted Buncombe County Plumbers

Barlow Plumbing Service, Inc. has served western North Carolina residents and businesses for more than 25 years. We are a leader in plumbing repair and plumbing installation across Asheville, Black Mountain, and Weaverville. 

Barlow Plumbing can install, hook up, and repair connections to existing and new appliances. In addition to installing tankless water heaters, we can help you with just about any plumbing situation, including:

  • Home Remodel & New Construction
  • Sewer Line Installation and Cleaning
  • Water Line Installation
  • Toilet Repair and Replacement 
  • Tub, Shower & Faucet Valves
  • Frozen Water Lines
  • Hose Bibs
  • Re-Piping
  • Drain Cleaning
  • Troubleshooting & Leaks
  • Bathroom and Kitchen Remodel

Contact us today for more information about how you can benefit from installing a tankless water heater.