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Tankless Water Heaters vs Hot Water Tanks

The scientific community is pretty much in agreement, global warming is occurring. We all want to do our part – recycling our waste, smaller vehicles with greater fuel economy, saying ‘no’ to plastic grocery bags at the local market, etc. More and more Canadians are become energy conscious when it comes to energy usage in the home, and a significant portion of energy goes into heating our domestic water.

Tankless, instantaneous, on-demand hot water heat has never been more popular. And why shouldn’t it be? Energy efficiency is reported to be in the 80-85% range (95-97% for the condensing units), tankless heaters only heat the water when you turn a tap on, they’re almost silent running, and CO2 emissions are reduced by 900-1000 pounds per year per average household installation! Time to replace your water heater? You’re of course going to want to replace it with a tankless system right? Well – maybe.

Before jumping in with both feet, know what you’re getting into. Tankless may work great for your household dynamic, but it’s not for everybody.

It’s a Tankless Job

Probably the main thing to realize is that a tankless system is just that – tankless. No water storage tank at all. With a tankless system, when you turn on a hot water tap, here’s what happens: Opening the faucet allows water to flow inside pipe and out the faucet. A flow sensor within the tankless system detects this flow usually within a couple of seconds. Once flow is detected, the system’s computer (yup, there’s a computer) tells the tankless unit to come to life, firing up the burners and starting up the exhaust fan (these are various levels of “silent”, but none as silent as not having a fan at all). The cold water goes through these burners in a series of small water channels (a heat exchanger) quickly heating the water to a predetermined temperature (also continually monitored by the computer). Once appropriately heated, the hot water is sent on its way to the open faucet. When the faucet is closed, the flow sensor notifies the computer that flow has stopped, which in turn shuts down the burner and goes back to sleep awaiting the day flow begins anew.

This flow that we’re speaking of is also important when considering a tankless unit’s practical use. Various tankless models are designed with various levels of maximum flow. This flow is measured in GPM (gallons per minute) for a set tempurature rise. Many tankless units considered to be multi-bathroom use capable, can produce 9 GPM of heated water with a 35 degree fahrenheit temperature rise. This means that if the cold water entering the house is 40 degrees fahrenheit, the unit is capable of “instantly” heating it to 75 degrees at 9 GPM of flow. This same unit would also be rated at approximately 7 GPM with a 45 degree fahrenheit temperature rise, so it can keep up with a solid 85 degrees (about the temperature of a swimming pool) at 7 gallons per minute of flow.

Typical flow for: GPM
(gallons per minute)
Bathtub 4
Wash machine 3
Dishwasher 3
Shower head 2.5
Kitchen faucet 2.2
Bathroom faucet 1.5

I’m probably losing you here, but it's important to understand this before going tankless! If you’re like me, you probably like to have a nice hot shower (about 105 degrees) so the tankless unit will need to raise the water temperature 65 degrees. To accomplish this temperature rise, we can guesstimate the flow rate would be around 3½ to 4 GPM. Thankfully, my shower head only allows 2½ GPM of flow, so I’m in the clear by 1 ½ to 2 GPM. Fingers crossed that no-one turns on a dishwasher or wash machine!

Since you likely currently have a typical old-fashioned hot water tank, let’s look how that works. When you turn on a hot water tap, water flows from your hot water tank (that is already filled with hot water) to the faucet. Hmmm. Which system is truly “instantaneous”? No computer, no fan, no waiting for burners to come on to heat,  and no flow reduction based on temperature demand. Its full flow all the way at 140 degrees. A standard hot water tank can easily handle simultaneous usage. My wife and I have a standard 40 gallon natural gas John Wood hot water tank, and two teenage daughters. There is never any thought to turn off the wash machine or dishwasher when someone is in the shower, and we have never run out of hot water. Flow limitations for a standard hot water tank system is dependent upon the waterline sizing, not the water heating capability.

Energy Requirements

Tankless heaters have no time to gradually heat the water, it needs to heat the water fast, efficiently and now! This is why a typical gas tankless heater runs at a whopping 199,000 BTU. Thankfully, it only fires on demand, but when the demand is there it FIRES! If you have an hour long shower, its firing for an hour long. A typical hot water tank relies on its storage (usually 40 to 50 gallons) and an extended recovery time (30 to 40 minute range). In my previous house I installed a quick recovery 50 gallon hot water tank, that recovered quickly enough that even when we had lots of guests staying over, it easily kept our water hot. It was a 50,000 BTU tank.

BTU (British Thermal Unit)

One British Thermal Unit is the amount of energy it takes to heat 1 pound of water 1 degree Fahrenheit. With appliances, the BTU value refers to BTUs per hour.

Lighting an ordinary match and letting it burn its length radiates about 1 BTU of energy.

Imagine lighting 199,000 matches and you can see the energy released by a tankless water heater in an hour!

Energy Efficiency

Most tankless units are energy efficient within the unit themselves. I mentioned before that typical tankless units run at 80-85% efficiency and the higher end condensing units upwards to 97% energy efficiency rating. What may surprise you is some natural gas hot water tanks have energy efficiency ratings as high as 95%. Some commercial hot water tanks are rated as high as 99.1% efficient! Modern hot water heaters are much more efficient than they used to be. If you put your hand on the side of a modern hot water tank that’s full of 140 degree hot water, the tank shell isn’t even warm, it will feel cool to the touch.

Insulate your hot water lines!

The greatest culprit in heating loss comes not from the heating system used to heat the water, but rather from hot water lines in the house that aren’t insulated. If you have a tankless water heater sending hot water down 50 feet of un-insulated water line, it loses energy the whole way along the line until the pipe is heated up to the same temperature as the water inside it. This is why the water seems to gradually get warmer until finally its hot. The same is true for typical storage hot water tanks. The tank can be as efficient as can be, but if the water lines aren’t insulated, it must waste energy heating those lines up before you finally get the full benefit of the hot water. If you have un-insulated hot water lines in your house that are also part of a recirculation system, the recirc line will actually heat your house, albeit very inefficiently.

Cold Water Sandwich

People investigating tankless systems or who’ve spoken with someone who owns this sort of system will invariably come across the term “cold water sandwich”. What does this mean? With a tankless system, let say your spouse just had a shower so the water lines between the shower and the tankless heater are all hot. Now its your turn for a shower, so you jump in and turn the water on. Immediately, there is hot water coming because the lines are all full of hot water, and you’re in there happily singing at the top of your lungs. But remember, tankless systems aren’t truly “instantaneous” – and I love this part - so while the flow sensor is waiting for a ½ gallon of cold water to go through before it decides to come to life and start heating, you’ve got a ½ gallon of cold water barreling down the line toward you while your singing in the shower. “IEee!” Cold water sandwich! Kind of like putting a bucket of cold water above a partly open door.

So what to do about this? We always, always put in a water storage tank to work in conjunction with a tankless heater. Anywhere from a 2 to 30 gallon electric works just fine for this. It acts as a buffer to ensure that any cold water is completely absorbed by the hot water tank – not by your backside. Also, the electric tank will be always be ready and waiting for you, full of hot water, so you truly get the instantaneous heat you’ve grown accustomed to. Instead of the electric tank having to heat up cold 40 degree water, it is fed only hot water from the tankless heater, making it more efficient. There are also hybrid hot water heaters that combine both tankless with a storage tank in one unit.

To be fair, many tankless water heaters now try to reduce the cold water sandwich effect using various methods. On of these methods is to measure the length of time between the last hot water usage and the current hot water request. If the time is short enough (a minute or two), the tankless unit will fire up within one or two seconds reducing the amount of cold water coming at you. Whatever method is used, the cold water sandwich is still with us, and something you need to be aware of.

Final thoughts

The biggest plus that I can give to a tankless system is that is takes up less space. It hangs up very nicely on the wall. When installed correctly, it’s a clean looking unit. However, by the time you’ve also installed the “buffer” tank, the space savings start to dwindle. When installed correctly, a tankless system can be as efficient as a high efficiency storage tank, but the installation price is certainly higher, and you end up having a water storage tank anyhow. Tankless is very trendy right now, and yes we do install them, but you might want to talk to us about high efficiency water storage tanks that will save your pocketbook as well as the environment. If your convinced a tankless system is right for your situation, get a price quote for installing a tankless hot water heater in your home.