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What Is a Whole-Home Tankless Water Heater?

The advantage of more extensive and centralized on-demand water heaters is that they generally require less plumbing and electrical or gas connections. This feature results in lower installation costs. A centralized on-demand water heater is still significantly smaller than a tank-style heater. It can be discretely located in several locations around the home. One of the cons of tankless electric heaters is that the device might not provide enough hot water for multiple, simultaneous uses if they are undersized. For example, if you are showering and running the dishwasher simultaneously, the heat load may be too much for the water heater. The result will be lukewarm (instead of hot) water delivery to both appliances.

What Is a Point of Use Tankless Water Heater?

Point of use tankless water heaters is generally much smaller than centralized versions. They are made to be small, to fit in tiny places, like cupboards underneath your sink or in the bathroom closet near your showerhead. The Energy Star Program states: "Adding a POU at the fixture may be the best option in terms of system-wide energy efficiency, especially compared to the alternative of increasing the temperature setting of a storage water heater."

Point of use, tankless water heaters are generally a good option for households with relatively low hot water requirements (20-25 gallons per day). The main disadvantage is that you'll have to install several tankless heaters wherever you want hot water available. A 3,500 square foot home with five bathrooms, then, would probably not be an ideal candidate for POU heaters.

However, POU on-demand water heating can allow homeowners greater control over where hot water is directed. For example, though hot showers are indeed a luxury that most of us have come to depend on, do we need a hot water plumbing fixture attached to our washing machine? Between 80 and 90 percent of the energy used by a washing machine is used for heating water. By simply omitting a hot water connection (and only using the cold setting on our washers), we can radically reduce power consumption during laundry day.

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Example Tankless Water Heater Size Assessment

Let's say you need a tankless water heater to power two showers and two sinks. 

  • You have low-flow showerheads that use 1.8 GPM and faucet aerators with flow rates of 1.2 GPM, so you need a maximum flow rate of 6 GPM. 
  • Your incoming water temperature is 40 degrees Fahrenheit, and you want an average shower temperature of 105 degrees. So it would be best if you chose an option with an advertised temperature rise of at least 65 degrees.
Installing A Gas Tankless Water Heater HomeDepot
Installing A Gas Tankless Water Heater. Photo Credit: Home Depot

How to Install a Tankless Water Heater 

Unless you have serious DIY construction abilities, you will most likely want to hire a professional for installation. On-demand gas heaters will require the installation of vents. Electric heaters will require electrical connections that you'll not want to fool around with unless you have some electrical knowledge. In addition, there can be several building elements, such as mandatory gas shut-off valves, that professional installers will know about and how to install correctly. If you have the skills and choose to self-install your tankless water heater, the following YouTube instructional video is an excellent place to start.

What Are the Downsides of a Tankless Water Heater? 

With so many economic and energy efficiency benefits, why isn't everyone installing tankless water heaters? The main downside is that for larger homes with several bathrooms, even the largest on-demand heater might not be able to simultaneously deliver hot water to all your plumbing connections at once. For example, if a family of six all takes showers in their private bathrooms simultaneously, this could lead to only lukewarm shower temperatures.

BOSCH Electric Mini Tank Water Heater Tronic 3000
BOSCH Electric Mini Tank Water Heater Tronic 3000. Photo Credit: Amazon

How Much is a Tankless Water Heater?

Another prohibitive aspect of tankless water heaters is the upfront cost. Though there are lower-priced models for sale, some expert websites estimate that homeowners should expect to pay between $1,000 and $3,000 for a centralized, on-demand water heater, with gas heaters being more expensive. Though this is significantly more than a storage-style heater, it is worth mentioning that on-demand water heaters have an expected lifespan of 20 years, about double that of a tank-style heater. Smaller POU water heaters, however, are significantly less expensive. This 2.5 gallon Bosch electric on-demand heater costs under $150 on Amazon. 

Whether you choose a point of use option or a centralized on-demand water heater, the energy savings, when compared to a traditional water heater, will eventually offset the higher upfront investment. Alternatively, depending on the unit's cost, since it can take many years to recoup your investment. So, you may want to consider installing a simple water heater timer to your existing tank or investing in a heat pump water heater, which is likely to save more money annually than a tankless unit.

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Article By

Tobias Roberts

Tobias runs an agroecology farm and a natural building collective in the mountains of El Salvador. He specializes in earthen construction methods and uses permaculture design methods to integrate structures into the sustainability of the landscape.

Tobias Roberts