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How to Save Money on Home Energy

Replacing the Water Heater

Consider the plumbing of your home. Did you know that 20 percent of a typical household energy bill goes toward heating water? You should keep that in mind in your quest to conserve energy and curb spending.

A Tankless Job

Visitors to Europe and other overseas locales are often confronted in their hotel rooms by wall-hanging tanks that their hosts inform them are instant water heaters. The tanks contain a burner or electrical heating element that heats water flowing through the unit. Open a hot-water tap, and the burner or heating element comes on; shut the tap, and the burner or element shuts off, and water heating ceases.


Tankless water heaters are energy-efficient in large part because they have virtually none of the "standby" heat loss that is inherent in the standard tank- or "storage-"type water heaters in this country. During the hours between uses, heat from a 40- or 50-gallon conventional water heater tank is eventually transferred to the surrounding air, and the burner or heating element activates in order to keep the volume of water in the tank hot. The standby heat loss also contributes to the cooling load of an air-conditioning system during the summer.

Another advantage to using a tankless water heater, though it has nothing to do with energy savings or efficiency, is that you never run out of hot water. You can take one shower or bath after another, and you never have to wait for water in a tank to heat up sufficiently to make it tolerable.

Newer models of tankless heaters contain variable-capacity burners that automatically adjust their firing to the volume and temperature of the water passing through the heat exchanger, resulting in more efficient heating and more precise output temperature. Ignition is supplied by a sparking device, eliminating energy loss due to a standing pilot light. Tankless water heater burners are also more efficient than storage water heater burners.

Manufacturers continue to refine the mechanics on tankless water heaters. They are now available for purchase at plumbing supply houses, lumberyards, and home centers in the United States. Below are some aspects to consider before buying a tankless water heater.

What size?: Installing a tankless water heater in a home is more complicated than one might think. You can't simply replace a standard tank-type water heater with a tankless model. A key issue is sizing the new unit correctly. Tankless water heaters are rated by their ability to raise the temperature of the water coming into the unit at a certain flow rate. One complaint some have about these devices is that if they aren't sized properly, they aren't capable of delivering enough water to serve several uses at the same time. Both of these problems are usually due to the unit being undersized for the anticipated usage. Another complaint is that when multiple people in a house attempt to use the hot water simultaneously, nobody gets enough of it.

Lower water volume: Say you live in Michigan, it's winter, and the water coming into your home is a frigid 38 degrees. It takes a lot of energy to heat that water to a usable 120 degrees or so.

To ensure the water is being heated to the correct temperature, a tankless water heater might have to slow the flow rate through the heat exchanger. This can result in a lower-than-expected volume of water at the hot-water tap or shower.

Or, given the same geographical and climatic situation, if two people in the house want to use hot water at the same time, those two users might have to share the hot water coming out of the water heater -- and neither is likely to be satisfied with how much they are getting.

The key to avoiding these problems is to purchase a tankless water heater with enough capacity to deal with any circumstance -- or to accept and work around some of the limitations of a smaller model.

Other tankless implications: A quirk about tankless water heaters is that they require a certain flow rate through the unit in order to activate the switch that turns on the burner. Unless you're using a half gallon of water per minute, the burner won't fire, and you won't get any hot water. Tankless heaters also require 5-15 seconds to heat water to its desired temperature. In large homes where there are already long waits for hot water, the additional time it takes to reach the user may seem interminable, and it also wastes water.

On the plus side, many tankless water heaters are only about the size of a large suitcase, and they are designed to hang on a wall. This can free up valuable floor space.

Installation issues: If you decide to look further into installing a tankless water heater, be aware that you will likely have to deal with some gas piping, fluepipe, and electrical issues. The gas units (which have the highest capacity, and thus are the most popular type) require a flue to vent combustion by-products created by the burner's firing. Because burners on tankless water heaters require a high volume of gas, they require a larger-than-normal flue to safely vent the combustion gases. So you usually can't simply replace a standard tank-type water heater with a tankless one and expect to hook up the flue to the chimney where the old water-heater flue used to go.

New models of tankless water heaters, like sealed combustion furnaces, can vent out a sidewall through a plastic PVC pipe, thus eliminating the need to upsize an existing fluepipe. However, if an old tank-type water heater shares its flue with the furnace, removing that old flue pipe in order to install a sidewall-vented tankless water heater could mean that the furnace flue will have to be downsized to safely handle the furnace-only flue gases. It gets complicated, and that's why installing a tankless water heater, while beneficial from an energy-efficiency standpoint in most cases, needs to be thought through carefully, and it is probably not an ideal do-it-yourself project.

Because of a tankless water heater's outsized burner capacity, gas piping might have to be replaced with a larger size in order to deliver the amount of gas necessary for the water heater to operate correctly. And most tankless water heaters require electricity to operate, meaning a new receptacle might have to be added if one is not already within six feet of the planned installation. Dependence on electricity, of course, means the water heater won't heat water during power outages, though some of the newest models on the market are designed to operate without outside power. The heat exchanger inside a tankless water heater requires periodic descaling in hard-water areas, using a mild acid liquid, but the service life of the unit should be 20 years or more.

Finally, the initial cost of a tankless water heater is usually several times that of a storage-type water heater. Additional money is often required for installation expenses. But if you use a lot of hot water and can live with some of a tankless water heater's quirks, then investing in one can result in energy savings over its lifetime.

You can also consider energy efficiency when buying other appliances for your home. In the next section, we'll give you some tips for buying economical refrigerators, dishwashers, and more.