Tankless Water Heaters vs. Regular Storage Tank Water Heaters

Rheem Tankless Water Heaters15% of your home energy costs is heating your water. With energy costs increasing more and more, people are considering tank-less water heaters.

I have to be honest that until recently, I really didn’t see the benefit until I read this report put out by the Office of Energy Security. It is a lengthy report so I’ve just hit the highlights here. I hope this helps you in your decision process.

Below is a graph that illustrates the DOE rating (energy efficiency based on units at 64 gallons per day) of a tank-less and regular water heaters, cost per year and savings per year if you used a tank-less unit.

Savings in Energy Dollars

Some concerns from homeowners during this study that you may want to consider before purchasing a tankless water heater are:

  • Higher Installation Costs
  • Higher Maintenance Costs
  • You may have to upgrade the gas-line from your appliance to the meter.
  • Savings in natural gas may increase electrical use if you purchase a unit that has frost protection. (This can be avoided by installing the unit in a conditioned space).
  • Low flow response for hot water can be a drawback on many models so make sure you check the gallon per minute requirement before you purchase. The lower the number the better.
  • The first 30 seconds delivers cold – hot – cold water dubbed the ‘sandwich’ effect.

Some positive feedback regarding tank-less water heaters are

  • After the 30 second wait for hot water the tank-less delivers the most consistent even temperature throughout a shower. (Even with the 30 second wait for hot water the study showed that tank-less users did not use more water than the regular water heater users)
  • Homeowners like that the tank-less units require so little space.
  • Homeowners feel better that they are leaving behind a smaller carbon footprint.

This graph shows the savings in energy dollars based on GPD (gallons per day use) over a regular water heater in calculated simple payback with an install cost of $2500.

Savings and Payback

If after this report you’re not convinced, (I realize the payback seems high but you have to consider the green effect) purchasing a new Energy Star rated regular water heater and wrapping it with an R11 thermal blanket can save you 7% and will only take 4 years to realize your payback!

Turn down the temperature setting on your water heater by 5 to 25 degrees’ you have an additional yearly savings of $7 to $36 a year. (The numbers at the bottom represent you lowering the temperature by 5, 10, 15 etc):

Temp Set

Rheem tank-less water heaters is rated one of the best for lowest flow rate for firing which is ideal. For more information on these units visit our website.


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