2021-2022 Guide to Tankless Water Heater Costs

Did you ever take a nice, hot shower and suddenly get that shocking, unexpected jolt of cold water that seems to come out of nowhere? While you jump out of the way of the water flow and try not to scream, so you don’t wake up your wife, you wonder, “Why does this keep happening, and how can I stop it?”

Well, you can avoid all of this unpleasantness. The truth is, if you are experiencing fluctuations in water temperature, it may be a sign that your water heater is not operating the way it should be. In fact, it may be time to purchase a new water heater.

But that’s not an easy decision. There are many different types of water heaters, and you probably aren’t sure which of them is the most efficient, energy-saving, and cost-effective. Read on to find out more about water heaters and how a tankless water heater may be the right choice for you.

What’s the Difference Between Traditional and Tankless Water Heaters?

You must be familiar with that big water tank that is taking up space somewhere in your home. That’s your water heater. Cold water enters the tank from the bottom, and the tank heats it so it’s ready when you need it. The water remains in the tank until it is called for, like when you are taking a shower or running the dishwasher. You might be wondering how the water in the tank remains hot so it’s ready whenever you need it.

If this sounds inefficient and a bit of an energy waste to you, you’re right. Well, when the water in the tank cools down to a specific temperature, it’s reheated until it reaches the desired temperature. In effect, your traditional water heater works around the clock to make sure your water is heated and ready whenever you need it. The water heater turns on whenever the water temperature gets too low, meaning you are paying for that energy the tank uses to heat the water even if you are not using any hot water at the time.

Even though traditional tank storage units have multiple gallons of water ready for you at any time, it’s possible to run out of hot water, even if it’s temporarily. It all depends on the size of your tank. If your tank is on the small side, you might find yourself having to wait for the tank to heat more water before you can take your shower.

Tankless water heaters are so named because they don’t have a tank that holds water like traditional water heaters. Whenever you turn on your hot water faucet, water is heated through a heating coil as it flows through the heater. A tank isn’t needed because it does not need to store water and keep it hot until you are ready for it.

Instead, tankless water heaters heat the water “on demand.” In other words, when you turn on the hot water in your shower, that’s when it heats the water.

Unlike tank water heaters, tankless water heaters are more efficient because they aren’t turning on and off to keep the water in the tank hot. Tankless heaters only turn on when you want the water to be hot, so they use less energy. Not to mention that they take up far less space without the tank. As a matter of fact, some units can be hung on your wall.

Another difference from tank water heaters is that tankless water heaters don’t run out of hot water. Since it heats the water as you need it, you will get hot water as long as there is water coming into your house from the water main. You no longer have to worry about the size of your tank and whether it is too small to accommodate everyone in the house.

What Are the Pros and Cons of Tankless Water Heaters?

Now that you are seriously considering a tankless water heater, let’s look at some of the pros and cons of having one to heat the water in your home.

 The Pros:

  • Energy Efficiency: According to the U.S. Department of Energy, a tankless water heater using 41 gallons a day is 24% to 34% more energy-efficient than a storage-tank water heater. Even if you raise water use to 86 gallons a day, it’s still 8%-14% more energy efficient.
  • Money Savings: Since you’re using less energy to heat your water, you’re paying less money for your energy bills. In the long term, these savings balance out the higher purchase price of these heaters. 
  • Constant Hot Water Supply: Tankless water heaters heat water on demand. The supply isn’t limited to the size of a tank. So, you could, conceivably, take an unending shower and never run out of hot water. 
  • Space Savings: There is no big tank taking up space in your basement, so it creates extra storage space. Actually, they can be mounted on your wall in many cases, so they are a great option if your space is limited.
  • No Water Damage: If you’ve ever had a leak from your hot water tank, you know the nightmare it can cause. Think of multiple gallons of water leaking onto your floor unbeknownst to you while you sleep. Imagine waking up to that. A tankless water heater has no tank and eliminates this worry.
  • Long Life: Tankless water heaters have a life expectancy of more than 20 years in contrast to the 10-13 year lifespan of storage tank water heaters.

The Cons:

  • Limited Hot Water Production: Tankless water heaters are limited in the amount of water they can heat, particularly if you are trying to get hot water to several locations in the house at the same time. So, suppose you are taking a shower, running the dishwasher, and washing clothes. In that case, you may experience temperature inconsistencies since the unit is trying to provide hot water for three locations at once.
  • Upfront cost: Tankless water heaters are more expensive than storage tank heaters. If you have multiple people in your house and the demand for hot water is high, you will need a bigger unit, leading to an even higher expense.
  • Power Outages: Tankless water heaters require electricity to run, so you will not have hot water if your power goes out. If your area experiences frequent power outages, careful consideration is needed.

Do Tankless Water Heaters Save Money and Energy?

Tankless water heaters definitely save money and energy. While the upfront cost of tankless water heaters is more than a traditional storage tank heater, the money you save on energy bills balances out the price in the long run. The U.S. Department of Energy estimates that tankless water heaters are 24%-34% more efficient when using 41 gallons a day and 8%-14% more energy efficient when using 86 gallons a day.

In addition, tankless water heaters have almost double the life span of traditional heaters. So, instead of potentially purchasing two traditional storage tank heaters over 20 years, you only need to buy one tankless heater. This offsets the higher cost of the tankless heater.

What Factors Influence the Cost of a Tankless Water Heater?

A tankless water heater is a wise investment, but you may be surprised to see the cost of the unit and installation is higher than that of a traditional storage-tank water heater. The national average cost of a tankless water heater ranges from $ 450-$ 1.500, with complete installation averaging from $2500-$4500 depending on your location. Again, these initial costs will be gains in the long run because of the tankless unit’s energy efficiency.

The size of the unit you purchase influences the cost. It all depends on the amount of hot water you will need at any particular time. If you don’t often require hot water from different locations simultaneously, you can use a small tankless unit. However, if you want to take a shower, run the dishwasher, and do a load of laundry at the same time, you will need to consider a bigger unit that can handle the demand. In effect, the bigger the unit you buy, the more you are going to pay.

The type of tankless unit you buy is another cost factor. The most common types of tankless water heaters run on gas or electricity, and there may be extra costs to factor in depending on which type you choose. For example, if you choose an electric unit, you might need an electrician to come in to upgrade your electrical system so that the heater runs properly. If you select a gas unit, you might need to install a gas line or rearrange existing gas lines to fit your water heater. All of these can drive installation costs up and must be carefully considered.

Tankless Water Heater Installation: Is It Worth It?

Tankless water heater installation is worth it. While the upfront cost may be more than that of traditional storage tank water heaters, in the long run, you’ll save money on your energy bill because of the increased efficiency of the units. They give you hot water on demand, so you don’t have gallons of water sitting in a tank continuously heated with wasted energy. You also don’t have to worry about those gallons of water leaking all over your floor, causing expensive damage to your home.

Tankless water heaters have a lifespan of 20 years, practically double that of traditional water heaters. They also take up far less space than a huge water tank and can be conveniently hung on a wall, freeing up valuable space in your house. It’s an easy choice and one you should strongly consider.

Ready to find out more about tankless water heaters and whether they are a good fit for your home? Contact Nick’s Plumbing and Air Conditioning today for an appointment. Their trained and licensed technicians will advise you on the available options and help you make an intelligent decision.

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