Tankless Hot Water Heater vs. Conventional

Conventional Hot Water Heater

An on-demand, tankless hot water heater uses a powerful heater to raise the water temperature rapidly as it flows through the device.  Hot water is not stored in a tank as is done with a conventional hot water heater.  The advantage is that energy is not consumed to keep a tank of water heated to 120 degrees F. continuously.   The biggest disadvantage is that capacity may be limited when hot water is drawn for different purposes at the same time.

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In a conventional hot water system, 40 or more gallons of water remain heated all the time.  As hot water is used, it is replenished with cold water which is heated with a gas flame or an electric waterheater element.

Capacity of conventional tank water heaters is limited to about eighty percent of the rated volume because the incoming cold water mixes with the remaining hot water lowering the exit temperature.  Lower temperature cold water requires a longer period to heat due to the additional Btu's required.

Tankless Hot Water Heater Tankless hot water heaters, on the other hand, are not limited by volume because the water is heated as is is used.  However, tankless flow rates are significantly affected by the incoming cold water temperature.  For example, a 12 kilowatt tankless water heater producing 105° F. water can deliver hot water at 2.7 gallons per minute (gpm) when the incoming cold water is 75° F.  This flow rate drops in half to 1.3 gpm when the incoming water temperature is lowered to 40°F.

Sizing a tankless hot water heater properly is very important.  In the example above, the 12 KW unit must have an incoming cold water supply temperature of 70° F or more to meet the standard 2.2 gpm shower head flow rate.  For this reason, homes located in colder climates need significantly more tankless hot water heating capacity to meet demand during the winter months.

Meeting this capacity can place a significant electrical load on the main service panel.   Conventional 40 to 60 gallon electric hot water heaters are protected with a 30 amp, double pole (240 V.) circuit breaker.  A small 12 KW tankless water heater uses a 60 amp, double pole circuit breaker.   A large 36 kilowatt tankless hot water heater may require up to three 60 amp, double pole breakers.  

If capacity requirements dictate the use of multiple units, even if only seasonal, proper circuit protection must be provided for each.  The additional load may require upgrading to 400 amp service which would require a second main panel, possible sub-panels and associated wiring.   The additional cost of this service upgrade can be significant, especially as a retrofit to an existing home.

Due to this high electrical load requirement most whole house tankless water heaters use natural gas rather than electricity.  Installation is normally in done in a garage or basement where flues and ventilation can be provided without facing the safety hazards associated with confined spaces.

Gas units, by themselves, are typically more expensive than their electrical counterparts due to the additional fuel valves, controls and ventilation requirements.  However, when compared with an electrical unit that needs a service panel upgrade, gas unit installations are generally much more cost effective.

Tankless water heaters do offer lower energy consumption than conventional tank heaters because hot water is not stored.  However, higher unit costs, capacity planning and electrical load considerations must be evaluated carefully before purchasing a tankless hot water heater.

Measuring Energy Savings

If you have already installed a tankless hot water heater and want to measure the enegy it uses there are two approaches you can use.  An electric unit can be measured by using load profiling or sub-metering techniques with a multi-point or circuit level energy monitor just as you would measure any other 240 volt appliance.

If you gathered similar readings from the conventional unit you replaced with the tankless hot water heater, compare them and calculate the energy savings.  If you do not have a baseline from the old unit, see if you can locate an old manual on line for the electrical data. If that doesn't work check the yellow Energy Star tag for annual kilowatt-hour use on a similar sized unit the next time you visit your local home center.  Try to find a unit with an efficiency rating similar to the one you had and base your energy savings calculations on it.

A second method is to construct a simple Btu meter.   This approach will work with either an tankless electric or gas waterheater.  The incoming cold water temperature and the outgoing hot water temperature are recorded along with the flow rate.   Btu's are calculated from the difference in temperature times the flow rate and can be converted to kilowatt-hours for a baseline comparison.  Click here for instructions and detailed calculations.

For additional ideas on how to reduce the energy costs of hot water heating systems please visit any of the following:

Hot Water Heating Systems   l    Instant Hot Water System   l    Heat Pump Water Heaters

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