Tankless Water Heaters
Gain Space and Lower Energy Bills
by Scott Morgan
Home owners and homebuilders alike are getting excited about the benefits of tankless water heaters?they're easy to install and bring a new level of efficiency to the home. What's the difference between tankless and conventional water heaters? Tankless water heaters heat on demand, provide endless hot water and eliminate standby loss?the loss of the energy needed to maintain the temperature in storage tank water heaters.
All of these efficiencies appeal to homebuyers' increasing desire for "green technology" in their homes, but tankless water heaters are also incredible space savers, taking up less square footage than traditional water heaters. As if saving money and space wasn't enough, there's more. These water heaters have a life expectancy of more than 20 years, while storage tank water heaters typically last only 10 years.
The benefits of selecting tankless water heaters are many. How does the home buyer make the decision and choose an energy source for its operation? And how can a builder answer a homebuyer's questions about picking the right energy source?
In a recent survey of 755 homeowners conducted by the Propane Education & Research Council (PERC), 37 percent say they are familiar with tankless water heaters. After being given a description of a tankless or on-demand water heater and its benefits, nearly twice as many (62 percent) say they are likely to consider purchasing one for their next water heater.
According to the survey, the key selling points for gas tankless water heaters are that they can lower household energy bills and that they use less energy to operate than conventional tank heaters. Nearly nine out of 10 homeowners say these are important reasons to consider purchasing a tankless water heater.
Although tankless water heaters represent a fraction of the market, they are gaining ground. A big reason for tankless market share gains is improvement in the technology, and their attractiveness is supported by the inherent ability of gas to heat water better and faster than electricity. Although electricity is an option, when gas is used to fuel efficient tankless water heaters, homeowners can realize exceptional efficiency gains.
Approximately nine million conventional water heater units are sold annually. Of these, about half are fueled by gas (propane or natural) and the other half are powered by electricity. The Department of Energy estimates that approximately 20 percent of a home's energy costs are spent heating water. A standard 50-gallon electric tank water heater replaced with a propane tankless water heater can reduce annual energy costs by more than 60 percent, or $274 annually (based on Energy Guide values for a family of four using an estimated 2,000 gallons of hot water per month).
With today's tankless water heaters delivering performance rates that meet and exceed conventional tank water heaters, the primary barrier for home owners is price. Tankless water heaters can cost two to three times more than electric tank water heaters.
For example, a tankless water heater installationmay cost $3,000 compared with $1,000 for a conventional electric water heater. A homeowner needs to understand equipment replacement timeframes. Tankless water heaters last twice as long as conventional water heaters?an average of 20 years. Hence, factoring in the necessary replacement cost for a conventional water heater means that a tankless water heater may only cost $1,000 more?and that's before factoring in the significant energy savings. The challenge for installers and builders is to help homeowners understand the lifecycle benefit of a tankless water heater and how it offsets startup costs.
remaining $1,000 difference can be offset in as little as four years when you consider the energy savings. A 50-gallon, conventional electric water heater has an energy cost of $450 per year (based on 2,000 gallons of hot water per month) compared with $176 per year for a propane tankless water heater. This represents an average annual savings of $274 per year. In addition, gas tankless water heaters may qualify for federal energy tax credits that can offset installation costs. In the PERC homeowner survey, 82 percent of homeowners said the long-term benefits and cost savings were either definitely (36 percent) or probably (46 percent) worth the upfront costs of installing a tankless water heater.
If gas is the choice for maximum energy savings, propane can be easily retrofitted into homes without access to natural gas. Adding a propane tank and gas piping to the home is typically a cost-effective and efficient alternative to electricity for both home and water heating as well as fireplaces, cooking, and many outdoor uses.
Gas systems can use either the typical black steel threaded piping common to many homes or the newer corrugated flexible piping systems that make pipe installations much faster and reduce installation costs. Propane operates at a higher pressure than natural gas and can use smaller diameter gas piping to provide proper pressure and volume, and smaller diameter piping reduces costs by lowering labor costs (smaller piping is easier to run) and lowering material costs (smaller diameter piping costs less).
Finally, homeowners and builders must consider the space savings benefit tankless water heaters provide. Tankless water heaters free up usable floor space in a home. A standard 50-gallon tank water heater takes up nine-square-feet of valuable floor space. A home with a value of $200 per square foot would gain $1,800 in usable space by installing a tankless water heater.
Tankless water heaters are much less expensive to own over their lifetime, whichmakes thema premiumchoice. This offers an excellent opportunity for homebuilders to differentiate their homes from competitors'.
Scott Morgan is a Washington, DC resident and host of HGTV's "Dream Builders," which is produced in association with the National Association of Home Builders (NAHB) and profiles innovative builders of residential homes. After seven years, 150 shows and traveling coast to coast with the network's popular series, he has acquired an in-depth knowledge on the trends, styles and techniques of home design in such areas as construction, planned communities and affordable housing.
