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Tankless Water Heaters & The Rest of the Story

Paul Harvey, a well known radio personality, promotes tankless water heaters as if they are the best answer to produce hot water for your family. But the rest of the story that doesn't get told is crucial information to help prevent homeowners from making an expensive and frustrating mistake. This article has been published before, but due to the number of recent phone calls addressing this issue, we thought it was time to print the information again.

For electric tankless water heaters, the advantages for an electric tank style unit are:

  1. Requires less space for installation.
  2. Can produce hot water continuously.

The disadvantages of electric tankless water heater compared to an electric tank style are:

And very importantly:


  1. Tankless units require nearly five times more demand for electricity during operation — 20 kw or more compared to 4.5 kw.
  2. For some homes, an electric breaker or fuse panel upgrade may be required as their existing panels may not be large enough. These tankless units can consume between 100 and 150 amps while they're operating. One hundred fifty amp panels and smaller cannot handle them. There is also a possibility that with a 200 amp panel, lights dimming and other low voltage incidents may occur.
  3. The flow rate of hot water at showerheads may be significantly less compared to your present flow or your expected flow. Tankless water heaters are very sensitive to how fast water flows through them. The slower the flow, the hotter the final water temperature.
  4. Any reported electric cost savings between a tankless and a tank type water heater are based on the assumption of standby losses experienced by the tank model. It requires the same amount of electricity from both units to produce hot water. But today's electric tank type water heaters use foam insulation which is very effective in keeping water hot for longer periods of time than the less effective insulation of several years ago, thus greatly reducing any standby loss and making it a moot point. The California Energy Commission warns consumers that because of these improvements, electric tankless water heaters often don't save much energy or money compared to tank style models.
  5. When two or more tasks requiring hotwater are performed at the same time, the water temperature from a tankless electric water heater gets cooler for both tasks. The temperature of hot water from tank style electric water heaters is not affected by simultaneous multiple tasks.
  6. Tankless electric water heaters are much more expensive to purchase than tank style models. And they are more complicated in their construction making homeowner maintenance more important. The present water heater service industry does not have the same large network of skilled servicemen available for tankless units that exists for tank style models.
  7. Tankless water heaters are NOT instant. If a tankless unit is installed in a basement the same distance from a shower as a tank model, it will take more time for hot water to reach the showerhead from the tankless unit. Tank typewater heaters send hot water into the plumbing lines as soon as the shower faucet is turned onto hot. But tankless units require a little more time to start sending hot water into the lines because they have to produce it first.
  8. In winter, as the incoming water temperature drops, the maximum temperature of the tankless water heater's capability drops also. Colder winter water requires more heat to warm it up to 120 F. The tankless water heater cannot compensate for this colder water unless the flow rate is slowed down. Lower flow rates are frustrating to homeowners and not an appealing solution.
  9. If homeowners in large numbers choose tankless electric water heaters, our electric rates will go up. Most hot water is consumed in the morning when we awaken and again in the evening after we return home from work and school. These two time periods are REMC's daily peak times for providing electricity to our customers homes. Most hot water produced by a tank type unit occurs while we sleep and are away at work or school. So the electricity we demand for hot water production will be less at those two peak times of the day from a tank type unit. Tankless units have no hot water stored and must consume all the electricity to produce it during the peak time periods with a heater that is five times larger than that of a tank style unit. This will cause power availability challenges for Harrison REMC's wholesale provider, Hoosier Energy. The solution could be for Hoosier Energy to buy more expensive electric power on the deregulated wholesale market to meet the demands at those two peak periods of each day or invest in construction of another electric power plant. Either choice will increase the electric rate to Harrison REMC customers.

Call Bob Geswein at Harrison REMC, 738-4115 or 951-2323 to discuss all the issues of tankless water heating. The rest of the story should be told.

Bob Geswein is the energy efficiency specialist for Harrison REMC.


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