A tankless water heater is a modern device that only makes hot water when you need it. In this way, it differs from a conventional water heater, which holds a reserve supply of hot water in a storage tank. At purchase, a tankless unit will typically cost you more money than a conventional unit. For this reason, you may shy away from a tankless water heater in an attempt to save cash. However, for a number of reasons, you can actually trim your household expenses by purchasing a tankless unit. The trick is to think about long-term costs rather than short-term costs. With that in mind, let’s look at three ways in which you save money by installing a tankless water heater instead of a conventional storage water heater.
- Lower Replacement and Repair Costs
A conventional storage water heater has a lifespan of anywhere from eight to 15 years. (The exact life expectancy of a heater depends on a wide range of factors, including the make and model of the unit and your normal pattern of hot water use.) In contrast, a tankless water heater typically has a useful lifespan of 20 years or more. If you plan on owning your home for an extended period of time, you will eventually have to deal with the major expense of water heater replacement. However, since conventional storage units don’t last nearly as long as tankless units, you will have to replace a conventional heater much sooner than you will have to replace a tankless heater.
The cost of storage heater replacement varies from region to region across the country. At the low end, a new unit could cost you as little as $700 or less. However, at the high end, a new storage heater could cost as much as $2,000 or more. This means that, if you live in your home for roughly 30 years, you could face $6000 or more in heater replacement expenses. During that same span of time, you may only need to replace your tankless water heater once. Although the average tankless unit costs quite a bit more than the average conventional unit, you could still save yourself hundreds or thousands of dollars in the long run.
Any heater can develop problems that call for a minor or major repair. If you need to repair a conventional storage water heater, you may end up spending considerably more money than you would need to spend repairing a tankless water heater. That’s because, compared to a conventional unit, the average tankless unit has parts that are relatively simple to access, remove and replace. This means that you can easily extend the life of your tankless water heater while keeping your costs under control. If you have hard-to-fix problems in a conventional water heater, the path of least resistance may lead you to the greater expense of an entirely new replacement unit.
- Lower Utility Costs
Whether it’s powered by natural gas, propane or electricity, the average tankless water heater operates more efficiently than the average conventional storage water heater. For households that use 41 gallons of hot water or less each day, the increase in efficiency ranges from a low of 24 percent to a high of 34 percent. The efficiency improvements for households that use more than 41 gallons of hot water are not as spectacular, but still significant.
Simply put, increased energy efficiency translates into lower utility costs. That’s because you don’t have to use as much energy to supply your home with hot water, and your energy use accounts for a large portion of your utility bill. Lower energy consumption = cash savings. With a tankless unit installed, you can potentially shave up to 20 percent off your monthly hot water bill.
According to the U.S. Department of Energy, the average American family lowers their annual utility costs by $100-plus when they install a tankless water heater. This may not sound like much, but it helps to remember that the savings you receive from a tankless unit build up steadily over time. Over the lifespan of your unit, an annual $100-plus savings becomes an accumulated savings of $2,000 or more. And on top of that, you receive the financial benefits of longer times between unit replacement, as well as the benefits of more convenient repairs. In the long run, you can easily keep your utility, replacement and repair costs low enough to have a new tankless water heater largely pay for itself.
- Tax Rebates Are Available
If your gas- or electricity-powered tankless water heater uses substantially less energy than an equivalent conventional water heater, federal guidelines let you claim a tax rebate for helping to make society more energy-efficient. Currently, that rebate is $300. There may also be additional tax breaks available for you at the state or local level. States that let you lower your tax bill if you have a qualifying tankless water heater include New Jersey, Virginia, Connecticut, Oregon and Colorado. Check with your state’s energy department for the details of available programs. You can also check with officials in your county or city for local programs that provide financial incentives for households with tankless water heaters. To identify qualifying high-efficiency tankless water heaters, look for units marked with the Environmental Protection Agency’s Energy Star label.
Seek Advice from an Experienced Plumber
Not all tankless water heaters are the same, and the type of heater that works best for you will depend on several factors. The most important factors include the type of energy you use to heat your household water (natural gas, propane or electricity) and your household’s typical level of hot water consumption. For a complete discussion of your available options, contact an experienced plumber in your area. A reputable plumbing expert will be able to make recommendations based on your budget and other factors. In addition, a plumbing expert has the know-how required to install your new tankless water heater, establish an appropriate plan for heater maintenance and repair any problems that arise over time. Just remember that tankless units may cost you more up front, but you can count on a steady return on your investment for decades to come.