Choosing and Installing a Tankless Water Heater

by Patientmomma

When I purchased my country property several years back it was in dire need of updating.  Over the last few years I have gradually replaced many items which were hanging on at their end of life!  The conventional 50 gallon tank water heater was approximately 15 years old and while it worked, it took between 5 to 7 minutes to get hot water to the master bathroom, depending on outside temperature.  I knew it needed to be replaced so I began researching tankless water heaters.  I have no connection to any brand mentioned other than being a happy customer.  I had already decided to use propane gas as a fuel source as I did not want electric and I don’t have access to natural gas. This article describes my research and choice of a water heater.

I lived in Europe for five years and most of the housing had tankless water heaters so I gained some valuable experience with on-demand water heaters; both good and bad.  Fast forward a bunch of years and the on-demand heaters were becoming the rage in the USA because of the high utility costs of conventional tank water heaters.  But I stayed with my 50 gallon tank and paid the price of heating water 24/7/365.

About 8 years ago I was faced with replacing water heaters in a large house. I had a choice to replace three 50 gallon tank heaters with newer models or go tankless.  About that time a friend of mine had her 50 gallon tank water heater, located in her attic, fail and the water damage was significant.  She had to move out of her house for six weeks while ceilings, floors, carpet, dry wall, etc., were replaced.  Her experience was a motivator for me!  I did my due diligence and researched all types of water heaters; both tank and tankless.  The tank type was much cheaper to purchase and install but the utility bill is what made the difference.  The tankless heaters had higher upfront costs, but saved on the utility bill the rest of its useful life.

After going back and forth for months, I made the decision to go tankless.  While the research you must do is the same for any type of tankless water heater, your family life style, location, how long you think you will stay in the house, the availability of desired fuel, and maybe Home Owner Association (HOA) rules will influence your decisions.  I also considered the improved resale value of the home by having energy efficient tankless water heaters.

So what’s the difference?  Basically, the tank heaters hold the water at a constant temperature 24/7/365.  When you turn on your hot water faucet the hot water in the tank mixes with cold water from the house water system and gives you warm water. You pay your utility provider a fee to keep that water hot all the time.   In a tankless system the water heats only at your demand.  When you turn the hot faucet on, the heat exchanger in the tankless unit turns on and provides you hot water, then stops heating water when you turn the faucet off.  Below is a diagram I copied from the Navien website on the components of a tankless water heater.

Choice of Fuel Type:  One of the first decisions you have to make is the type of fuel for the water heater; the choices are electric, natural gas (NG) and propane gas (PG).  If your house is all electric that may influence a decision to install an electric heater; but there is always the possibility of running NG to your house if you are close to an existing line.  Some city/communities/HOA will not allow a propane tank in the yard; but you must ask the HOA and city ordinance folks.  They might allow a buried underground tank, but not an above ground tank. Do a cost comparison of fuel types (if all are available to you); cost of electric, NG or PG.

How big a tank do I need? Another research and decision to make is sizing; how large of a water heater do you need?  Basically, the larger the heater, the more expensive the heater, no matter what brand it is.  The following general information comes right off the internet and you can query “tankless water heaters” and find a lot of data. Now down to the details you need to know…

Maximum Flow Rate:  This is the measure of how much water passes through the water heater at a time, in gallons per minute (gpm). For NG/PG tankless water heaters, it averages between about 6 gpm and 10 gpm but some go higher.  I was told an average shower or faucet has about 2 gpm flow rate; so you can get an idea of how much water flow you use. If you have two adults, two teenagers and 2 younger children, think about the number of water fixtures that will be used simultaneously and how long the water will run if you have teenagers in the bathroom. Will you have people in the shower at the same time you are running the washing machine and your dishwasher?  If your family is two adults and some fur babies, your demand will be different.

The important point is not to confuse the flow rate value with the water heater’s heating capacity. Water flow capacity is NOT how hot the water will be if it’s flowing at 10 gpm. For example, a tankless water heater listed as providing 10 gpm will give you water at that rate, BUT how hot that water can be depends on the energy input of the unit. That is why when choosing a NG or PG tankless water heater you need to pay attention to its energy input per hour, or BTUs per hour.  Now here’s where the info gets more complicated.

Heating Power: There is a whole complex discussion of British Thermal Unit (BTU), joules and temperature explained on many different websites on the internet.  I am not an expert on this so I just used the common knowledge I read on several internet sites.   Basically, about 500 BTU/hr is enough to heat water flowing at 1 gpm by 1 °F. If you know what the incoming water temperature is, it is possible to estimate how many BTUs per hour you need from tankless water heater. You can ask your plumber to figure this out for you.  Water temperatures can vary by season and by location; e.g., New York is colder than Mississippi in the winter so the ground water temperatures will be different.  From my experience 120 °F is the maximum temperature I wanted, because higher temperatures create a scalding risk. You should also know that the BTU number in the product specification sheet is not the actual heating capacity. To calculate how many BTUs are actually used to heat the water, you need to use the energy factor.

Energy Factor: The energy factor for water heaters means the part of the heat energy actually applied to the water and to the total energy input which is delivered to the heater. I wanted an energy factor of at least .9.5.  If you have a four person family, you will need at least 160,000 BTU, higher would be better.  The energy factor needs to be about .9.   For natural gas and propane tankless water heaters, the energy factor varies between 0.8 and 0.95, depending on whether it is a condensing unit or not.  So what is the difference between condensing or non-condensing water heaters?

Condensing Water Heaters:   Simply put, a condensing water heater uses the heat of the expended gas, which would normally be expelled through a vent, as an additional heat source. The waste gas released from the exhaust vent of a condensing water heater is cooler and in the cooling process the water vapor often condenses back to liquid state, which is why it is called a condensing water heater.  Non-condensing tankless gas water heaters have an average energy factor of 0.82; condensing water heaters have an energy factor of up to 0.95. Guess what? Condensing units cost more money; but I think they are worth it.

Activation Flow Rate: One of the things you need to realize is tankless water heaters only start heating when their sensors confirm a certain amount of water is flowing through the system. If the water use does not reach that minimum flow rate, the unit will not be activated and you get cold water. This means if you don’t turn the faucet on full open, the water heater may not turn its heating element on.  Look for a water heater that has a .4 to .6 flow rate.  You do NOT want a 1 gpm flow rate.  Do your homework and check out the product specification sheets and make sure you get a unit with a LOW number minimum activation rate.

Brand and Build Quality: I am very opinionated on this topic so bear with me.  I like hot water; that is why I purchased tankless hot water heaters.  In a former house I had a whirlpool tub that I could not use because the tank water heaters could not provide enough hot water.  After I installed the tankless water heater, I was able to fill the big whirlpool tub and enjoy the experience with HOT WATER.  Sorry, I digressed.

The old saying “you get what you pay for” is true and especially with tankless water heaters. I won’t demean various brands, but I say, do your homework.  If you are on city water your brand choices are wide. Talk to people and quiz your plumber and friends on their opinions of different brands.  Check out websites which compare brands and prices but examine the specification sheets with detail.  Look at:

  • Energy factor: Over 160,000 BTU; Desired 180,000 to 199,000
  • Minimum flow rate: Desired: over 0.26 GPM
  • Minimum activation flow rate: Desired: 0.4 GPM
  • Maximum flow rate: 7.5 to 11.5 GPM/min — this depends on the model and your need

Other Things to Know:

  • Tankless water heaters can be indoor or outdoor, vented or non-vented; depends on what you want/need.
  • Outdoor units should have ALL pipes insulated; some indoor units should also be insulated, depends where you have it installed. I have had both indoor and outdoor units insulted, even though I live in the South. Northern folks MUST have insulation!
  • Tankless water heaters require minimum of ¾” pipes while conventional tank water heaters only have ½” pipes; this should be included in your install price; everything is negotiable.
  • Water heaters need some annual maintenance so put them where you can get to them.

Oh By the Ways:

  • It will take a minute for the hot water to get to your faucet, depending on where you place your water heater. I had to wait 6-7 minutes for my conventional tank electric water heater to get hot water to my master bath shower.  Now with the new tankless one it takes 1-2 minutes to get to my shower.
  • Before you turn on your dishwasher, turn your kitchen faucet hot water full open and let it get hot; then start your dishwasher.
  • It will take a few seconds for the tankless water heater to adjust temperatures from hot to warm or warm to hot. Depending on the type of faucet you have, once you get used to the tankless water heater, you’ll know where to turn the faucet the first time to get the temperature you want.

If you live in the country and are on well water your choices are more limited.  Unless filtered at the entry point, most well water contains a lot of minerals and will corrode any water heater.  Navien brand water heaters have stainless steel innards and will hold up better when connected to well water. Other brand heaters are less expensive; but they usually have cooper innards, which corrode more quickly.

At my place, the well pumps water to an underground holding tank. Occasionally, there is low water pressure between when the well pump kicks on and the pressure pushes the water to the faucets.  This causes a lower flow rate to my faucets, which delays the water heater kicking on.  To me, this is just part of having well water so it does not cause me any concern; I just patiently wait until the well pump does its thing. But it is something you should be aware of if you are on well water.

My Choice: 

Because I live in the country, have a set income and I really like hot water, I decided to purchase and install a propane tankless water heater.  It is an outdoor condensing unit.  I choose Navien because I use well water and Navien is the only brand (that I researched) which has stainless steel innards. The picture is of the installed tankless water heater on the exterior of my house. This is the largest residential unit Navien makes and the insulation is protected by the unit cover. Other brands will work but they will corrode faster from well water. With Navien’s 15-year heat exchanger warranty, the water heater may out last me. I am not affiliated with Navian, I am just a happy customer.

I have purchased three Navien tankless hot water heaters for various houses and I have had no problems with them providing hot water when I wanted it. That said, Navien requires a licensed plumber to install the unit to receive their 15 year warranty.  A good DIYer could probably install the unit, but again, Navien will not warrant it unless installed by a licensed plumber.

The only thing I am unhappy about is I cannot independently light the water heater because it has a closed, self-contained ignition.  That means I cannot take a match to a pilot flame like we could in the old days.  But, I have a propane generator so unless manufacturers stop making propane, I’m good!

The Cost:  Tankless water heaters will cost you more up front; there is no getting around that. But…your utility bill will go down.  In my former city house, the three conventional tank water heaters were NG.  After the Navien tankless NG heater was installed my gas bill reduced by 45% the first full month and after a year the bill was down by 52%.  Currently, my conventional electric 50-gallon water heater cost about $700/year to operate.  Since I have only had this tankless water heater a short while I don’t have statistics to give you; but I anticipate about 4.5 year return on investment (ROI) for the tankless water heater.

The cost will vary around the nation; your location makes a big difference in the price. Your cost reduction and ROI will be different depending on the brand, size of tankless water heater you choose and your family size and use.  You can see most of the retail prices on the internet but remember, your plumber can get a discount.  Installation charges could vary from $800 to $2000, depending on your location, codes and ordinances, how much ¾” piping is used and your plumber’s profit margin. One last plus for tankless water heaters: In 2016 the IRS is allowing a $300 tax credit for installation of energy efficient tankless water heaters.

I’m sure there are some really knowledgeable pack members that can talk technical specs better than I can, so please pitch in and clarify if you can.  My need was to have hot water and my desire was to save money so I decided to switch to a propane tankless water heater.  I cannot put a price on my peace of mind.  I hope this information is helpful.

Comments

  1. I wish we had read something like this before we bought a tankless water heater years ago. Our well water is pretty hard & the water heater ended up a piece of junk because we didn’t know how to maintain it. It was great while it lasted, tho!

    We had a 10-gal. water heater for years, but now have a new bathroom with a 50-gal. heater. Pricey, but I love it. While the water feels like it is routed thru Siberia, it takes less than 2 minutes to get hot – tho when waiting for the shower it can feel like a long time.

  2. Goatlover says:

    We have a propane tankless exterior style water heater on well water and have had zero problems for the past 10 years. However, we also invested in a commercial-grade water purifying system so the water out of our tap is close to bottled water quality! It does pay to do your homework and invest up front if at all possible. Our home also has a conventional tank style water heater that is connected to one of our 3 bathrooms, plus the washer and dishwasher. We like knowing if one of our water heating systems goes on the fritz, we can still take a hot shower somewhere in the house!

  3. Thank you, PatientMomma.

    This couldn’t have come at a better time. My husband and I have talked about getting a tankless water heater for the last couple of years. We decided that this would be the year. We are on well water, our house sits on limestone, and we are about 6-8 miles from a limestone pit using dynamite so our house shakes occasionally. Those are extra considerations whenever we want to add something to our house.

    Now, I have the info I need, in language I can understand. More research is needed, but I should be able to make my decision before spring. After that, it will be difficult to schedule a plumber. Thanks, again.

  4. Our house is old (approx 100 years) and has a huge coal boiler that has been converted to natural gas heating the water for our radient heat. One of the projects I want to do (depending on time/money/and if we stay here) is to replace it and the hot water heater with an on-demand system. I could store an extra 4 months of food in the space the old system takes up.

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  6. mom of three says:

    We had a tankless water heater, put in several year’s ago and it has been wonderful. It replaced our aging water heater too and it made my pantry that I have today. We only had it not work one time because our weather had gotten down into the low teens, and it froze the brass piece and hubby, used his torch to warm it up and the hot water came on a few minutes later. Some have a cover to put over them if you live in a very cold region. We’ve never been that cold since so we just put old closet door’s around it to keep it warmer. I would never be without a tankless, ever again and we use natural gas, to heat the water.

  7. Ron Melchiore says:

    Well done Patientmomma! My only experience with these gizmos was in an exploration camp setting. It’s been many years ago but I did like the concept of on demand hot water.

    There was one that was a bit finicky. It sometimes lost the pilot. And it was a bear to re-light. Perhaps an issue with the thermocouple. Can’t remember now. But it sounds like they have been improved over the last years.

    I do remember being in the hot shower and cold water coming out while still lathered up. Bummer. 🙂

    But I would certainly consider this setup if we were ever to stop heating our hot water through our wood cook stove. A conventional electric hot water heater is impractical for an off-grid home.

    • patientmomma says:

      Ron, The hot/cold water “sandwich” was a curse of the older, less powerful tankless heaters; which have almost gone away. Outside of Europe, I have not had that experience; but I had a friend who had a Rennai who complained about it.

      I still have electricity from the coop, but all my back up systems are wood or propane. I would love to have a wood cook stove with a water heater as a back up; but I’d have to build a new kitchen to do it.

  8. We installed an electric tankless almost a year ago and I love it! I wanted propane but DH didn’t want to make the modifications that would have been needed. Last month we did get propane and I now have a gas range and a gas space heater. Makes me feel much better not being total electric.

    Did not know about the well water. We have county water now but hope to get a well some day.

  9. BlueJeanedLady says:

    Thanks for the article, Patientmomma, very well laid out and informative piece on your research / experiences with the tankless water heaters.

    Our own, current “tank” style water heater – beast of a good burden that it remains – is nearing the end of its expected lifetime and we’ve already made the decision to go the “tankless / on demand” system route next time around but have not yet finalized a decision on what brand or model we’ll be purchasing. Your comments did help to clear up a few points of which I was still confused, so I thank you for this timely (for me anyway – ha, ha!) contribution.

    We are & will be using city supplied, natural gas to power the water heater as well as the city water supply for this unit, however even the city supplied water around these parts is on the hard water side of the spectrum so the stainless steel (versus copper) insides of the unit might be a more beneficial choice for us, too. That matter (the “innards” as you noted) was at least one thing we have not yet taken into full consideration and Good to Know before purchasing, so . . .

    Again, much thanks! 🙂

  10. Almost There says:

    Great information PM. I’m not in the market for this at the moment, but am glad to have the information if I ever do decide to do this. Very well written and in layman’s terms for me to understand. I have hard city water at the moment…. Every time I use my canners, I have to clean them with CLR to get the calcium and lime build up off.

  11. American Pacrat says:

    Patientmomma
    I love our tank less on demand hot water system. I noticed you mention Rennai having cold & hot water issues with friends over seas..I believe.
    Tank less water systems do not like the restriction placed to save water. You must go through all your water faucets removing the water restrictors. If you do NOT have a filtering system before it goes into your tank, every year you run vinegar though the system to clean all the mineral &/or bacterial build up.
    Our AC/heater repair man(& friend)showed me how to do it myself so it would save us money. Takes about 15 minutes or longer depending how long I have not cleaned the system. The left over used vinegar I save for weeds come spring time.

    • We have just purchased a 7 year old home with the Rennai tankless water heater system and would like to flush out the system of any minerals that may have built up over the years since an awful lot of water is wasted when waiting for the water to heat up. Question: what has to be done to flush the system ? Thank you.

  12. American Pacrat says:

    patientmomma
    You did an awesome job on this article, please excuse my poor manners for not saying something prior to my comment.

    • Ronald Beal says:

      While touring around Costa Rica we encountered a tankless system which was very simple and probably cheap. It was nicknamed the suicide heater.
      The unit was attached to the waterline coming into the bathroom. The water went through the unit and came out hot. You mixed it with cold water to control the temperature.

      The “box” was over the shower for shower water. Operated on 240 volts. Approximately 8-10″ rectangular. Water came into the back, got heated then went through the shower head. Have you heard of this system? Thanks..

      • BlueJeanedLady says:

        Hello Ronald! I’ve heard of (seen) the type of hot water systems you are referring to on TV shows such as “House Hunters International” and related home buyer / remodeling / DYI shows that rudely clutter cable television. Granted none of these shows are a good, nor a solid, nor even a believable reference source most times, but here’s MHO on why I think the water heaters you mentioned came to be called suicide water heaters.

        Several potential home buyers (often just actors on many such TV shows) cast in such shows seem to always be concerned, IMHO correctly so, about the electrical source (such as the 240 volt powered water heater box you mentioned) about having an electrical power source so close to a shower / tub water source and consider it deathly dangerous. Therefore, a lot of “potential buyers” (actors) thought of such (especially if installed cheaply as they often look so in the foreign places said TV shows promote) as a potential suicide agreement just waiting to happen.

        In other words, the electrical powered water heater boxes often look as if they could easily fall off the shower / tub wall and immediately electrocute the user of such shower or tub at whim. Thus, many show participants began labeling, naming them as such, “suicide heaters” to suggest anyone daring to use such as risking personal safety by merely using the shower or tub. The actual function / safety of such, I know not, but they don’t look inviting to me in the least! 🙂

        Again, I never put any actual trust / weight on entertainment TV shows as any type of well referenced fact – – – yet what I described, indeed, truly represents where I heard of “suicide heaters” in showers in countries such as yes, Costa Rica, to name at least one country. (And yes, I do watch too much useless television, but I digress.)

        Just a tidbit I thought I’d share, just cuz, “As seen on TV!” (what I’ve seen or the screen, not necessarily what you’ve seen in person) can often be a red flag in itself. 🙂 Take my observations for whatever you might think my interpretation &/or risk assessment might be worth as again, nothing stated on entertainment TV is well referenced IMHO – only word of mouth info / gossip / junk – but that’s why I think even the cast members – and some in-country, local realtors – on such shows call them “suicide heaters.” (Again, JMHO.)

        Regardless, you & yours stay safe & smart and best wishes for all. 🙂

      • patientmomma says:

        Ronald, long time ago I lived in Asia, long before Americans arrived. The few houses which had hot water, had these “hot boxes” precariously wired. We were terrified of them and did not use them. It was so hot (climate temperature) over there we really didn’t need hot water except to sterilize things. During the 80s I lived in the Azores and some of the locals had something similar. Except in the back woods of the West Virginia mountains, I have not seen any of these in the USA.

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