Comparison of Tankless Water Heater to Storage Tank Water Heater

In a hot water storage tank heater, energy is required to heat the water in the storage tank and to keep it hot. In both storage and tankless heaters, the basic efficiencies of initially heating the water are very similar; in fact, the energy consumptions are very similar at this point. This is because the amount of energy required to heat a fixed amount of water is determined by a simple formula as follows:

Flow rate of water in any unit (e.g. gallons per minute) x a constant – called specific heat x the number of degrees the water must be heated by …. Interpreting this in simple terms, it means if you double the flow and want to keep the temperature the same, you must double the energy supplied be it in the form of electricity or gas or any other energy type.

However, here is where the difference in overall energy efficiency exists… a feature of tankless water heaters is that no energy is consumed in overcoming the standby losses or conventional heat losses commonly encountered in a storage water heater tank. To reduce these losses, tank storage water heaters should always be well insulated … insulation does not prevent the heat loss completely but reduces the rate of energy or heat loss dramatically. In most cases, one and a half inches of foam insulation is good.

Important questions for the energy conscious consumer are: “How much energy is lost during standby?” and, of course, the really important question: “How much are the hot water storage tank energy standby losses going to cost me?” The ability to compare cost and energy savings between the alternative tankless and hot water storage tank systems or features is important

To be able to make these feature comparisons meaningful and to understand this site better it is important to define a few terms:

  • Energy Factor: every tankless or storage tank heater must be provided with a certified Energy Factor. This factor, in simple terms, means that if the Energy Factor is high then the annual cost of power to run the tankless hot water heater or the storage heater will be lower than it would be for a low rated Energy Factor. Gas tankless water heaters Energy Factors typically range from 0.64 to 0.82.
  • First Hour Rating: this number refers to the amount of hot water the heater can supply per hour … if a storage tank system is in use, the assumption is that the tank is full of hot water at the start of the first hour.
  • Heating Energy: the energy required just to heat the hot water.
  • Standby Energy: the energy that will be lost based upon a tank full of hot water just standing there unused and, in this state, it will lose some heat depending upon how well insulated the system’s storage tank is. The water will, thus, cool down and more energy will then be required to bring the temperature back to that required point. The average U.S. home will use a 40 gallon gas-fired hot water storage heater. Refer to the GAMA (Gas Appliance Manufacturers Association) guide. These hot water heaters will have Energy Factors ranging from 0.54 to 0.64.
  • Average Gas Energy Cost: it is assumed that the national U.S. average fuel cost of 0.6 $/therm will be used.
  • Electricity Energy Cost: it is assumed that the average national cost is $0.06 per kilowatt Hour.
  • Hot Water usage rate: this can vary a great deal based upon the number of family members and the time of day. The correct heater should be designed on the basis of maximum hot water heating load. In other words, what amount of hot water is required at the busiest time of day.

Features and Benefits of a Tankless Water Heater

Features and Benefits of a Tankless Water Heater

  • Water heating accounts for 20% or more of an average household’s annual energy expenditures. The yearly operating costs for conventional gas or electric storage tank water heaters in the USA average $200 or $450, respectively.
  • One way to reduce this expenditure is to use an on-demand, also called Tankless, instant or instantaneous hot water heater. On-demand water heaters are common in Japan and Europe. They began appearing in the United States about 25 years ago.
  • Unlike “conventional” storage tank water heaters, a feature of Tankless water heaters is that they heat water only as it is used, or on-demand, which means as soon as the tap is opened the heater starts up. To be able to heat the water quickly on-demand, the heat rating of these Tankless heaters is very high.
  • Once activated, the heater delivers a constant supply of hot water, in most cases, unless too much hot water is demanded in which case the unit may reduce the temperature or flow rate or both… remember, the heater can only deliver a designated amount of energy.
  • They come in a variety of sizes for different applications, such as a whole-house water heater, a hot water source for a remote bathroom or hot tub, or as a boiler to provide hot water for a home heating system.
    They can also be used as a booster for dishwashers, washing machines, and a solar or wood-fired domestic hot water system. You may install an on-demand water heater centrally or at the point of use, depending on the amount of hot water required. For example, you can use a small electric unit as a booster for a remote bathroom or laundry.
  • Using low-flow shower heads and water-conserving faucets is a good idea with on-demand water heaters. On-demand water heaters cost more than conventional storage tank-type units.
  • The appeal of on-demand water heaters is not only the elimination of the tank standby losses and the resulting lower operating costs, but also the fact that the heater delivers hot water continuously.
  • Most tankless models have a life expectancy of more than 20 years. Storage tank water heaters last only 10 to 15 years. Most tankless models have easily replaceable parts that can extend their life by many years.