The Fabled Tankless Water Heater

Reblogger Nancy Milton Holtzscher
Real Estate Agent with RE/MAX Alliance in St.Louis' Illinois suburbs 475.122155

Hi, Friends:  My blogging colleague, Jay, who is a home inspector based in Virginina, wrote a great post on tankless water heaters this week.  In fact, it was so instructive, that I decided to share it with my readers in Southwestern Illinois.

My clients and I talk often about water heaters and other household systems and which offer the best bang for the buck over time.

Jay's analysis of the tankless water heater provides a lot to think about. Just because it's the newest thing on the market, doesn't necessarily mean it's the best option for your home.

Read on for more...

Original content by Jay Markanich 3380-000723

My water heater is over 13 years old.  How much longer will it last?  If I was my own home inspection client I would say to myself, "This water heater will last another month or another 10 years.  It is truly unpredictable."  I say that to clients all the time.  It is a very accurate statement!

What are the factors that combine to age a water heater? 

1.  The size of the tank, with larger tanks retaining hot water longer. 
2.  The number of people in a house using hot water. 
3.  Washing machine habits - do you use hot or cold water to wash clothing?  More clothing, more washing, more water heater usage. 
4.  The temperature of the water.  Obviously the hotter the water the more often the unit reignites to heat water, wearing it out more quickly. 
5.  How often you drain the gunk from the bottom.  Manufacturers say to do it every year.  Plumbers say not to, because the draining mechanism is mostly plastic and can break if you aren't careful.  SUCH PREMATURE BREAKAGE MIGHT BE WHY MANUFACTURERS SAY TO DO IT EVERY YEAR!!  Hmmm...  There, now you see just HOW JADED I have become in my old age!
6.  How often you have the burner cleaned, if it is a gas unit.

So, if I am my client and thinking my water heater might possibly blow up in the next month, I should think ahead.  What about the fabled tankless water heater?  I hear the commercials all the time about all the money I will save. 

So I looked into it.

We have a gas water heater now.  I like gas.  It is cheaper in the long run and I would continue with gas.

My research sent me to one of the most popular tankless water heater sites, and I selected the gas model I would buy.  It wasn't the smallest and cheapest or the "ultra," as they call it.

I chose the one in the middle.  It has the right BTUs, 9.4 gallon flow per minute, fits nicely where I would want it, and would connect easily to my existing exhaust stack.  Just like Goldilocks, it is just right.

Getting my gas bill, I went to their website "Savings Calculator."

Their site has an average gas BTU cost of $1.38 per.  That's interesting, because my gas bill says my Distribution Charge and Supply Service Charge (different amounts per BTU) average $.64460 per BTU.  SO MY BTU COST IS MUCH LESS THAN THE WEBSITE'S COST.  That isn't as much to their advantage...

Their website calculator says that given all the parameters and costs put into the formula I will save $48 per year, which is probably true.  That's a whopping, WHOPPING, $4 per month!

And that's using their Savings Calculator!  Remember, I'm jaded.  I imagine that calculator to be a bit like the EPA's calculation of my car's gas mileage.  I have never gotten the mileage they say I will!  But I digress!

Contacting my plumber, who actually installs this particular website's brand (!), I am told that the unit I have selected, will cost me $4700 installed, unless they run into anything "unusual." 

A new "regular" water heater, the same size I have now, and same brand, would cost me, on sale, $1800.  Subtracting that from this tankless installation cost,    $4700 - $1800 = $2900. 

SO, FOR THE PRIVILEGE OF INSTALLING THE FABLED TANKLESS WATER HEATER, I AM PAYING A PREMIUM OF $2900!  And that is a conservative figure.  It uses their formula and a water heater's cost when on sale.

Let's see.  They tell me that I will save $48 per year.  $48 goes into $2900 how many times?  60.42

So given my annual savings, I will break even in sixty years!  Woo-ooo-ooo-ooo-hoo!  This manufacturer says that the heater I have selected offers me  " peace of mind with an industry-leading 12-year limited warranty on the heat exchanger. "  But, if I call now, cause they can't do this all day, I can purchase an additional 5 year limited warranty, but they don't tell me how much that is.


Here is the other rub.  People I know who have the tankless water heaters say they needed to put in two to satisfy their hot water needs.  Really?  Two!  I'm sorry, but I don't think I'm going to live long enough to break even on one, much less two!!

My recommendation:  and remember, I am my own client here -- My Recommendation:  Stick with the old school water heater and you will still be saving money after the next 3 or maybe 4 "regular" water heater installations!



Jay Markanich Real Estate Inspections, LLC

Based in Bristow, serving all of Northern Virginia


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Nancy Milton Holtzscher

Edwardsville/Glen Carbon, Illinois Broker, REALTOR
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