Is going "tankless" as liberating as it sounds? Is owning a tankless water heater a solid indication that you're saving money while reducing environmental damage?

Your answer to these questions may depend on whether you own or are buying a newly-constructed home versus living in or purchasing an existing, decades-old property.

Conventional water heaters heat litres of stored water which is kept hot 24/7, even when there is no demand. Tankless units are heaters which heat water on demand, then stop.

First of all, don't get sanctimonious if your tankless water heater was part of the features of the new home you bought or had built. Starting from scratch and incorporating energy-efficient, environmentally-friendly systems during construction is always easier, and usually less expensive, than retrofitting, or adding a modern system to an older home.

The benefits and cost-considerations of tankless water heaters in new homes can make this installation a feasible if not a preferred alternative to conventional tank-style heaters. New home construction standards are normally higher than those that existed for homes built in the last century or earlier. New plumbing, electrical, sound-proofing and other systems favour optimum installation and operation of tankless water heaters and other modern technologies.

If you own or want to buy an existing property, your commitment to reducing "your footprint" and saving energy may not be enough to make tankless water heaters the right way to achieve your environmental and financial goals. You can still have an energy-efficient, green home with a conventional water heater, but you'll just have to go about it differently.

One of the most important lessons to learn about the current rush toward "green" is that there are just as many inappropriate applications of good ideas and over-sold environmental or energy-efficient solutions as there are "right fits."

Don Fugler, Senior Researcher in Policy and Research at Canada's national housing agency, Canada Mortgage and Housing Corporation (CMHC), is currently managing CMHC's initial tankless field project designed to determine the actual savings gained when converting from a well-functioning conventional water heater to a tankless unit.

"Basically, what we hear is that tankless water heaters do save energy in a lot of cases, but what is not necessarily established so far, is what people should expect," said Fugler. "It is probably different from the theoretical savings—that you just calculate based on efficiencies. What house usage is unlikely to get significant savings? The fact [is] that water heater usage or homeowner draws on hot water are a lot different in reality than they are modelled in standards. This makes a difference because the way they are modelled in standards actually benefits tankless water heaters. I don't think they set it up this way, it just does."

Tankless water heaters are not a new idea, just relatively new to Canadians. In retrofit situations, they may not always be practical, cost-effective or feasible. Fugler offered a few issues to consider in evaluating whether tankless is right for you:

• Net result may not be a gain "Part of the problem, or part of the solution, is tank heaters lose their heat to the house....So even though a conventional water heater does lose heat, it is seen to be heating your house and that is an asset for two thirds of the year.... In Canada, which is more a heating than a cooling climate, tankless is only going to have a third of the advantage that it may have in a cooling climate." Fugler explains that expected savings from converting to tankless may not materialize because, while fuel consumption by the water heater may go down, fuel consumption to replace heat to the house may increase. This has been found for shifts to high-efficiency furnace fans and CFL light bulbs.

• Billing disappointment The quoted percent of savings should be applied to the portin of the gas or electric bill represented by the water heater. With all the charges piled confusingly on a gas bill, an absolute savings may not be visible. If you expect to save significant amounts, you may be disappointed.

• Pay back clarity For the two reasons above, the quoted pay back time may be hard to calculate or much longer than stated. Sales representations would normally include best case scenarios. Where hot water bills are high, savings could be more noticeable. With low or conservationist usage, the savings may be small and the pay back much longer.

• Hot water delivery How long does it take hot water to arrive at the tap? Since home designs usually locate heaters in an otherwise unused corner of the basement, second-floor and higher bathrooms may be a long way off. Having to run water as long as 5 minutes to get the hot may result in wasted water. Low-flow shower heads increase delivery time. Anti-scald valves like those required in new homes may also interfere with hot water availability. Recirculation pumps may help this problem, but that's another cost to consider.

• Heating differential Municipal water may be very cold, requiring considerable fuel to heat it to the desired temperature. Drain water heat recovery installations recycle hot wastewater to heat up incoming cold water to warm by spiralling the wastewater piping around the intake pipe. However, this approach is only practical for those who regularly take long hot showers, not baths.

• Flow limits and use patterns Tankless heaters have minimum flow limits, so they don't heat water for small draws like rinsing your hands. Some users turn on a second tap to reach the flow threshold for hot water at the tap where they want low flow hot water. It is this type of water-waste pattern and other use changes that are of interest to Fugler in the current research project. To achieve maximum desired flow, particularly to have two or more simultaneous uses with lots of hot water, intake pipes may need to be increased to 3/4 inch from the conventional ½ inch. In large, high-usage homes, more than one unit may be advisable.

• Adequate fuel supply Gas supply input may need increasing to 3/4 inch pipe to achieve desired hot water flow. A comparable cost may be required to upgrade to a larger service panel for an electric tankless unit.

• Venting and noise The exhaust gases and moisture from gas tankless water heaters are vented outside, not into a chimney, in a manner dictated by bylaws and codes. Proximity to neighbours may cause complaints about noise and condensation, or it may make the installation impossible. Decks and patios may also restrict venting choices. More expensive and higher efficiency condensing units may offer more venting flexibility, but installation costs may increase. If venting is not possible, an electric unit may be the only tankless alternative.

Tankless water heaters are expensive to purchase and installation in Canada. Fugler predicts that these and other issues will be resolved through technological advances and government regulation. Tankless water heaters will become the new normal in the decades ahead.

For now, invest in knowledge in advance of a purchase, or regret in hindsight...your choice. Don't rely on salespeople or installers to make decisions for you. Buyer beware is the law. Buyer be aware is the solution.

Source: "Tank, Tankless, Thankless" © 2009 PJ Wade (Catapult Publishing.com [ CatapultPublishing.com ]

Published: July 14, 2009

Use of this article without permission is a violation of federal copyright laws.

Futurist and Strategist PJ Wade is "The Catalyst" - intent on "Challenging The Best to Become Even Better." PJ earned this title by translating the dynamic impact of Boomers and their multi-generation families into relevant insights that start people thinking and taking action—in business and in life. Author of 8 books and more than 1800 published articles, PJ encourages individuals to become their own futurist. PJ writes and speaks about the insight, knowledge and solid decision-making skills that professionals and their clients need to live and work in this vortex of change. For instance, since PJ knows that home is headquarters for the new decades-long "unretirement," she wrote the popular book "Reverse Mortgages: Best Friend, Worst Enemy...Your Choice!", which is filled with suggestions and cautions on protecting, building and managing home equity. Her new business book, "What's Your Point?: Cut The Crap, Hit The Mark & Stick!" will be published in 2012. As The Catalyst, PJ provides strategic communication, client appreciation and advanced education services to the financial, tourism, lifestyle and service sectors - and the clients they serve. A frequently-quoted financial and business commentator, PJ is a thought-provoking strategic speaker who offers practical, real-life suggestions on leaving "the box" behind and embracing Forward Thinking - a talent she regularly demonstrates in this column. For more on keynotes, blogs, books and information on a range of 21st-Century topics, visit TheCatalyst.com.