Everything you need to know about tankless water heaters

Every homeowner with a family knows the experience of running out of hot water on a busy morning. That happens because you exceed the total amount of water that your standard water heater has heated before the morning even started. In contrast, demand-type water heaters (also known as tankless water heaters) heat water as it’s needed at the tap. This can save you money and headaches.

For a free estimate on a new tankless water heater, call Wagner. Our plumbers are the very best in Albuquerque. We can professionally install a new tankless water heater in your home and put you on the path to less-stressful mornings and lower energy bills.

What are “demand-type water heaters”?

Tankless water heaters, also commonly known as demand-type water heaters, function similarly to regular (or “standard”) water heaters. They heat water for you to use throughout your home, from your sink to your shower and your washing machine to your dishwasher.

Here’s the difference: while standard water heaters heat water ahead of time and store it in a tank, tankless water heaters don’t store water at all (hence, the name). Instead, by running water past burners, they rapidly heat water as it’s needed (which explains the “demand-type” name).

As homeowners look for ways to save money and make their homes more energy-efficient, tankless water heaters are becoming an increasingly popular choice for homes here in the United States. Overseas, in Europe and Asia, tankless water heaters have been the norm for decades, due in part to their more efficient design and their smaller physical footprint in the home.

In this article, we’ll walk you through everything there is to know about tankless water heaters, including how they work, what the pros and cons of owning one are, and how much they’ll cost you to install.

How do demand-type water heaters work?

Demand-type water heaters heat your water as you need it. When used properly, they provide you with these benefits:

Continuous hot water
Less maintenance
No risk of water damage from a burst tank
Long-lasting design
Affordable options

Most homes use a water heater that includes a tank of water. This tank can hold up to 40 or 50 gallons of hot water, but doesn’t always heat water fast enough to keep up with extended demand.

Because a demand-type heater doesn’t have a holding tank, you won’t waste energy on keeping a large amount of water warm. Plus, on top of all that, they’re space-saving, which makes them very popular for vacation homes, cottages, or even tiny homes.

Related: What you need to know about tankless versus standard water heaters

What are the advantages of tankless water heaters?

First, since tankless systems provide you with hot water as needed, they can constantly “refresh” the supply of hot water as it is used at the faucet. The result? You have hot water that effectively can’t run out.

Any homeowner with a family understands just how much this matters. When everyone’s getting ready in the morning, standard water heaters can run out, leaving someone with a disappointing, cold shower.

In addition, tankless water heaters are more energy-efficient than standard systems. Overall, in a home that uses 41 gallons or less of hot water, these water heaters can save 24-34%. Add that up over the course of a year, and you’re effectively saving quite a bit!

A final difference: many tankless systems can be wall-mounted. This frees up the “footprint” taken up by a large water heater tank, which can be an obstacle in garages or utility closets.

What are the disadvantages of tankless water heaters?

There aren’t many. Most homeowners who upgrade to a tankless water heater are relatively satisfied with their decision to do so. However, there are several drawbacks worth noting.

The first is the upfront cost of tankless water heaters. On average, installing a demand-type water heater will cost anywhere from 2-3 times as much as a standard one. For many homeowners, this is a large cost to take on all at once. However, if you’re in a position where you can afford to upgrade, you should, because tankless systems regularly pay for the difference over their lifetime, in both their increased efficiency and in their longer lifespan. It’s not unheard of for some homeowners to have a single tankless system in the same time their neighbors have gone through two tanks, which helps even out the cost picture in the grand scheme of things.

Tankless water heaters have a limited capacity, measured in their gallons-per-minute (GPM) flow rate. In other words, they can only heat so much water at once. If you’re the head of a busy household, this might be something worth talking to our plumbers about. Trying to run the dishwasher, washing machine, shower, and sinks all at once might exceed what the system can provide. For larger homes, some get around this by installing two or more systems, but that might not be a fit for every homeowner.

How much do tankless water heaters cost?

Earlier, we mentioned that tankless water heaters—on average—cost about 2-3 times what a standard water heater does. But, how much does that actually work out to?

According to data collected by This Old House, homeowners can expect to pay between $1000-$2000 for a gas-fired demand-type water heater, with electric models running about $100-$200 cheaper. Of course, there’s a lot of factors that go into a real quote from a plumber—the exact make and model of the system, local installation costs, where it’s being installed in your home—but that $1000-$2000 range should give a ballpark figure to work with.

Are there any rebates available?

Here in Albuquerque, the answer is “Yes.” Throughout the country, many utility companies offer rebates on tankless water heaters. As energy-efficient systems, they’re better for the environment and help cut down on electrical demand—especially as more and more utilities switch to renewable forms of energy production. New Mexico Gas Company is no exception. In 2022, they’re offering a $3000 rebate on Energy Star-certified gas water heaters. This means homeowners can upgrade to a more efficient system and get some money back in return.

How big of a tankless water heater do I need?

Unlike standard water heaters, where “size” refers directly to the capacity of its tank, when most people think of “size” for tankless systems, they’re really thinking about its output—how much hot water it can deliver in any given amount of time. In the world of plumbers, this is measured in BTUs, a unit of heat energy. To rapidly heat water to the needed temperature, your tankless system needs to be able to exert a lot of heat all at once. The higher its BTU output, the more heat it can provide, which means the more water it can disperse at a single time.

As you might expect, there’s a lot of math involved in figuring out exactly how many BTUs your home really needs. Thankfully, our plumbers are experts in this area. They’ll work out just what size of tankless water heater your home needs, based on what peak demand might look like, how efficient the system is, and what the average temperature of your tap water is. Seriously—tap water in warmer climates like here in Albuquerque takes less energy to heat up than that from colder places.

Related: Adjusting your water heater’s temperature

Do tankless water heaters need to be maintained?

While tankless water heaters are less susceptible to some of the long-term problems that can plague standard models—such as corrosion of the tank walls—they’ll still require annual maintenance. This includes flushing out the system, checking that its burners are still functioning properly, and removing any mineral buildup. For the latter, nothing intensive is required: most homeowners can do this themselves by flushing the system out with vinegar to help break up scaling.

Of course, our team is always here to help with maintenance. If you want to keep your water heater running at its best, turn to your friends at Wagner—we’ll help ensure that it does.

Is a tankless water heater right for your home?

Installing a tankless water heater results in many benefits. You can able to avail federal tax rebates of up to $200 when you install gas tankless heaters. Apart from that, you will also benefit in the form of lower energy bills.

In addition, you can expect to save around $100 or more in a year in water bills depending on the water usage. Tankless units heat water only when the tap is turned on. There is no need to heat water in the storage tank, which means less wastage of water. This results in reduced energy bills.

Another advantage of tankless water heater is that they provide instant hot water. There is no need to wait for the warm water to come out of the tap. Also, since the water heater is compact, it does not take up any real estate space.

Tankless water heaters also have a longer life span. Conventional storage tank heaters have a lifespan of about 10 years. In contrast, the tankless water heater can last for up to 20 years. So, in the long run, you will save more due to less need for a replacement of the water heating device. This is one of the most important things to consider when weighing the pros and cons of tankless water heaters.

You need to weigh-in all the pros and cons before making a decision to buy the tankless water heater. Make sure that you contact a professional to install the water heater. Installing a water heater is not a DIY task and requires expert level skills.

Choose the best type of water heater for your home

There are many models of demand-type or tankless water heaters. Just like a traditional water heater, you can choose between propane, natural gas, and electric energy sources.

As previously mentioned, one major downside to a demand-type water heater is the output. Unlike a tank water heater, you’ll be able to heat a limited amount of water at a time. Electric units in particular struggle to keep up with more than one faucet or appliance running at the same time.

These heaters also cost more than a traditional water heater. However, this larger upfront cost will typically save you even more on your monthly energy bills.

Carefully compare each model to determine the best option for your home. Natural gas heaters tend to provide hotter temperatures with a higher gallon-per-minute flow, but they also produce more emissions and require additional venting.

Watch: 3 things to know about tankless water heaters

Check out this video from Matt Risinger to learn more about tankless water heaters before you have one installed in your home.

Summary: Why upgrade to a tankless water heater?

If you’re at the point where you need to replace your old water heater, consider upgrading to a tankless system for these benefits:

Energy savings for decades to come
Increased home value of having a tankless water heater
Unlimited hot water
No risk of a water heater tank burst

Contact Wagner today for your new water heater

If you’re ready to make the switch, or if you need more information about this dynamic water heating alternative, contact Wagner today to talk to a professional plumber about your particular situation. With a demand-type water heater, you’ll never run out of hot water again.