Upgrading your Water Heater

Is Replacing Your Traditional Water Heater With A Tankless Water Heater Right for You?

People ask us all the time if upgrading to a tankless water heater is a smart thing to do. After all, they are promoted as an energy saving appliance.
The average gas-powered tankless water heater can indeed save you money because they use less gas than a traditional tank water heater. They do not use any gas when you are not at home or when no hot water is in demand. A traditional tank uses gas around the clock to keep the water hot.
According to SDG&E the average home spends about $300/year to heat water. A gas tankless water heater can reduce gas usage by about 23%, or $70 – $80 per year.
Tankless Water Heater
Tankless Water Heater
The cost of a good tankless water heater can be $1,100 – $2,500 installed. Sometimes more. Installation can require a new flue, rerouting water pipes (if you relocate the unit to the exterior), and possibly running a new gas line. Since tankless water heaters demand a lot of gas to heat water quickly, you may need to increase the gas pipe from 1/2″ to 3/4″. Finally, tankless water heaters require a 110 volt receptacle for the electronics and fans.
Alternatively, replacing your traditional tank with a like-kind water heater can cost between $500 and $1,000 including labor.
Many people confuse a tankless water heater with instant hot. However you will still have the same delay getting hot water to your faucet as you do with a traditional water heater. It might actually be longer since the tankless water heaters take a moment to sense the demand, check the temperature of the incoming water, and turn on.
If you are lucky and everything is accessible for a new tankless water heater, the modifications required for a tankless water heater will be minimal. But modifications must be factored into your comparison. The difference in installation costs can range from $300 to $1,000 or more.
The estimated savings on gas from a tankless water heater over 10 years is $700 – $800. This savings is almost completely offset by the higher costs of a tankless water heater and any modifications it requires. As you can see there is likely very little advantage to upgrading to a tankless. And if your electric power ever goes out you will not have hot water. Instead, we recommend simply upgrading your traditional water heater to a new high-efficiency water heater.