The Fabled Tankless Water Heater

By
Home Inspector with Jay Markanich Real Estate Inspections, LLC

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.

EVEN WITH THIS MARVELOUS ADDITIONAL WARRANTY, I AM GOING TO BET MY NEW LITTLE UNIT WILL NOT LAST 60 YEARS.  PLEASE EXPLAIN TO ME, WHAT IS MY SAVINGS?

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!!

One more point - they break down often and are really expensive to repair.  Keep that in mind too!

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!

 

 

Posted by

Jay Markanich Real Estate Inspections, LLC  

Based in Bristow, serving all of Northern Virginia.

Office (703) 330-6388   Cell (703) 585-7560

www.jaymarinspect.com


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Re-Blogged 12 times:

Re-Blogged By Re-Blogged At
  1. Lyn Sims 05/15/2011 12:05 PM
  2. Larry Brewer 05/15/2011 01:02 PM
  3. Barbara-Jo Roberts Berberi & Corinna Birgit Cromartie 05/15/2011 01:06 PM
  4. Nancy Milton Holtzscher 05/15/2011 01:14 PM
  5. Robert Butler 05/15/2011 02:18 PM
  6. Peter Pfann @ 1 Percent Realty Victoria, and Pay-Less For Victoria Real Estate Results! 05/15/2011 05:13 PM
  7. Dick and Dixie Sells 05/15/2011 06:39 PM
  8. Michael Eisenberg 05/16/2011 12:35 AM
  9. Mike Roberson 05/16/2011 05:06 PM
  10. Carol Faaland-Kronmaier 05/17/2011 09:08 AM
  11. Bob & Leilani Souza 05/18/2011 04:52 PM
  12. Kenneth Young 05/19/2011 02:40 AM
Topic:
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Location:
Virginia Prince William County Bristow
Groups:
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Show All Comments
Rainmaker
1,278,026
Jay Markanich
Jay Markanich Real Estate Inspections, LLC - Bristow, VA
Home Inspector - servicing all Northern Virginia

Doug - those calculations were for me and what I selected!  As to any tax credit, remember, what saves me costs somebody else...

Eric - try to figure it out for yourself, based on your needs and what you would select to try to satisfy them!

May 16, 2011 06:15 AM #122
Rainmaker
758,944
Sharon Parisi
Keller Williams Dallas Premier Realty - Dallas, TX
Dallas Homes

Jay, I love your post!  I have heard the same information that you have and that you have summarized the information!  In my opinion, the only reason to go tankless is if you are building a new property and can afford it, or you need the closet/space that houses the existing water heater and can afford the expense.

May 16, 2011 08:45 AM #123
Rainer
47,983
Lori Fishkind
Reliant Realty - Franklin, TN
Realtor

Hahahaha.  A pan or other diverter does not work when your tank is spouting like a water fountain. That is what happened to me a few years back and we where away from the house for a few hours No pan, or diverter in the world would have saved us from that mess.

 

 

May 16, 2011 12:10 PM #124
Rainmaker
1,278,026
Jay Markanich
Jay Markanich Real Estate Inspections, LLC - Bristow, VA
Home Inspector - servicing all Northern Virginia

There are a lot of good reasons to have one Sharon, but to me it only makes sense if it is financially beneficial!

Yikes Lori!  That's why I tell people that the drip pans "theoretically" capture water leaks!

May 16, 2011 02:13 PM #125
Rainer
408,559
Gary Coles
Venture Realty International - Las Vegas, NV
Latin America Real Estate

Jay, Your post is interesting -- but, I installed a Takagi T-K3 tankless water heater in my mom's house and it not only supplies plenty of hot water but heats over 4500 sq. ft. in temperatures as low as 35 below zero.  It is shown on line for sale at $751.

May 16, 2011 06:28 PM #126
Rainmaker
1,278,026
Jay Markanich
Jay Markanich Real Estate Inspections, LLC - Bristow, VA
Home Inspector - servicing all Northern Virginia

It looks like a good unit Gary.  I am wondering why they recommend lining up four of them to gain a 21 gpm flow.  I am not sure if one would supply the gpm we would need, but it looks like a good unit.

May 16, 2011 06:42 PM #127
Rainmaker
68,576
Vince Santos
StepByStep Home Services LC - Canton, MI
Southeast Michigan Home Inspector

I've been complaining, more or less to myself, about these for a while. Clients always ask me my opinion on them and they seem to think they are the best thing since sliced bread. Of course when you put things into perspective for them the appeal tends to diminish slightly.

May 17, 2011 07:27 AM #128
Rainmaker
1,278,026
Jay Markanich
Jay Markanich Real Estate Inspections, LLC - Bristow, VA
Home Inspector - servicing all Northern Virginia

Cute avatar Mr. Vince!  Perty!  I think people need to investigate what is available to them and what their costs are, product and utility, and try to determine for themselves!

May 17, 2011 07:29 AM #129
Rainmaker
302,263
Carol Faaland-Kronmaier
Weichert, Realtors; Hillsborough - Hillsborough, NJ
PhD, e-PRO, Manville, Hillsborough, Somerset NJ Homes

Jay, Thank you for the information. This is consideration in my own home, along with one of my clients. Carol

May 17, 2011 09:17 AM #130
Rainmaker
1,278,026
Jay Markanich
Jay Markanich Real Estate Inspections, LLC - Bristow, VA
Home Inspector - servicing all Northern Virginia

You are welcome Carol.  Be sure to do the research where you are!

May 17, 2011 09:51 AM #131
Rainmaker
229,431
Reuben Saltzman
Structure Tech Home Inspections - Minneapolis, MN
Minneapolis Home Inspections

Great post, Jay. I ran the numbers myself back in 2005, and I came up with similar figures.  The break-even point was completely unrealistic.  Couple that with the hot water / cold water sandwich effect... and forget it.

May 17, 2011 10:33 PM #132
Rainmaker
1,278,026
Jay Markanich
Jay Markanich Real Estate Inspections, LLC - Bristow, VA
Home Inspector - servicing all Northern Virginia

Reuben - there were a couple of posts here where people had installed what were very inexpensive units.  In those cases I am sure there is a better break even, but the trade off is that you get a cheap unit.  The units I looked at were not cheap.  The other issue is water hardness too.  Seems to do the units in quickly.

I don't understand your sandwich effect.  What do you mean?

May 18, 2011 04:33 AM #133
Rainer
208,999
Scott Seaton Jr. Bourbonnais Kankakee IL Home Inspector
SLS Home Inspections-Bradley Bourbonnais Kankakee Manteno - Bourbonnais, IL
The Home Inspector With a Heart!

Jay, I would even add that installing a heater blanket and pipe insulation will help with the gas savings on the standard heater. But the biggest years adder is draining the tank to remove the sediment on a regular basis. Especially in hard water areas. Thanks for doing the math for me too.  

May 18, 2011 08:43 AM #134
Rainmaker
959,211
Bob & Leilani Souza
Souza Realty - Roseville, Rocklin, Lincoln, Loomis, Granite Bay, Penryn, Newcastle, Auburn, Meadow Vista (California) - Roseville, CA
Placer County, CA (Roseville, Loomis, Granite Bay)

Jay, I just re-blogged your post...thanks for providing us with your perspective of the tankless water heaters! We have contemplated installing one in the last custom home we built, but decided against it due to cost and the fact that there was not a space issue. :)

Leilani

May 18, 2011 04:56 PM #135
Rainmaker
229,431
Reuben Saltzman
Structure Tech Home Inspections - Minneapolis, MN
Minneapolis Home Inspections

Here's a good explanation of the cold water sandwich effect - http://www.rinnai.us/tankless-water-heater/faq/#question-21

May 18, 2011 09:34 PM #136
Rainmaker
1,278,026
Jay Markanich
Jay Markanich Real Estate Inspections, LLC - Bristow, VA
Home Inspector - servicing all Northern Virginia

I agree with that Scott!  And our water here is pretty hard.  We don't have too much exposed copper to be able to wrap, but what we have wrapped is good.

Thanks Leilani.  The cost seems to be a big issue, along with hard water and what the Reuben proposed!

Thanks Reubs!  I like their little mention there which says, "the cold water sandwich effect cannot be removed completely from tankless style water heaters."  That has GOT to be comfy in Minnesoooota when the water coming in to the house is 38 degrees!

May 19, 2011 07:37 AM #137
Rainmaker
229,431
Reuben Saltzman
Structure Tech Home Inspections - Minneapolis, MN
Minneapolis Home Inspections

Noooo, it's noooot.  Hey, wait, are you making fun of ooour looong vooowels?

May 19, 2011 09:49 PM #138
Rainmaker
1,278,026
Jay Markanich
Jay Markanich Real Estate Inspections, LLC - Bristow, VA
Home Inspector - servicing all Northern Virginia

Noooo Reuuuubs.  Noooota.

May 20, 2011 04:50 AM #139
Rainmaker
244,353
Mike Wong
Keller Williams Realty Southwest - Sugar Land, TX
Realtor, GRI, Project Manager

The only time I will consider a tankless water heater because of its expense is when the water heater is located in an attic. I just don't want to go through the labor of draining and replacing from the attic, or risk a leak.

May 22, 2011 08:09 PM #140
Rainmaker
1,278,026
Jay Markanich
Jay Markanich Real Estate Inspections, LLC - Bristow, VA
Home Inspector - servicing all Northern Virginia

I see heaters in the attic from time to time Mike and never like to see them there!  Even with a drip pan!

May 22, 2011 09:09 PM #141
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Rainmaker
1,278,026

Jay Markanich

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