Reuben's Home Inspection Blog


My Beef With Tankless Water Heaters

Reuben's BeefTankless water heaters are sexy.  They take up less floor space, they provide an endless flow of hot water, they're environmentally conscious... and they're really expensive.   If you enjoy showing off your home's mechanical equipment to your friends or you're in to being green at any cost, get a tankless water heater. On the other hand, if you're in to saving dough, doughn't buy a tankless water heater.

A tankless water heater will not save you money.

I stopped by my local big orange box the other day to check up on the latest sales pitch for tankless water heaters.  The brochure for tankless water heaters said they can save up to 25% in fuel costs.  That sounds great, but lets examine what that means. I spend about $12 per month for natural gas during the non-heating season, if I don't include my fixed fuel costs, such as the 'fuel delivery charge.'  This figure includes the gas for my water heater, clothes dryer, and oven.  Just for the sake of argument, lets also pretend that I don't have a family of four who uses the clothes dryer all the time, and I don't use the oven all the time.  We'll pretend that I spend the full $12 / month just  to keep a 50 gallon tank of water hot all the time.

Fuel savings

If I save 25%, I'll save $3/month, or $36/year, or $720 over a period of 20 years.  My standard 50 gallon water heater has a 12 year warranty, and so does the tankless water heater I looked at... but the life expectancy for a tankless water heater is apparently 20 years, so I'll give it the benefit of the doubt and assume it will last that long.

Sizing a tankless water heater

The brochure on tankless water heaters said I should buy the largest tankless water heater they make, based on the number of bathrooms I have in my house - three.   The particular model is the ECOH200DVN.  This unit boasts a 9.5 gallon per minute flow rate at a 35 degree rise in temperature.  With an average ground water temperature of 45 degrees here in Minnesota, that would give me... 80 degree water.  Ha!  That's useless.  To get 120 degree water, my flow rate would be reduced to 5.1 gallons per minute.  Maybe I'll need two water heaters. For the sake of argument, lets just say I only need one.  This unit retails at my local Home Depot for $1,427.00.

Installation costs

Plumbers charge a lot more money to install tankless water heaters, because they're a lot more work compared to traditional storage tank water heaters.  The water supply pipes will need to be re-routed, the venting will need to be completely redone, the unit will need to be mounted on a wall, an electrical outlet may need to be added, and the gas pipe may need to be re-done.  Just for fun, let's say you were able to find a plumber to do all of this for $1,000.   A traditional water heater might cost up to $500 in labor for replacement, so we'll assume you're only spending an extra $500 in labor for a tankless water heater.

The bottom line

A traditional 50 gallon water heater with a 12 year warranty retails for $559 at my local Home Depot.   I would spend an extra $868 to buy a tankless water heater, and at least an extra $500 in installation costs, making this unit cost at least $1,368 more than a traditional water heater.  I would spend at least $1,368 for the potential of saving $720 over a period of 20 years.  If I ever buy a tankless water heater, I won't be doing it because I'm hoping to save money.

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Reuben Saltzman, Structure Tech Home Inspections


Comment balloon 116 commentsReuben Saltzman • October 18 2011 06:00AM


Interesting...we knew about the expense,...didn't know about the "efficiency".

Posted by Sally K. & David L. Hanson, WI Realtors - Luxury - Divorce (EXP Realty 414-525-0563) about 7 years ago

Reuben: For the "potential" savings of $720 over 20 years, the investment doesn't work. Have they dropped in price at all since they were intorduced? Is the technology really that much more expensive?

Posted by Anne M. Costello (Weidel Realtors) about 7 years ago

Reuben, i have a Rinnai i have had for over a year and it delivers well but i would never had invested the money unless i got $1500 back in tax credits, state credits and electric credits to make it dollar wise worth it.  No issues with the temperature of water here...the only thing you can't do is dribble the hot water because it just doesn't turn the tankless heater need to run the faucet well...good share

Posted by Ginny Gorman, Homes for Sale in North Kingstown RI and beyond (RI Real Estate Services ~ 401-529-7849~ RI Waterfront Real Estate) about 7 years ago

Hi Reuben.  Great post.  I was thinking about a tankless until I read this.  Good info.

Posted by Bob Miller, The Ocala Dream Team (Keller Williams Cornerstone Realty) about 7 years ago

Interesting info. I also have been looking to replace my water heater with a tankless model. Maybe I'll rethink that.

Posted by Maureen Fukumoto, Maureen (Help-U-Sell Realty Pro) about 7 years ago

Oy, thanks for doing so much research - I too was "considering" a tankless when it came time to replace my tank.  Now, not so much.

Posted by Marjorie Taylor, New Homes in St. Augustine Florida (Riverside Homes) about 7 years ago

What a fantastic blog on a tankless water heater.  I was considering a change over to one and I appreciate your detailed analysis of the economics of the tankless.  Thanks Reuben.

Posted by Brin Realty Associates Team At Bean Group, Amherst NH homes and Southern NH real estate (Bean Group | Brin Realty Associates) about 7 years ago

Good research; I was under the impression that tankless were the way to go in the future.  I had not researched it in depth.

Posted by Carol Zingone, Global Realtor in Jax Beach, FL - ABR, CRS, CIPS (Berkshire Hathaway Home Services Florida Network Realty) about 7 years ago
I have been told the energy savings are disappointing along with disappointing results.....
Posted by Wayne Long, Homes for Sale In Fort Benning Ga (Columbus Ga Real Estate, LLC - Fort Benning - Phenix City ) about 7 years ago

Reuben-I work with a very green builder and they refuse to put in the tank-less because of the maintenance involved. Instead went with the A.O. Smith. Good job. 

Posted by Adrian Willanger, Profit from my two decades of experience (206 909-7536 about 7 years ago

I used to work for a commercial plumber. He never recommended tankless water heaters to anyone.

Posted by Jackie Connelly-Fornuff, "Moving at The Speed of YOU!" (Douglas Elliman Real Estate in Babylon NY) about 7 years ago

Interesting take on this subject.  I am sure most people would never even think about the efficiency end of it.

Posted by Bob Zorechak - ABR, GRI, e-PRO, Sells Homes in Morris/Somerset/Hunterdon Cos., NJ (Keller Williams Realty Metropolitan) about 7 years ago

Thanks for all the information on tankless water heaters, as I've always wondered what the benefit was as opposed to the cost.

Posted by Carlotta Remong (Berkshire Hathaway HS N.E. Prime Properties) about 7 years ago

Excellent post. I always thought gee, my boiler mate is maintaining a temperature for a shower I won't take for another 24 hours every time I step out, towel off and zip to work after throwing on some threads.

Posted by Andrew Mooers | 207.532.6573, Northern Maine Real Estate-Aroostook County Broker (MOOERS REALTY) about 7 years ago

Very interesting set of statistics and not what I expected.

Posted by Kathy Sheehan, Senior Loan Officer (Bay Equity, LLC 770-634-4021) about 7 years ago

Ha!  Nice Reuben.  I think this is pretty typical of most "green" tech.  It just does not make sense when compared straight across and will only be used with huge government subsidies.

Posted by Jim Allhiser, Salem, Oregon Home Inspector (Perfection Inspection, Inc.) about 7 years ago

Thank you for this post - great information to know.  Helps me look smart!! :)

Posted by Joy Daniels (Joy Daniels Real Estate Group, Ltd.) about 7 years ago

Thanks, Reuben.  I've tossed this idea around for years, and now it might just be time to toss it out!  Good info!!

Posted by Mike Cooper, Your Winchester, VA Real Estate Sales Pro (Cornerstone Business Group Inc) about 7 years ago

Good article.

Or plumber advised us not to get one for similar reasons.

However, I do think they are great for vacation homes. 

Posted by Keith Lawrence, ABR, CDPE, SFR, 203K Specialist (RE/MAX Properties) about 7 years ago

Very nice explanation.  Also, if you live in an area where severe weather or natural disaster preprations are prudent (hurricane, tonado, earthquake etc. ) with the danger of your water supply being interrupted and you fill up the bathtubs, wash machine, etc to use them as temporary water storage units --- a 60 gal hot water heater retains/stores 60 gallons vs. a tankless --- Nada.   Enjoyed the post, thanks.

Posted by Judith Sinnard, The SMARTePLAN Lady (SMARTePLANS; Houston, Texas) about 7 years ago

Reuben, I would have expected a better ROI with a tankless hot water heater. I don't feel so bad now about not buying one now when I had to replace my hot water heater a couple of years ago. Thanks for the analysis.

Posted by Michael Setunsky, Your Commercial Real Estate Link to Northern VA about 7 years ago

How about the fact you never run out of hot water? That's one of the reasons I bought a tankless. I used to run out of hot water all the time. If I wanted to run the washer, the dishwasher and the bathtub, I couldn't do it. Not to mention the fact I will never have to worry about my hot water heater leaking or flooding my house.

There are more reasons to pay 3 times as much for a tankless over a regular water heater than proposed energy savings.

Tankless water heaters are used all over Europe, and have been for decades. We in the U.S. are often a few steps behind.

Posted by Elizabeth Weintraub Sacramento Real Estate Agent, Top 1% of Lyon Agents, Put 40 years of experience to work for you (Lyon Real Estate) about 7 years ago

Great analysis, Reuben!  I've felt the tease of tankless waters for years, too. In my situation (I don't need unlimited hot water), the pluses certainly don't outweigh the minuses. Not even close.
Thanks for putting it all together.

Posted by Bruce Kunz, REALTOR®, Brick & Howell NJ Homes for Sale (C21 Solid Gold Realty, Brick, NJ, 732-920-2100) about 7 years ago

On an pure return on investment analysis, a Tankless water heater may not be the best choice but there are other very valid reasons to consider one.  First, as Elizabeth already mentioned, the ability to run the dishwasher, do the laundry and bath the kids before bedtime without running out of hot water is wonderful.  Second, replacing a standard hot water heater in an older home with a Tankless often allows for re-utlization of wasted space.  In a recent Renovation transaction, installing a Tankless allowed just enough room to create a dedicated laundry room.  Definitely worth the extra money in that case.

Posted by Wendy Cutrufelli, Contra Costa Realtor (Alain Pinel Realtors) about 7 years ago

Ruben thanks for the clear and easily understood breakdown of the costs involved.  I need to figure out the differences for some electric water heaters as well.

Posted by Gabe Sanders, Stuart Florida Real Estate (Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales) about 7 years ago

kinda like the environmental impact of the Prius... saving gas/money/enviroment... until you factor in the enviromental cost of where they're manufactured, the horrible chemicals used in the creation of the batteries and their disposal.  Hardly environmental at al..

Posted by Alan May, Helping you find your way home. (Coldwell Banker Residential) about 7 years ago

Always good to know about these things.  I have only heard the accolades about these so it is great to get the flip side.

Posted by Paula McDonald, Magnolia Realty ~ Granbury, TX 936-203-0279 (Magnolia Realty ~ Granbury) about 7 years ago

It all comes down to the dollars ultimately.  Don't know about the service costs when they do break down but I bet the tankless will cost more. Guess it is the price you pay for "instant hot water."

Posted by Gary L. Waters Broker Associate, Bucci Realty, Fifteen Years Experience in Brevard County (Bucci Realty, Inc.) about 7 years ago

I'm trying to figure out how you got your nat gas bill down to $2.80 a week.  Has your meter been checked lately?

Posted by Mike Carlier, More opinions than you want to hear about. about 7 years ago

Thanks Reuben! I've always wondered about the payback for purchasing a tankless water heater, cost doesn't always equal value. Even if your numbers are off by half it still doesn't make sense.

Posted by Michael S. Bolton, MN Appraiser (Michael S. Bolton,Inc.) about 7 years ago

Come on you all  . . . there's something to be said for being sexy. And saving some space. There are many applications that space is everything.

Posted by Charlie Dresen, Steamboat Springs, CO e-Pro (Steamboat Sotheby's International Realty) about 7 years ago

Does having one increase the desirability of the home to buyers?  Any comments on how it may have "helped" the sale?  Any of your buyers have it on their "list" -- ie are they popular enough and/or desirable enough that they are starting to be sought by buyers ... much like they may say "I want hardwood floors". I can tell you in Houston they are showing up a lot in new construction -- builders are putting them in; but can't say I've seen a lot of homes retrofitted with them.

Posted by Judith Sinnard, The SMARTePLAN Lady (SMARTePLANS; Houston, Texas) about 7 years ago

Hi Reuben - Thanks for your effort on this one. That's excellent information for sharing with clients, well researched and presented.

Posted by Dick Greenberg, Northern Colorado Residential Real Estate (New Paradigm Partners LLC) about 7 years ago

Hi Reuben,  Yikes,  had no idea the numbers were so lopsided against the tankless heater !  Well done !

Posted by Bill Gillhespy, Fort Myers Beach Realtor, Fort Myers Beach Agent - Homes & Condos (16 Sunview Blvd) about 7 years ago

My home is a combo of both gas & electric and when I get the bill every month I am always surprised at the cost for electricity. Natural gas is a fraction of the cost. You post breaks down the monthly cost, and it just does not make dollars and cents to go tank-less.

Posted by Lorraine or Loretta Kratz, Certified Negotiation Consultants (Crescent Moon Realty, Inc. & Land N Sea Auctions.) about 7 years ago

Your post effectively explains why there isn't a run to install these things...It has always captured my attention and now I feel a sense of empowerment based on having further knowledge of this ...good one

Posted by Richie Alan Naggar, agent & author (people first...then business Ran Right Realty ) about 7 years ago

I have heard the same thing.  The only benefit seems to be if you're lacking the space for a traditional water heater.

Posted by Justin Dibbs, REALTOR® - Ashburn Virginia Homes for Sale (Pearson Smith Realty) about 7 years ago

So in other words, no TANK you!  :)

Cool post, Reuben! Thanks for the contribution!

Posted by Curt Warner, Kirkland, Washington. You'll love it here. about 7 years ago

Reuben, your math works for now.  When natural gas prices increase, and they will, the equation will be different.  On a purely money savings basis, a tankless water solution might not be economical... but on a global resource basis (with finite natural gas) there is a stronger argument.  Perhaps we need government incentives to help turn the tide and save our dwindling resources

Posted by Chris Smith, South Simcoe, Caledon, King, Orangeville Real Esta (Re/Max Chay Realty Inc., Brokerage) about 7 years ago

Thanks for the great analysis Reuben. Financially it doesn't seem to make sense. There are other reasons that may make it desirable, but every situation is different.

Posted by John M. Scott, Broker / Owner San Francisco Bay Area (BRE # 01442690, Scott Keys Properties) about 7 years ago

Thanks for the information Reuben.  I have a Boiler Mate 41 gallon tank and have never run out of hot water while running all of my appliances at once.  Plus, it has a lifetime warranty. Tankless is overrated and not worth the investment. I'm against goverment "incentives" to push this technology on us. Let the free market rule.

Posted by Kim Gero, Associate Broker, REALTOR® (West USA Realty) about 7 years ago

Well, Reuben, you have certainly burst my bubble. I was contemplating a purchase of one. Good information.      

Posted by Sandy Acevedo, RE/MAX Masters, Inland Empire Homes for Sale (951-290-8588) about 7 years ago

Thanks for that perspective, really.  I had this same conversation with someone the other day.  Now I understand completely once you broke it all down.

Posted by Morris Massre, Real Estate Instructor Broward County Florida about 7 years ago

Ruben - great post about tankless. I always wonder if it was worth it. More and more builder are doing that here in TX. I hope they are truly energy and money saving as they claim it to be.

Posted by Mike Yeo (3:16 team REALTY) about 7 years ago

Nice analysis.  The only place I have ever specified a tankless water heater is for a point of use heaer in a commercial bathroom in an office building for washing hands.  That is the only place  they make sense.

I know someone here that used to turn the water heater off during the summer and used it as a cold water storage tank and used the tap water as the hot water.

Posted by Loren Green, Phoenix Home Inspector & Designer (Greens Home Design L.L.C.) about 7 years ago

Wow who da thunk it the way everyone has been talking up the tankless models !!! Thanks

Posted by Michael J. Perry, Lancaster, PA Relo Specialist (KW Elite ) about 7 years ago

you're right, they're usually better utilized in more moderate climes and they are tough to retrofit, if even possible at all. I looked at doing this in my 1968 built home and it wasn't worthwhile after looking at all the costs included and the hassle.

Posted by Reba Haas, Team Reba, CDPE (Team Reba of RE/MAX Metro Eastside about 7 years ago

Reuben,  I've always wondered about the economy of a tankless system...if this info is all factual...I don't see a tankless system in my future.

Posted by Nick T Pappas, Madison & Huntsville Alabama Real Estate Resource (Assoc. Broker/Broker ABR, CRS, SFR, e-Pro, @Homes Realty Group, @HomesBirmingham & Providence Property Mgmnt, LLC Huntsville AL) about 7 years ago

Great post & you came to the same conclusion that I did about a year ago. The 'big box stores' keep trying to sell these things as the new way to go, the new wave ....  Not for the extra costs & I personally don't consider it 'green'.

Posted by Lyn Sims, Schaumburg IL Real Estate (RE/MAX Suburban) about 7 years ago

I am printing this one out.  I am NO fan of the tankless models.  I had one amny years ago and did NOT care for it.  I really see no savings at all.

Posted by William Feela, Realtor, Whispering Pines Realty 651-674-5999 No. (WHISPERING PINES REALTY) about 7 years ago


Thanks for posting this. That's an expense not a saving. And, that's nice to know. I'll buy one when they get a whole lot cheaper.


Posted by Brian Madigan, LL.B., Broker (RE/MAX West Realty Inc., Brokerage (Toronto)) about 7 years ago

Thank you for the comments, everyone.  I had a very long day yesterday and I have another one today, but I'm looking forward to reading all of the comments very soon, and responding to any questions as soon as possible.

Posted by Reuben Saltzman, Delivering the Unbiased Truth. (Structure Tech Home Inspections) about 7 years ago

kind of reminds me of the organic food debate. I'm no expert, but I heard recently that organic food growers are allowed to use a multitude of different pesticicdes and still call their food organic.....

All these things obviously bear more scrutiny....

Posted by Dan Walker, Specializing in Gated Communities (Walker Realty) about 7 years ago


One factor that you didn't include is the fact that you are able to have natural gas in your house, that is not an option where I live and the electrical costs of running a water heater that has to be on all the time wether you are using it or not compared to an on demand tankless water heater can be substantial.  Also there are a number of manufacturers of tankless heaters and the price varies greatly as well with the gas models topping the price list.  I own a 3/3.5 house and was able to purchase an electric tankless for less than $300 and it is wonderfull, I would not go back.  The only instance I would agree with you is on specific cases where natural gas is available, otherwise it can be a great investment and I think you should add this detail to your post.  Great post though.

Posted by Christian de Almeida about 7 years ago

Reuban - unless you are doing it for the environment regardless of cost there are two scenarios where it would make sense to install one ..... when government rebates are available or when building a new home

Posted by Kathy Clulow, Trusted For Experience - Respected For Results (RE/MAX All-Stars Realty Inc. Brokerage) about 7 years ago
Kind of reminds me of the all in one washer and dryer machine! If space is that much of an issue, then you will give up something else, time, money, etc. Still the marketing machine cranks out "new and improved" all the time!
Posted by Lou Muscarella about 7 years ago

Great information.  I am grateful that you did the math for us.  Tangentially, for people who want a solar hot water system, you will have to have a tank.

Posted by Bob Willis, Orange County & L.A. County Real Estate Agent (Berkshire Hathaway HomeServices California Properties) about 7 years ago

Thanks for posting this.  It definitely is good information and I will be sharing it with my clients.

Posted by Tina Beasley, It's not about me...It's all about you! (Florida Homes Realty & Mortgage, LLC) about 7 years ago

I think it's just a matter of time till the prices come down to match standard water heaters. The first pioneers of any technology never seem to get a savings benefit. But maybe someday...

Posted by The Derrick Team - Indy Metro Realtors, Your Pet Friendly Realtors (Carpenter Realtors) about 7 years ago

Hi Rueben, Your blog has given me something to think about!  With all the replies it gives a well rounded view

of the Tankless Water Heater!  Having owned a fire and flood damage business, those tank water heaters

have made me alot of money!  I definitely would not rule out a tankless water heater, but would consider

the cost of retrofitting and the cost of the unit!  Good information!  Congratulations on the Feature! 

Carefree Marilyn

Posted by Marilyn Montaigne (Options and Opportunities ) about 7 years ago

Wow, and I was looking forward to installing one next year!  I'll have to rethink that . . .

Posted by Kate Akerly, Manhattan Beach Residential Sales (Kaminsky Group) about 7 years ago

Excellent illustration and analysis, thank you for the information.

Posted by Kimo Jarrett, Pro Lifestyle Solutions (WikiWiki Realty) about 7 years ago

Reuben, Great post and you hit it on the money. Unless space is the driving factor a tankless does not make sense. In my area we have the same ground water temp issue. Couple that with the cost of gas is much more expensive than electricity it really puts a bite in the cost savings.

The other thing you did not mention they are kind of noisy. Much more so than a regular water heater.

Posted by Donald Hester, NCW Home Inspections, LLC (NCW Home Inspections, LLC) about 7 years ago

Tankless water heaters are big in our area.  Many of our homes are very small older craftsmen and the tankless water heater frees up space.  Our home inspectors say the same thing as you - if you're getting one to save money, it just won't happen in a timely fashion.  Also the issue of needing to turn on the water full blast to get the water heater to switch on is a problem as you can end up wasting water.

Posted by Ann Wilkins, Oakland, Berkeley, Piedmont CA (Golden Gate Sotheby's International Realty) about 7 years ago

Reuben, great job on the post - putting out the facts and dollars.  As many have said, there MAY be a reason for a specific home.  But, it does pay to do the homework. 

Posted by Juli Vosmik, Scottsdale/Cave Creek, AZ real estate 480-710-0739 (Dominion Fine Properties) about 7 years ago

I think you can use this same logic when dealing with customers who want to replace their oil heating with gas heating because the local provider is offering incentives to switch energy sources.  Sure, natural gas may be cheaper than heating oil, but how many years would it take to break even after paying to replace the systems and disposal of the oil tank?

Posted by Martin Kalisker, Professional Standards & Legal Assistant (Greater Boston Association of REALTORS) about 7 years ago

In the case of tankless heaters powered by electric, the biggest problem comes when too many homeowners in a neighborhood install these units. The increased loads at peak usage times may exceed the capacity of the neighborhoods electrical system causing lights to flicker and other power problems. After receiving complaints, the utility company responds by evaluating where the increaded loads are originating and asks the homeowners to voluntarily remove the equipment. If the owners refuse or fail to act, the utility company is generally forced to upgrade the electrical system. In many areas utility regulations allow the utility customers who are responsible for the increaded load to be billed for the facilities upgrades.

Posted by Michael Smith (Michael Smith (Homexpo Realty)) about 7 years ago

My "other business" is housecleaning.  Tankless water heaters sound great ( I am a Green Realtor and have several other green designations) but they often waste water while "warming up". Meaning that you have to let the water run for some extra time before the hot water shows up.  This is not green!  My take on tankless water heaters is that they are best in a well integrated system done in new construction or during a down to the studs remodel.  AND  with a knowledgable well trained expert in green building.

Thanks for the great post :-)



Posted by Muriel Lawty (Keller Williams Downtown Seattle) about 7 years ago

hi, Reuben:

Perhaps a topic for your next blog would be a look at the [supposed] energy efficiency of the tankless heater vs a traditional tank heater?  Just a thought!

Michael @ The Stage Coach

Posted by Michael Fontana, @ The Stage Coach (Round Rock Home Stager Austin Home Staging) about 7 years ago

I consider myself "Green", and I am also a very good money manager (my Xwife called it cheap).

Several times over the years I have researched this and tried to justify installing a tankless WH. Each time I go through all the considerations, including efficiency, environmental and cost analysis, I come back to the same conclusion: I can't justify it. I am committed to green enough that I might even pay a little extra, but in this case, I can't make it pencil out any way I look at it.

These conclusions are even more significant where I live with no natural gas. That leaves only propane or electric. Niether are viable for an on demand heater. I really wish I could convince myself, because the extra room would be nice in my little 850 sq. ft. house...But I just can't.

Posted by Brent, Brentwood Inspections about 7 years ago

I go through this same thought process with cars that get about twice as many miles per gallon as the one I currently have.  If it costs $10,000 more to buy than what I would otherwise have chosen, will I save any money?  Nada.  This is the problem with green industry. I'd like to use less energy, but can't afford it!

Posted by Joetta Fort, Independent Broker, Homes Denver to Boulder (The DiGiorgio Group) about 7 years ago

Back in the early 80"s, I installed a tankless heater in the home I was rehabbing in Chicago.  Loved it.  As far as price - scale is the key to all price modelling.

The other "green" effect is landfill consideration.  Between the size and shorter shelf life of traditional water heaters, my guess is that we could have a huge impact on solid waste space over just 50 years of home ownership if we converted to tankless.

Posted by Jeanne Dufort, Madison and Lake Oconee GA (Coldwell Banker Lake Country) about 7 years ago

I have installed Rinnai tankless water heaters in every spec home I've built since 2004. Not one single complaint. I installed a Rinnai in my home in 2008. My gas appliances are the Rinnai, two furnaces heating 4,500 sq ft, clothes dryer and cook top. Annual gas cost is under $500.00 The only thing wrong with the Rinnai is I didn't install it earlier.

Posted by Anthony Moretz, REALTOR® (RE/MAX A-Team) about 7 years ago

Another point to add. For some reason, plumbers don't know how to install them. There are gas and venting requirements that are simply being ignored.

Posted by Cynthia Larsen, Independent Broker Serving Sonoma County, CA (Safe Haven Realty) about 7 years ago

   I agree, without the tax credits it would not pay for itself as you suggest.

Posted by Carol Babington about 7 years ago

I really want to invest in a tankless water heater.  I also would love an electric car.  Unfortunately neither of these options make economic sense YET but I hope that at some point in the future we find a way to be able to move to both.

Posted by Michael J. O'Connor, Eastvale - 951-847-4883 (Diamond Ridge Realty) about 7 years ago

I was just reading up on these last night and pretty much came to the same conclusion. Thank you for sharing.

Posted by Jeff Lorenzen, Park City Real Estate (Keller Williams Park City Real Estate - Park City, UT) about 7 years ago

Thank you for breaking it down like that. The only advantage a tankless waterheater has, in my opinion, is saving space in tight quarters. You have just furnished the data I needed to confirm what I thought all along.

Posted by Sylvia Jonathan, Broker Associate, SFR (Coldwell Banker Platinum Properties) about 7 years ago

These economics are very true of many "Green" things.  I suspect the actual numbers are even worse and often Green is only Green in what it provides to those with the right connections.

Posted by Gene Riemenschneider, Turning Houses into Homes (Home Point Real Estate) about 7 years ago


     You are right the return on investment is not there, however, I installed a Rennai 4 years ago

and I love it. They can be mounted outside and save room in the utility room and you don't

ever have to worry about it leaking inside the home and causing damage.

Posted by David DiRienzo about 7 years ago


As an EcoBroker, I thoroughly appreciated your research!  I've heard that tankless isn't any better and costs more $.  Did you factor in any rebates or credits?  I've also wondered about solar hot water heaters.  Have you done any research on them?

Posted by Jan Green, HomeSmart Elite Group, REALTOR®, EcoBroker, GREEN (Value Added Service, 602-620-2699) about 7 years ago

I did this same type of analysis when I was thinking about buying a hybrid car and after crunching the numbers I could not justify the additional expense. In the end it's not as much about saving money as it is saving the environment.   

Posted by Anonymous about 7 years ago

There is an easy, very low cost solution for avoiding floor damage due to leaking tanks: It's called a floor pan drained to the exterior.

It's true that if you choose an electric on demand WH, it puts a huge increase on the electrical grid system as well as your house system. It will probably require installing at least an additional 200 amps of service capacity just to operate an electric tankless. Most modern homes only use 200 amps for the entire house. This could easily cost an additional $2000 to $3000 or more, just for the upgraded service: Can not be justified.

I installed a roof top solar system with two 3x8 foot collector panels in the early 90s. It has been difficult to track the exact savings, but I think the payback took several years even with a large tax credit incentive.


Posted by Brent, Brentwood Inspections about 7 years ago

Dead on.  Last year I installed a high quality, concentric vent unit.  Plumber quotes were all over $4000.  I installed it myself with the help of a plumber for the final connections (and cutting a new gas line) at a total cost just under $3000.  I didn't do it for cost savings, although I am saving more than $3/mo.  The very strong positive is endless hot water for showers (NICE).  On the other hand, due to the very long wait (30 sec) for hot water at the sink when it hasn't been used in a while, I wash my hands with cold water.  This is probably contributing to my additional savings.  Another thing to note, if you have hard water the systems require descaling once or twice a year.  This requires a pump and is made easier with isolation valves (another expense).  If you're not handy, hiring someone to do this adds expense and nulifies the savings.

Posted by Rafi Footerman, Home Inspector, Mold Inspector, Radon and More! (Mid Jersey Inspections) about 7 years ago

Reuben - I love seeing things broken down this way.  From a cost perspective, it would probably be wise to wait a few years to invest in this technology as a replacement for an existing tank system.  I'm sure it will come down in price.  However, if I were investing in new construction, I would put in a tankless system.  Financed out over a 20 year mortgage this would only add $9 to your payment.

Posted by Brad Baylor (ERA Coup Agency) about 7 years ago

I have myself, my husband, 2 adult kids and a grandkid living under one roof and we have yet to run out of hot water with our regular tank.  I've also been interested in tankless, but the math isn't working yet.  Thanks for the research!

Posted by Judy Orr, SW & Near West Chicago suburbs (HomeSmart Realty Group) about 7 years ago

Jeanne, #74:

Scrap metal recycling is one of the most recyclable products. Most metals
only have to be melted down and then reformed into other products, making
its life cycle potentially endless. Recycling makes a substantial saving on
landfill space requirements and it helps conserve the world’s resources.
To take steel as an example, melting down one ton of recycled steel cans
uses only 25% of the energy needed to melt enough ingredients to make one
ton of all-new steel. Using old steel to make new steel also preserves
energy and resources. For every ton of scrap steel recycled, around 1.5
tons of iron ore, one ton of coke and half a ton of limestone are saved.

My socially conscious, green side still believes that even with all the arguments against tankless and other eco-friendly technologies, there are still good reasons to consider them and that this is what we, as a wasteful, consumer driven society need to be developing. Most natural resource are finite and getting more difficult to find and more expensive to use. 

Posted by Brent, Brentwood Inspections about 7 years ago

What great information!  I don't know much about tankless water heaters so I appreciate you sharing!

Posted by Patricia Beck, Colorado Springs Realty (RE/MAX Properties, Inc., GRI, CDPE) about 7 years ago





Posted by Larry and Marilyn Mennetti (FIVE STAR REAL ESTATE) about 7 years ago

Lets not forget the rebates and credits from the taxpayers. (THANK YOU TAXPAYERS)

Posted by Jayson Holland, Jay Holland ( about 7 years ago

The first time I encountered a tank less water heater was in Holland. Some friends owner a typical Dutch three story row house. Mother moved into third floor where there was only cold water plumbing to serve the bath and kitchen so a tank less electric made great sense and was not particularly expensive.

It seems to me that many of the green ideas and other "money saving" ideas really don't save anything at all. Most of us do not do what you did for the tank less example. Try the same type calculations on high efficiency multipane windows or blow in foam insulation.

Posted by Marshall Brown, BSEE, CHI (Mid America Inspection Services, LLC) about 7 years ago

Your preaching to the choir here Ruebs. I'm converting muy heating system to gas with an indirect storge tank water heater. In my opinion a way better option.

Posted by James Quarello, Connecticut Home Inspector (JRV Home Inspection Services, LLC) about 7 years ago

I have traditional electric water heaters (2) on timers with 4 preset off/on cycles daily.  I also have a natural gas line that was laid in our neighbor hood a few years back that I could hook up to if I desired to change.  My thinking has been when the next tank needed to be replaced, I would switch to natural gas.  But with the cost of connecting to the gas line and retofitting my house added to what you have described, I will have to re-evaluate.

Posted by Steven Pahl, Real Estate Consultant Tampa, FL 813-319-6423 (Keller Williams Tampa Properties) about 7 years ago

I had a tankless water heater installed as soon as we moved into our current home.  I have a busy household, using water frequently for shoowers, to run the dishwashers, clothes washer, filling the jacuzzi tub.  A tankless water heater is a necessity for us.  A 50 gallon water heater is not enough.

Posted by Arlene Garcia Hanner, ( / Arlene Garcia Hanner, Broker) about 7 years ago


My experiences with gas Rinnai's are very good. I'm have installed 3 of them now. 1 on my home and 2 on my apartment buildings. I have even installed an electric tankless - not happy with it and after 3 years of use, I took it out. Back to the gas tankless. It saves me $$$ and space. My numbers are much different than yours. On my home, I spent $1,100 for an installed Rinnai, with some modifications on plumbing/gas. I did get a $450 rebate from my gas company, no federal credit at the time. My $15 monthly bill includes a gas stove. The extra room in my laundry room is priceless, as my tankless is now outside wall mounted. I have NEVER had any problems with these units, and that includes from my happy tenants. I know they save me money on my apartment builldings. I don't have #'s to prove this, as they has been installed for 6 years now. I have 2 more conventional gas HWH's, that I plan on changing out to Rinnia's. I live in Florida, maybe things are different with prices and savings #'s. Sorry, I don't agree with your post but, my experiences are 1st hand, and I do and have recommended them to my fellow landlord and neighbors. They are happy too.

Posted by Scott Bellefleur about 7 years ago

Good info. I probably talk people out of buying a tankless water heater 75% of the time. Now, if the gas meter, a bathroom and the (outdoor) tankless water heater are within 10-feet of eachother - that will usually work better than a tank type water heater.

I am enjoying the weather here on the left coast. Terms I am not familiar with: ice dam, frost level and snow shovels. 8)

Posted by Joe Nernberg (AmeriSpec Inspection Services) about 7 years ago

So what you are saying is I should by a USED house with a tankless water heater, that would be okay, right?  I'd get the saving and "green status" without the costs? :-) Kasey

Posted by Kasey & John Boles, Boise & Meridian, ID Ada/Canyon/Gem/Boise Counties (Jon Gosche Real Estate, LLC - about 7 years ago

This is a great post.  I have heard many plumbers echo your sentiments about tankless hot water heaters.

Posted by Sharon Parisi, Dallas Homes (United Real Estate Dallas ) about 7 years ago

the truth hurts the pocketbook

Posted by Brian Schulte, SFR, Sierra Vista, AZ (Allison James Estates & Homes) about 7 years ago

They are more for convenience 

Posted by Michael Singh,Broker (Singh Real Estate) about 7 years ago

For real 'green' savings, unless you need the space, use a gravity fed backwash water softener on your feedwater into your regular tanked water heater, place a programmable thermostat on the tank electrical supply to turn it down or off when not using it for several hours or are going on vacation or weekend away, wrap your tank with pink fible insulation batts.  Money saving and longevity of equipment will be significant.  From your cold northern neighbour.  (don't know the comparison stats, but would bet these items would win the contest, hands down!)  Oh, I forgot to add, insul-wrap your exposed hot water lines (split wrap available at your building supply store).

Posted by Ken Anderson, Broker in Burlington, Ontario (Apex Results Realty Inc., Brokerage) about 7 years ago

Our experience has been a bit different. Average $15/month reduction in the gas bill for a household of 4, using a lot of water. Never running out of hot water is a big plus. Also, we gained storage space, and don't have to worry about it dumping 40-50 gallons of water on the floor like the old one did... It does save us money but I would do it again even if it was a break-even deal. 

Posted by Jan Stevens (Coldwell Banker Pittsburgh) about 7 years ago


Your information clarifies my thinking about buying a tankless water heater.  I may still buy one, but at least I have more facts than those provided by the tankless water heater people. 

Posted by Evelyn Kennedy, Alameda, Real Estate, Alameda, CA (Alain Pinel Realtors) about 7 years ago

I'll try to answer any questions.

Anne C - Yes, the price of tankless water heaters has come down a bit, but not significantly.  I'm hoping that by the time I need a new water... say in 10 years or so, they'll make more sense. 

Ginny - $1500 in tax credits?  Wow.  That makes it worthwhile.

Elizabeth - I wrote about my solution to running out of hot water here - . 

Wendy (and Elizabeth) - You're right, there are more reasons to buy a water heater than just money savings.  I'm thinking I should write a follow-up post discussing a few more pros and cons.

EJ - don't worry, I do pay more than $2.80 a week, but a lot of those fees are things like "delivery charges'... things that don't fluctuate based on my gas usage.  I have no plans on getting my meter checked though :)

Posted by Reuben Saltzman, Delivering the Unbiased Truth. (Structure Tech Home Inspections) about 7 years ago

Charlie D - the 'sexy' factor is almost enough to make me buy a tankless water heater, despite the extra money.

Chris S - good point.  In ten, maybe even five years, tankless water heaters might make a lot more sense.

Christian - the only tankless electric water heater I've seen had three 40 amp, 240 volt circuits feeding it.  I wonder what the cost of that installation was?  Is yours similar?

Marilyn - You have good reasons to really appreciate traditional water heaters.

Donald - good point about the noise factor.

Posted by Reuben Saltzman, Delivering the Unbiased Truth. (Structure Tech Home Inspections) about 7 years ago

Ann W - on one of my outside blogs, someone commented that they have to run the bathroom sink faucet on hot the entire time they're taking a shower just to get the water heater to run.  Can you imagine?

Michael Smith - interesting point about electric water heaters putting a strain on the grid.  I never would have even thought about that.

Michael - F - not a bad idea.  Thanks.

Anthony - I'm glad to hear you've been happy with your tankless.  Despite the numbers, I still want one... I'm the person who loves to show off their mechanicals.

David DiRienzo - the 'outside' installations aren't an option for us here in MN :)

Posted by Reuben Saltzman, Delivering the Unbiased Truth. (Structure Tech Home Inspections) about 7 years ago

Jan Green - no, I didn't factor in any rebates or tax credits.  As far as solar, I've heard too many negative things about what to do with old solar panels to even consider them.

Rafi - good points to bring up. I may mention those in a follow up blog.

Larry - I'll see if I can get my wife to do that ;)

Marshall - I'm about to have all of the fiberglass insulation in my unfinished basement pulled out, and spray foam installed on the wall.  I'm not even going to try calculating the savings, because they probably won't make sense... but my basement will be much more comfortable.

What's the payback period on the new sofa?

James - I'm jealous.

Posted by Reuben Saltzman, Delivering the Unbiased Truth. (Structure Tech Home Inspections) about 7 years ago

Scott - I've heard nothing but good things about the Rinnai units.  Thanks for sharing your experiences - I'll check out the Rinnai units next time.

Joe Nernberg - stick a cork in it!  Ha ha.  You're lucky to not know about those terms :)

Kasey and John - absolutely!

Ken - good tips.  I'm not a fan of insulating the water heaters... but some day I'll do some hard research on that topic.


Posted by Reuben Saltzman, Delivering the Unbiased Truth. (Structure Tech Home Inspections) about 7 years ago

There is an old saying, "beauty knows no pain."  I put a tankless hot water heater in the category of experiencing the luxury of a long hot shower with no pain of expiration of hot water.  I sold a townhome with one and it was an attractive feature making the townhome more marketable.  Your post is a very good one.  It relates to, "luxury ignores all costs?"  LOL

Posted by dale taylor about 7 years ago

Reubs, Here's a photo to get your heart pumping :) As you can see it's not installed yet. This is being plumbed to a new high efficiency boiler (95%). Here's the spec sheet. As you can see they use a more realistic inlet temp., at least for my region. 

Posted by James Quarello, Connecticut Home Inspector (JRV Home Inspection Services, LLC) about 7 years ago

Dale - great point, and you're right.

James - wow, that's pretty sweet.  I'm sure you're going to be happy with it!

Posted by Reuben Saltzman, Delivering the Unbiased Truth. (Structure Tech Home Inspections) about 7 years ago

Good morning Reuben,

Thank you for the analysis on the tankless water heater. Unless you are getting rebates I see no reason to make the investment. Congrats on the feature..well deserved!

Posted by Dorie Dillard CRS GRI ABR, Serving Buyers & Sellers in NW Austin Real Estate (Coldwell Banker United Realtors® ~ 512.346.1799) about 7 years ago

I looked at replacing my hot water system about 18 months ago and the tankless was on the list.  Unfortunately it didn't make the cut.  I ended up putting in a solar hotwater system that saves our 3500 sq ft home about $60 a month.  With those saving and the federal and state tax credits the system will pay for itself in less than 5 years!

Posted by Gene Donohue, Flat Fee Service...Exceptional Results! (Only Way Realty / about 7 years ago

This is really informative for anyone looking into tankless water heaters. They are all the rage right now, but they definitely need to be researched to see if they are right for each person.

Posted by Sylvie Stuart, Home Buying, Home Selling and Investment - Flagsta (Realty One Group Mountain Desert 928-600-2765) over 6 years ago

Great's amazing how many people are not able to do the simple math to see whether something is really going to save them money.  It's like spending $10,000 more for a hybrid car that will save you less than that in gas over the life of the car.  If you love the environment, get one.  If not, probably don't need it.

However, I think the best benefit to a tankless water heater is just NEVER running out of hot water.  I have a 50 gallon water heater, and with 6 people (4 kids), there are times that we still run out. 

Posted by Matt Robinson, (Professional Investors Guild) over 6 years ago

Good points. I take longer showers now so I know I'm not saving any money! The wife wanted one...

Posted by Wayne B. Pruner, Tigard Oregon Homes for Sale, Realtor, GRI (Oregon First) about 6 years ago