When debating how best to heat your water, give serious consideration to a gas-fired tankless heater before writing it off as too expensive.

Gas-fired tankless heater. Manufactured by Rinnai.

Tankless water heaters are a highly efficient way of producing domestic hot water. Conventional storage water heaters are inefficient due to standby heat losses. The water tanks are always holding a volume of hot water. It is inevitable that the tank will lose heat, the water will cool down, and the water will need to be reheated. Tankless (also known as on-demand) water heaters only heat water as needed, or “on-demand.” Since they don’t store any water, they do not have the same stand-by heat losses that are associated with storage water heaters.

While conventional tank-based gas heaters transfer between 55-60% of the energy contained in the gas to the water that will leave the tank, tankless water heaters operate at much higher efficiencies. For example, Rinnai tankless water heaters typically operate between 80-85% efficiency. This leads to significant energy and utility bill savings over the course of the year.

The larger Rinnai tankless water heater models are advantageous because they have the capacity to supply domestic hot water for an entire house, even during the winter. In cold climates, the hot water output capacity will typically decrease by 30-50% due to colder incoming water temperatures. The larger Rinnai tankless water heaters have higher than average capacities year-round (10 gpm summer, 6 gpm winter for the R98i).

The disadvantage to tankless water heater is a higher initial investment. However, these costs are usually recouped within 3 years or so. Be ware of electric tankless systems. Though they may be desirable in areas with low electricity costs, they require a high amperage and will easily exceed the amp service for the unit.