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Dec. 4, 2021

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Energy adviser: Pros, cons of ‘tankless’ gas water heaters

The Columbian

Does switching from a storage tank electric water heater to a “tankless” natural gas water heater make sense? What are the trade-offs?

Heating water is the second most expensive energy use in the average Pacific Northwest home. About 16 percent of total energy consumption goes to hot water, while heating interior spaces — where most household energy dollars go — is about 58 percent of consumption.

According to Clark Public Utilities’ energy calculator website, two people living in a 1,200-square-foot, two-bedroom home will pay about $200 a year for hot water. For a family of four living in a 2,000-square-foot, three-bedroom house the cost jumps to $324 a year, or $27 a month.

High-efficiency water heaters can cut those costs by 10 percent to 30 percent, according to energy advisers at the utility. To achieve that savings some homeowners are considering a switch from a traditional storage tank electric water heater to a “tankless” unit that uses natural gas to instantly heat water. But before making the investment — as much as $1,800 — homeowners must make some comparisons and check out the details.

On the plus side

There is a small tax incentive. The 2011 tax law passed by Congress in December allows for a federal tax credit on the purchase of a tankless energy-efficient water heater. The credit this year is worth 10 percent of the total cost up to $500. This incentive expires at the end of the year.

At least one area resident likes her home tankless water heater because of the low energy costs and the fact that she never runs out of hot water. She also likes that her tankless heater, operated with natural gas fed into the home from an outside pipe, takes up very little space.

You can vent horizontally, making for easier installation and placement. And it’s easy to adjust the output temperature of water. Our homeowner sets her temperature at 115 F, which she said is “more than hot enough.” Her cost for hot water in a small two-bedroom, single-story house is about $2 a month. A tankless heater also means less risk of water damage. Storage-tank heaters can leak or rupture in as few as 10 years, and require a metal pan to collect leaks if they are installed in an interior closet or attic space. The only risk of water damage from a tankless unit is from pipe or pipe-fitting failure.

On the negative side

Our homeowner dislikes it that tankless units are mostly limited to gas models. She said there are electric versions, but they take huge draws of electricity.

Area builders say it’s easier to install tankless units in new homes than to retrofit them into existing homes. That’s because the diameter of the gas or propane pipe coming to the unit can affect performance. It’s easier to install the correct pipe in a new home than it is to replace existing pipe. Also, venting the unit to the outside can be a challenge.

Installation costs can be high. According to several Internet home improvement websites, whole-house tankless water heaters typically cost $800 to $1,150, compared with $300 to $480 for the regular storage-tank types. A tankless model needs upgraded gas pipes, a new ventilation system, and electrical outlets for its fan and electronics. This can bring an additional average installation costs to $1,200, compared with $300 for storage-tank models.

Meanwhile, some users complain about the lag-time from when the tankless unit fires up and the hot water reaches the faucet. This can also be a problem with tank-based heaters. Others say when the hot water faucet is turned on and off repeatedly, there are periods of hot and cold water coming through the pipe. This is caused by a one- to three-second delay when water starts flowing and the heater’s flow detector turns on the gas or electric heating elements.

Another negative: Tank-based systems can use solar energy, geothermal energy, natural gas, propane, electricity, and ground-coupled heat exchanger energy. Tankless systems can only use natural gas, propane, or electricity.

As energy costs increase in the U.S., consumers are starting to pay attention to the “stand-by losses” from keeping water continuously hot. To find out more about tankless water heaters go to: and search for tankless water heater information. The U.S. Department of Energy offers information at

The Energy Adviser is written by Clark Public Utilities energy counselors, who provide conservation and energy use information to utility customers. Send questions to or to Energy Adviser, in care of Clark Public Utilities, P.O. Box 8900, Vancouver, WA. 98668.