How Does A Tankless Water Heater Work?

If your existing water heater has finally given up the ghost after decades of faithful service, or if you’re looking to upgrade for sustainability reasons or to take advantage of state and federal tax credits, a tankless water heater installation has the potential to change the way you live and take your home into the twenty-first century by providing unlimited hot water on demand.  Rather than waiting for an hour or more for a regular tank unit to fill up and heat, a tankless water heater gives you as much hot water as you want, when you want it.

If you’re considering having  a tankless water heater installation in your home, you probably already know that this is going to mean a significant financial commitment.  So what follows here is meant to not only help you get a clearer idea of the cost but also to give you a clearer idea of how a tankless water heater actually works so that you can make the best decision for you and your family.

A tankless water heater: the basics

There are two different kinds of tankless water heaters, point-of-use heaters (sometimes referred to as in-line heaters) and whole-house heaters.  Point-of-use systems are much more common overseas and generally are used to heat only one or two specific outlets.  In most cases, a point-of-use heater would be used to heat the water in one bathroom or one area of the house, with the tankless unit itself being compact enough to be mounted on a wall or in a cabinet.

As their name implies, whole-house heaters are considerably larger and more expensive and are meant to provide unlimited hot water to your entire home, and to multiple outlets at the same time if necessary.  Point-of-use heaters are usually only available in electric models, whereas whole-house heaters are available in propane and natural gas models.

Regardless of the brand and model, both point-of-use and whole-house tankless units make use of a heat exchanger that’s very similar to the one you would find in your air conditioner or refrigerator.  A heat exchanger simply moves heat from one place to another.  In the case of a tankless water heater, the heat exchanger is activated by the flow of incoming water, with the heat exchanger transferring the heat generated by the electric coils or the gas burner to the water flowing through the unit.

Tankless water heater installation costs

Chances are if you’re reading this, you’re probably considering a whole-house unit.  Since most whole-house units run on natural gas, the first question you need to ask yourself is whether or not your house is plumbed for natural gas.  If your home is already plumbed for natural gas, then half the work is already done.  If your home isn’t plumbed for natural gas, you’ll need to contact your local natural gas provider and make arrangements for the installation of a gas line and all of the usual permits, and this alone can cost between $500 to $1500.

But depending on your situation, don’t rule out a point-of-use unit just yet.  If you’re just trying to get a little extra hot water to the jetted bathtub in your master bedroom or to the new shower insert you just installed off of your guest room, an electric point-of-use unit should meet all of your needs at a fraction of the cost of a whole-house unit.  The other advantage to a point-of-use unit is that due to their significantly lower cost versus a whole-home unit, it’s possible to install multiple point-of-use units in different rooms of the same home or to use new point-of-use units in conjunction with a home’s existing tank system.

In terms of cost, an electric point-of-use unit will set you back roughly $150, with higher-end models closer to $250.  A whole-house unit will set you back $1500 to $2500, plus all of the usual installation costs.

It’s also important to note here that the difference in price between a point-of-use unit versus a whole-home unit is most clearly reflected in the scope of the installation.  Most point-of-use units come out of the box with both horizontal and vertical mounting kits included, you just plug them in and they’re ready to go.  Installing a whole-home unit is a bigger job that can take 1-2 full days, and in some cases even longer if your home isn’t plumbed for natural gas.

Your best bet for tankless water heater installation

We know that taking the plunge and upgrading to a tankless water heater is, in most cases, going to require some considerable upfront investment on your part.  If you have any questions or you’re unsure how to move forward, please call Stith Plumbing & HVAC at your earliest convenience.