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Tank vs tankless – the water heater wars

Washington Energy | 06/15/2012 | Posted in Tank water heaters, Tankless water heaters

Tank water heaters

Most homes have standard 40 or 50 gallon tank water heaters. They keep water hot all day and night, ready for your use. Tank water heaters usually last around ten years, during which time even the best of them builds up sediment and a little rust. After ten years of use, don’t be surprised if a little bit of water begins to leak from the bottom signaling a failed tank and the need for a replacement. It is especially important to keep an eye on older tanks that are in the home as a leaky tank can result in water damage or worse. With this in mind it is a good idea to have a general game plan put together for when the time comes to replace your tank water heater.

The first thing you need to investigate is what type of tank you have. There are two main ways your tank heats water: electricity or gas. An electric tank has no venting and is often in a conditioned space (meaning inside your house, not the garage). There are two types of gas water heaters: B-vent and Direct Vent. B-Vent has smaller four inch venting that exhausts into a chimney or ties into another exhaust vent. The direct vent will vent directly to the exterior of the home at a 90 degree angle. Can you identify which one you have?

The electric tank is the least expensive tank to buy. However, it terms of your utility bill, an electric tank will cost you the most to run on a monthly basis. This is because it takes a fair amount of electrical power to heat the water, and electricity costs more than natural gas. We recommend that if you have the ability to get gas to the house that you get a gas water heater which will be a less overall cost to run over the lifetime of the tank.

For gas tanks there are two main efficiencies, the .67 and the .62. That means 62-67% of the fuel they take in is converted into heating. These ratings are the same for both the b-vent tanks and the direct vent tanks. The main difference is that the higher efficiency unit has a vent damper which runs about 500-800 dollars more. This will save you about $20 per month on your natural gas bill at today’s prices. In 2 years, a federal efficiency mandate will require all tanks to be at a .67 efficiency so anyone buying a tank will need this vent damper. In terms of the base cost between the direct vent and the b-vent, the direct vent is the most expensive because of the extra technology used for the exhaust venting.

Tankless water heater

The alternative for homes with gas or propane is a tankless water heater. A tankless water heater will heat water only when you need it though a heat exchanger. And it never runs out. There is no reserve of water to rust out a tank and leak. The water is pumped into the system and heated on demand. This is a great option for people who travel between homes, or don’t want to heat water when they are not there. The tankless is also a wonderful solution to problems like running out of hot water in the morning or evenings when most of your hot water usage takes place. With a tankless you can supply the unlimited hot water to more than one appliance at a time – so you can shower while your dishwasher runs and both get equally hot water.

The cost for a tankless water heater can be 2 -3 times the cost of a tank. However, they have a much longer life expectancy of 20 years, with 12 year warrany on the heat exchanger. Tankless units are more efficient, with models at 84% up to 95% efficiency (.84, .95). With that greater efficiency, if you kept your water use the same, your tankless water heater should reduce your gas bill and help bridge the price gap. However, most people find that savings short lived, as they really enjoy longer hot showers.

Having a plan in place for when your tank needs to be replaced helps reduce the stress around dealing with what is normally an unexpected problem. If your tank is 10 years or older get in the habit of checking the bottom of the tank for leaks. Once a water heater begins to leak, it can only get worse so once you spot water it is time to call us to get the problem fixed.

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6 Responses to “Tank vs tankless – the water heater wars”

  • Margot Connole

    This is an incomplete review. The heat pump water heater should be central to this discussion.

  • Ava

    The tankless water heater is a compact and efficient solution for heating water. It ensures a nonstop supply of hot water in winters that make it a convenient option for both small and large families.

  • Afton Jackson

    I like how you mentioned that tankless water heaters only heat up water when you need it, making things more efficient. We’re not as busy of a family as others, and so during the holiday season, we decide to just take hot showers as our way of relaxing and staying inside while cuddling up in front of the TV. Since we won’t be stressing out the water heater as much, I’ll look for a water heater installation service that can help us get a tankless one.

  • Marge MItchell

    Are there electric options for a thankless hot water tank?

    • Washington Energy

      Thanks for asking. There are electric tankless water heaters, however, they are the opposite of energy efficient. They use lots of electricity and usually require a costly panel upgrade in most homes.


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