Tankless Water Heater Installation

Tankless water heaters conserve energy yet provide an ample supply on demand.

If you’ve ever been stranded in a freezing shower with a head covered in suds, the appeal of a tankless water heater is obvious: never having to holler “What happened to the hot water?” again. Besides providing an endless supply of hot water, these units are so compact and energy-efficient that it’s no surprise they’re rapidly gaining popularity among American homeowners.

Though Japan and Europe have relied on these appliances for several decades, their use in North America has been limited. So what took us so long to catch on? Until recently, we hadn’t needed to change, says Jason Blackburn, Northeast territory manager for water-heater manufacturer Takagi. “Unlike our Asian and European counterparts who have both energy limitations and space constraints, we have had the luxury of not being concerned with either,” he says. “But with the increase in fuel prices, the demand for more efficient ways to heat domestic water has risen dramatically. Plus, as more Americans are making an effort to become environmentally conscious, they are also realizing the added benefits of using tankless water heaters.”

The use of tankless heaters in this country had also been limited by availability (the units were primarily manufactured overseas) and by contractors’ tendency to opt for familiar technology — after all, tank-style heaters have worked well for many years. But increasing energy costs and builder incentives such as the Leadership in Energy and Environmental Design (LEED) program, which encourages the use of more efficient products, have led many Americans to explore new options for meeting the hot water demands of their homes and businesses.


Tankless water heaters take up much less space. Above, is the old 50-gallon water heater. Below is the new tankless model.

Why go tankless?
Unlike traditional water heaters, tankless units don’t store water; they heat it as it flows through them. As long as you have water and energy, a tankless heater’s production is limited only by its heating capacity. A typical whole-house-rated gas-powered model with a capacity comparable to a 40-gallon tank-style heater will provide 4 to 5 gallons per minute (gpm). A few electric models can match these flow rates, but they require large dedicated power supplies.

In addition to virtually unlimited production, tankless heaters boast significant cost savings because they don’t reheat stored water as tank-style heaters do. It is estimated that tank-style water heaters account for 20 percent to 25 percent of home energy costs, and as much as 80 percent of that energy is used to reheat the water that is stored in the tank, a waste of energy known as “standby loss.” Besides eliminating that expense, most tankless water heaters are efficient enough to qualify for some tax credits.

Tankless water heaters also last at least 20 years, compared with 10 to 15 years for most tank-style heaters. And because their parts are easy to access and replace, you can extend the life of some tankless units beyond 20 years.

Finally, tankless water heaters offer tremendous space savings. In warmer climates (those that never dip much below freezing), the heaters are often mounted outside the house or inside the garage. Small units (most often electric-powered because of venting issues) can be mounted under sinks or inside closets to act as point-of-use heaters for remote bathrooms, hot tubs or pools.


Tankless Water Heating
When a hot-water tap is opened, water flows through the unit and is detected by a computer, which ignites a burner. The water travels through a series of copper tubes called a heat exchanger, which very rapidly warms the water to a designated temperature. When you turn off the hot water, the computer detects the stop in flow and turns off the burner.


Potential Pitfalls
Too often the marketing, sales and media coverage that introduce a new technology hype the benefits and focus only on best-case scenarios, setting up unrealistic expectations for consumers. Consider your specific needs and expectations when choosing a water heater system. For example, from a consumption point of view, an endless supply of hot water is enticing for a large family that frequently runs out of hot water, but maybe your household rarely runs out of hot water. And if you only run out of hot water occasionally, maybe a simple change in water-consumption habits would remedy that problem. Maybe you would be better served by installing another tank-style unit that is larger and more efficient, or you might consider another water-heating option such as a heat pump or solar water heater.

There are also a few drawbacks that limit the appeal of tankless water heaters for some homeowners. The biggest deterrent is the initial expense. A tankless heater costs at least twice as much as a comparable tank-style unit. Depending on the plumber’s experience with tankless water heaters, installation can cost as much as $3,000 and take a full day or more, compared with $800 and half a day for a tank-style unit. In some cases, it might take as long as 10 years to recoup those costs in energy savings.

The difference in installation costs is less in new construction. Replacing an existing tank-style unit is more expensive because sometimes the existing fuel-supply line and venting system must be upgraded. Under maximum demand, a tankless heater can require four times as much gas (200,000 Btus for some models) as a comparable tank-style unit. And closed combustion units require sealed stainless steel venting.

Operating costs can also be the subject of debate. Some owners of tankless units say they do not reap nearly as much savings as they expected, but this is hard to verify because the energy used by other appliances, the amount of hot water used and energy prices vary greatly among households. Some also question how accurately current Energy Factor ratings (originally developed to rate tank-style units) estimate operating costs for tankless water heaters.

Other common complaints include increased delays in hot water reaching fixtures, which can be inconvenient and wastes water. Some users also complain that they don’t get hot water when the faucet is running at a low rate. To prevent the heat exchanger from overheating, tankless units require a minimum amount of water flow to activate the burners. When hot water is used at a rate lower than the minimum flow rate (typically 3/4 gpm), the burners turn off.

Another complaint is that water temperatures can be inconsistent or fluctuate with hot water demand. This problem has a couple of potential causes. First, the best tankless units feature monitoring systems that regulate the burners to maintain a consistent temperature as water demand changes, but some older and less expensive units don’t feature this technology. Second, tankless heaters switch off every time the hot water is turned off. When hot water is used intermittently, cold water can pass through the unit each time the burners are reignited.

There are a few ways to optimize a tankless heater’s performance and minimize some of the drawbacks. Preheating systems, such as a solar water heater or drain-water heat-recovery systems, warm the incoming water so that it isn’t as cold when it reaches the heater. A recirculating pump quickly pumps the cold water in the hot lines back through the cold-water lines, speeding up hot-water delivery and limiting wasted water. There are several variations of this type of system. A small insulated tank installed after the tankless heater can store hot water and be used to temper the initial cold water that flows through the unit before the burners ignite, making the delay less obvious.

Selecting the Right Model
Like most appliances, tankless water heaters are available in a variety of capacities for different applications. Smaller-capacity units are great for point-of-use locations such as remote bathrooms. Larger-capacity units work well as whole-house water heaters, especially in warmer climates where an outside installation is permitted. Large homes are often best served by multiple units that operate different dedicated fixtures or plumbing zones.

Three additional factors to consider when selecting a tankless heater are the fuel type, the flow rate and the incoming water temperature. You must choose a unit that is compatible with your fuel supply. Natural gas, propane (LP) and electric units are available. Gas units tend to be less expensive to operate than electric units. For better energy efficiency, select a gas model that features an intermittent ignition device rather than a pilot light. In some situations, electric units are your only choice: for example, if you’re installing a heater under a sink or in a closet where it is not feasible to provide appropriate venting and combustible supply air.

Every tankless water heater has a maximum and a minimum flow rate. The maximum flow rate is the peak amount of hot water that the unit can continuously output. To choose a model that meets your needs, estimate your hot water demand by adding up the flow rates of all hot-water fixtures that may run simultaneously (see “Fixture Flow Rates,” below). Exceeding the maximum flow rate will result in lower water pressure at each fixture.


Fixture Flow Rates
The following are estimated flow rates for common hot-water fixtures. Your specific fixtures’ usage rates will likely vary, but these estimates will give you a general idea of your needs.

  • Bath faucets = 1 gpm
  • Kitchen faucets = 2 gpm
  • Showerheads = 2.5 gpm
  • Washing machine = 2 gpm
  • Dishwasher = 1.5 gpm


The ability of a unit to maintain the peak flow-rate estimated by the manufacturer depends on how cold the incoming water is. The more the heater has to warm the incoming water, the lower the water flow rate (see “Climate Effects,” below). For example, a water heater may be rated to produce 8 gpm, but when it is heating 50-degree incoming water to 120 degrees, it may actually produce only 4 gpm.

No matter how high a unit’s maximum flow rate may be, the minimum flow rate (the smallest amount of water flow that will activate the burners) is equally important. To ensure the heater will activate when only one faucet is drawing water, you’ll need a unit with a low minimum flow rate (1/2 to 3/4 gpm).


Climate Effects
Colder incoming water temperatures force a tankless water heater to work harder to heat the water to the desired outgoing temperature, resulting in potentially lower flow rates. The following table demonstrates how different incoming water temperatures will effect the outgoing water temperature and flow rate.


Installation Considerations
Installing a tankless water heater is not a job for most DIYers. Instead, hire a qualified plumbing and heating contractor (see “Installing a Tankless Water Heater,” below). To avoid potential delays, seek input from your local inspections department before you begin any installation.

Keep in mind that inspections departments and plumbing contractors may not share your enthusiasm for this new technology. Their reluctance is often based on liability concerns and limited experience with tankless water heaters. But in some cases a plumber may have legitimate concerns about whether a tankless heater will meet your expectations in terms of hot-water supply or potential future savings.

Once you’ve considered the pros and cons, you can decide whether a tankless water heater is a worthwhile investment. If you are convinced that a tankless unit is right for your home, contact the manufacturer to help you find a contractor who can provide a proper installation.

And after your new tankless unit is installed, remember: Just because it can produce more hot water does not necessarily mean you should be taking longer showers — but that’s another story.


Installing a Tankless Water Heater
We worked with Joe and Sean Robillard of Robillard Plumbing in Maple Grove, Minnesota, to replace an approximately 19-year-old 40-gallon tank-style heater with a Takagi T-KD20 tankless water heater. Overall, the homeowners have been pleased with the new unit’s performance. It has met their hot-water demands, and although it does take slightly longer to get hot water to each fixture, the delay is not excessive. Low flow rates have not led to a lack of hot water; the burners kick on when the kitchen faucet alone is running at just half of its full flow rate. During intermittent use of the kitchen faucet (turning it on and off with a few minutes in between), they occasionally notice a brief temperature drop, but it isn’t problematic.


The flexible copper gas line that supplied the old water heater was replaced with a 3/4-in.-dia. rigid line that also travels a shorter distance to provide the 185,000-Btus necessary to power the new tankless water heater under maximum demand.


The new water heater is a direct-vent (or sealed-combustion) system. The old galvanized vent pipe was replaced with 4-in.-dia. Category III-approved sealed stainless steel pipe. A 4-in.-dia. pipe that extends through the side wall provides fresh air.


The incoming and outgoing water lines were rerouted to the new unit. A pressure-relief valve is connected to the output line to provide an emergency outlet in case the unit were to malfunction and heat the water when it is not flowing.


A grounded power cord is connected to the new unit and plugs into a 120-volt outlet. The electricity powers the computer and the intermittent ignition device.