I’ve heard that Canada’s known natural gas reserves will last about 8 years so I’m thinking of getting rid of my old hot water tank and replacing it with a tankless water heater to save on the gas bill. What are your thoughts on these tankless water heaters?

Without question, you will save money on your monthly gas bill. One of our Firm’s partners recently installed one of these “in-line” tankless heaters, and he reports a $30 savings on each recent monthly gas invoice. To provide a bit of background, this is how the tankless heater conserves energy. Conventional water heaters continuously heat a full tank of water, 24 hours a day, all year long. An in-line tankless heater heats only the water you use at the instant you use it. When you turn on the tap, the gas burner ignites, and the water passing through the heat exchanger warms instantly on its way to your tap. The moment you shut the tap off, the gas burner shuts off. So you’re heating and paying for exactly the water you use rather than the full tank of water. This is where the savings are vested. The heater is small, about the size of a microwave oven hanging on your wall, so you’ll gain some additional floor space as well.

Some folks are concerned that these on-demand water heaters are not capable of supplying more than one hot water tap at a time. I think this notion has its roots in experiences throughout Asia, Europe and South America where these systems have been used for years. The lack of volume can be attributed to what we might feel are undersized heaters. If you are concerned about having sufficient hot water supply to run a shower, washing machine and a sink faucet simultaneously, simply purchase a tankless heater with the capacity to provide the volume of heated water you feel you need.

There are some performance differences between tankless heaters and conventional water tanks that you may be interested to hear about. For instance, because tankless heaters stop heating the water when you turn the faucet off and don’t start heating the water for a few seconds after it is turned on again, there is a “sandwich” of cool water between each on / off cycle to the faucet. In conventional heaters this “sandwich” effect is mitigated by the continuous supply of heated water from the tank through the water lines. So when you repeatedly turn the tap on and off, you get a relatively consistent supply off hot water. You may find that you adapt more conservative habits with a tankless system. For instance, rather than rinsing each dish individually after washing, you may run a basin of rinse water to avoid this “sandwich” effect. As well, most tankless water heaters can accommodate a small re-circulating loop that eliminates this “sandwich” effect if you find this difference irritating. Tankless heaters uninstalled cost about $1200 compared to conventional heters at about $400. The extra cost will be recovered in your gas savings over time. If you live in rural area where natural gas or propane is not an option, electric demand heaters are also easily installed. However, you will probably need at least a 200 amp service panel to accommodate the breaker size required for the tankless service wire. If you are shopping for a tankless gas heater, look for a high-efficient model with a plastic vent pipe. This feature eliminates the heat loss and space requirements of a conventional “B’” vent chimney and increases the heater efficiency to about 85%, providing you the best gas savings possible.