Success With Tankless

Tankless water heaters aren't the anomaly they were just a few years ago, but many builders still don't understand the benefits this emerging technology offers. One builder who does understand is Dick Brown, manager of Dallas-based Carl Franklin Homes. Brown started offering his home buyers the tankless option more than five years ago after working with the NAHB Research Center to measure the operating cost difference between a tankless unit and a conventional tank. Researchers installed both systems in one of Brown's homes and used a computer to switch the home between the two, while measuring the electrical use of each. Their findings showed that the tankless unit would save almost $200 per year in electricity.

Brown installs one tankless unit in each of his two- or three-bedroom starter homes, though he knows builders of larger homes who use tankless units as supplemental heaters. "The tankless unit provides instant hot water at the tap without having to wait five minutes for the water to warm up," he says. The units cost between $600 and $800 dollars. Installation costs a few hundred dollars for a new home.

Tankless water heaters come in gas and electric models. Brown prefers the latter. "Our homes have electric heat, so it makes sense for us to use the electric units," he says. "Besides, you can't put the gas units in as many places as the briefcase-size electric units, because the gas units require vents."

He describes the plumbing requirements as straightforward. "We use one plumbing drop and put the tankless heater in the attic above the drop." A bigger expense is in the electrical supply. "When these units kick on, they require a lot of current," he says. Depending on its size, a tankless water heater can require a 60- to 120-amp breaker fed by a 100- or 200-amp electrical service. Retrofit installations have the added expense of pulling wires through walls and perhaps upgrading the service, Brown notes.

But he finds that the benefits easily offset the expense, even in an existing home. For instance, he knows one homeowner who had a tankless water heater installed in an existing vacation home because he didn’t want a conventional water heater burning gas when no one was around to use the water it was heating. And insurance companies now have their sights set on the technology as well. "State Farm Insurance is interested in doing more research on tankless because one of their largest claims is water damage due to ruptured hot water heaters," Brown says.

Of course, the biggest benefit is a steady supply of hot water. That's certainly what the family in Brown's test home decided. At the end of the test, they asked if they could keep the tankless unit. The reason: The only times they ran out of hot water were when they were being supplied by the tank. About half of Brown's buyers now make the same choice.