Cost of Heating Water in the Home:
Generally, 20 percent of a home's energy use comes from heating water for bathing, washing dishes, laundry, and cooking. Annually, this can add up to more than $450 to
operate a conventional storage water heater.
How Conventional Tanks Work:
Storage tank-type water heaters raise and
maintain the water temperature to the temperature setting on the tank
(usually between 120 degrees - 140 degrees Fahrenheit (49 degrees - 60
degrees Celsius). Even if no hot water is drawn from the tank the
heater will operate periodically to maintain the water temperature.
Also, when cool water enters the tank to replace used water it too
needs to be heated to the desired levels.
The process of heating water in a storage tank suffers
from what is called, "standby loss". Standby loss describes the energy
wasted to maintain a specific temperature in the tank. Standby loss
accounts for up to 20 percent of a home's annual water heating costs.
How Tankless Water Heaters Work: Tankless water heaters are often
referred to as, "on-demand water heating," because it does not store
heated water. Once the faucet is opened, water flows into the heater
where a sensor turns on the heat exchanger or heating coils. Water
flows through the heating coils, it is heated to the desired
temperature. Once the faucet is closed, the sensor automatically shuts
down the heating coils. The entire process takes about 5 seconds to
heat the water initially.
We have seen that since there is no standby loss, tankless
heaters can be more energy efficient than their counterparts. Other
advantages to tankless water heaters are that they do not waste water
since water is heated almost immediately. Also, you will not run out of
hot water in the middle of a shower.
Since tankless heater are smaller and do not hold water, their life
span is 20 years, twice its counterpart's.
There are tax benefits to tankless water heaters as well.