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Tankless Hot Water Heater Basics

There's a reason that the government is willing to give you up to $1,500 in tax credits for upgrading your traditional tank water heater to a tankless hot water heater: these compact, efficient water heaters can be up to 30% more efficient than a traditional hot water heater. Considering that as much as 25% of a home's energy usage comes from its hot water heater, a 30% more efficient unit can make a big difference – both in terms of environmental impact and your power bill.

"Yes to the tankless system -- we all need to get rid of those wasteful 80 gallon dinosaurs." ~ Reader Bob Anderson

Types of Tankless Hot Water Heaters

Most tankless hot water heaters are run by either natural gas or propane. The propane models produced by most companies tend to be a little bit more energy efficient than those units powered by natural gas, but in many cases, they are equally efficient.

You can choose a tankless hot water heater that you install indoors or outdoors, depending upon your preference and the area in which you live. Homeowners living in colder regions, for example, may not want a hot water heater installed outside, because cold air temperatures will reduce the efficiency of the unit. If you live in a warmer climate, air temperature will not be a factor, but you may want to consider the amount of wind and rain you get. Although tankless hot water heaters are generally well-protected against the elements, over time natural wear-and-tear may lead to degradation of the water heater.

Sizing a Tankless Hot Water Heater

To determine which tankless hot water heater is right for your home, you'll want to consider how you currently use hot water, what type of climate you live in, and what future hot water needs in your home may look like.

Although various manufacturers of tankless hot water heaters advocate certain models as their “whole house solution”, you'll want to double check to see if that model is actually the right size for your own circumstances. For example, if you and your family don't tend to take showers at the same time anyway because of varying work or school schedules, do you really need a unit that will provide three to five simultaneous showers? Do you really need a unit that will allow you to run the dishwasher and take a shower at the same time, or can you just wait to start the dishwasher when you get out of the shower?

In colder climates, you should also be a little wary of the manufacturer's promise of how much hot water will be delivered. The colder your climate, the more robust tankless hot water heater you will need, because the cold outside air makes the unit work harder to provide continuous hot water.

Overall, however, tankless hot water heaters offer many advantages over traditional tank water heaters. Without doubt, they are the future of both residential and commercial hot water. Thanks to the Recovery Act tax credits for efficient and renewable energy, now is an excellent time to purchase a tankless hot water heater.

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