Energy Smart Design

 'Flash' and 'On-Demand' are just the different ways to call tankless water heaters.  More significantly, on-demand tankless water heaters actually cuts down your energy costs that are used to heat water by half, and  unlike the traditional tank system you get endless stream of hot water that never runs dry.  According to studies, energy used to heat water makes up 11% of total energy costs every year in the residential market (The energy costs attributed to hot water in the US is about $300 per household annually, plus or minus $100, dependent on total number of occupants).  

The general public typically has little or no knowledge about  hot water cost as most households do not have individual utility meters installed and this is invariably rolled up along with other usages inside the bills presented by the gas or electric companies.  The saving you are likely to gain when you switch to an on demand tankless system from the old 'Tank' water heater is close to $150 annually or somewhere in the proximity of 40% of your original cost.  The problem is that the cash outlay for these on-demand tankless water heaters is significantly more.  While we have seen a relatively sharp decline in the price tags, most homeowners are, or are likely to be, apprehensive on the installation costs.  Use are appropriate Energy Amortization Device to see how long it will take you to recoup system costs.

An average on-demand tankless water heater and installation will set you back another $2,000 in comparison with the conventional type.  The equipment itself can range from $800-$1000, largely dependent on the manufacturer as well as the unit size, that is measured in terms of gallons per minute in order to satisfy the household demand.  The demand, in turn, is to be determined by the number of bathrooms, laundry requirement plus the number of occupants having showers at any given time.  The associated installation costs can vary quite a bit, starting from $800 all the way to $2000, with $1,400 being the average price.  The huge disparity in this installation costs is primarily due to the location factor in the household, for the gas supply and the flue.

Additionally, it can cost more because on-demand tankless water heaters typically need a bigger gas supply line compared to similar sized conventional water heater, and its exhaust flue system must exhaust to the outside.  The restriction on the number of bends contractor can put in the flue and the horizontal and vertical, length the flue can run all add up to determine an appropriate installation cost.  Flues can be vented through the side walls so that the exhaust air doesn't have to be transported out through the roof; of course homeowners need to have existing setbacks from window door openings, and furnace intakes (requirement for individual county may vary, check with your local authorities).  Make sure you request for a free quote on installation before you commit to any on-demand Tankless water heater.  

So $1,600 to $3,000 is the price range (average: $2,400) for complete hardware with labor, subject to household requirement.  In the case of conventional tank system, hardware and labor costs $550 and $450 respectively, which is not even up to 50% of an average on-demand Tankless water heater.  Now the combined costs of $1,000 should be treated as a 'sunk cost' in your return on investment calculation for the Tankless option, as you will invariably spend this amount during replacement.

The additional benefits of going Tankless are the longer life span expected of the system and yearly savings of $120 on your utility bills.  Some models allegedly save you up to 50% off your water heating energy, and when you think of a household of 4 or 5 can run up the utility bills by $400 every year (just water heating costs), that savings could be really significant.

Additional information: the relatively high cost of Tankless installation is because of the necessary use of stainless steel pipe as the flue to transport out the very hot exhaust air resulted from flash heating the water.  Since most households have utility rooms with exhaust for laundry heaters, typically in the form of a window well or an outside wall or some other means to exhaust hot air outside, this can help to reduce costs, but  the installation still represents a significant variable in the payback equation for any household.  We can't stress enough how important it is for you to get a free quote on installation before deciding on any on-demand Tankless water heater.

Your energy savings starts as soon as your new tankless system is installed. One other factor is that the Tankless system doesn't take up much space, with measurements similar to those of a carry-on luggage, and can be mounted directly onto the wall.  Perhaps more importantly, since on-demand Tankless water heaters do not require water storage; corrosion is not a problem and can easily last over 15 years instead of just 10 years in the case of traditional 'tank' systems.

From the green home remodeling perspective, the old thinking of keeping a water tank at 140° all times of th day does not make sense, since high demand happens only in mornings and evenings.  Go figure, we may enjoy home-made pasta but there is no reason to keep a pot of hot water boiling all the time.  On-demand tankless water heaters are still not a common feature in the average American households, but it is definitely getting attention in the market with its promises of energy-saving, longer life expectancy and hot water supply that never run cold.  Moreover, for many years, this system has been proven successful in the European and Asian markets, supported by technology that is constantly improving.  The above ROI calculation assumes a demand of 7 gallons of water per minute -- sufficient for two showers alongside with a single appliance like washing machine or dishwasher at any given time.

On demand 'Flash' or 'Tankless' water heater consumes 50% of energy and takes no more than half the space a traditional tank would, and can be mounted on the wall easily.  The flash heating aspect of the system often calls for stainless steel exhaust pipe so make sure your contractor is fully aware of that.