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Can you cut energy costs with on-demand water heaters?

Can you cut energy costs with on-demand water heaters?


Before we get to the details on on-demand water heaters, let’s take a look at a few telling facts:


  • The average household uses 64 gallons of water each day
  • The average household spends $400 to $600 on water each year
  • Water accounts for 14% to 18% of your utility bills, making it second largest expense in your home

Based on all of the above, it’s clear any savings that you can get out of your water heater can make a big impact on lowering cost. On-demand water heaters, also known as tankless water heaters or instantaneous water heaters, provide as the name implies hot water only as needed. This means you reap two benefits: cost and energy savings. These types of heaters can, in fact, use 30% to 50% less energy than units with tanks. 

First of all, how does a water heater without a storage tank work? 


The U.S. Department of Energy shares a straightforward definition: 


“Tankless [or on-demand!] water heaters heat water instantaneously without the use of a storage tank. When a hot water faucet is turned on, cold water flows through a heat exchanger in the unit, and either a natural gas burner or an electric element heats the water. As a result, tankless water heaters deliver a constant supply of hot water. You don’t need to wait for a storage tank to fill up with enough hot water. However, a tankless water heater’s output limits the flow rate.”

On-demand vs. tank-style heaters:

If you compare the tankless kind to its tank-style counterpart, you’ll notice the former, as pointed out above, produce an endless supply of hot water. It also takes up less space, lasts longer on average, run a lower risk of leaking, and is overall considered to be the safer choice. And, again, the way it operates is a recipe for cost and energy savings. 


So, in what areas do on-demand water heaters lose out to the storage variety? If you have ever compared the upfront cost of the two units, you may have balked at the price tag of on-demand heaters. On average, tankless heaters cost up to three times more, including installation. They also tend to take longer to deliver water, the water temperature may be inconsistent if multiple units are run at the same time, and if the power goes out, so does its ability to bring hot water. 

Also consider: 

Then again, although the initial cost is greater, tankless water heaters can last nearly twice as long. This means the incurred energy cost savings will, over time, offset the initial expense. While a storage water heater last 10 to 15 years, tankless heaters have a much longer life expectancy. You can expect your unit to last for more than 20 years. 


In the end, your consumption will ultimately determine how much energy you save. From the Department of Energy again: “For homes that use 41 gallons or less of hot water daily, demand water heaters can be 24%–34% more energy efficient than conventional storage tank water heaters. They can be 8%–14% more energy efficient for homes that use a lot of hot water around 86 gallons per day.”

Contact Gervais

A Gervais licensed plumber can help you understand your options and find the best water heater for your home.  We are happy to discuss possible heater types that would work with your existing plumbing and utilities and help you determine the best system for your needs and budget. Installing a tankless water heater might be just the right choice for you.


Contact us at Gervais Mechanial Services to schedule an appointment. 


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Keyword:  on-demand water heaters

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