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Do tankless water heaters cut costs?

September 11, 2008 12:00:00 AM PDT
When it comes to your gas and electric bill, it may surprise you to learn up to 30 percent of your money goes to heating your water. Many people are installing energy-efficient tankless water heaters in an attempt to get their costs down. But these systems may not work as well as you might think. Tankless water heaters can cut your energy bill. That's the good news. But as we found out when we teamed up with Consumer Reports, tests show tankless heaters may not give you the hot water you're used to.

Shari DiPaola's two teenage sons take a lot of hot showers, which she knows can add up.

"They're always in the shower," said DiPaola. "Jarred comes back from work, Alex comes home from work, they're in the shower."

Some manufacturers claim you can cut your energy costs by half. Consumer Reports tested both tankless and regular water heaters.

The tankless heaters were expensive, costing $800 to $1,150, versus $300 to $500 for regular heaters.

Tankless water heaters are more energy-efficient because they don't store hot water. They only heat water when needed.

Testers, with the help of an outside lab, assessed the water heaters for both energy use and the cost to operate. Tankless heaters do have their drawbacks.

"Some people may think that tankless water heaters provide instantly hot water to the faucet. That is not the case," said Gian Trotta, Consumer Reports.

Another issue: If you only need a trickle of water, say for shaving, the tankless heater's burner may not ignite and all you'll get is cold water.

Along with a higher price tag, tankless water heaters can be a lot more expensive to install and maintain. According to Consumer Reports tests, tankless heaters could save you around $70 to $80 per year on your energy bills.

"But their high cost means it could take you up to 22 years just to break even, and that's not necessarily a big money saver," said Gian Trotta.

But if saving energy is important to you, getting a tankless water heater may be worth the expense.

Southern California Gas Company is offering rebates for its customers on tankless water heaters. The other utility companies have rebates and incentives on other energy efficient products.

Tankless water heaters resource guide:


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