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Does an Electric Tankless Water Heater Make Sense?

A vacation home gets only intermittent use, but needs lot of hot water once in a while

Posted on May 28 2018 by Scott Gibson

David Voros owns a vacation home that isn't used frequently, but every so often the house sees a lot of guests. What, he asks, is the best way of providing enough hot water for a crowd?

Voros sketches out these parameters in a recent Q&A post: very cold incoming water temperatures, a limited amount of space for a tank-style heater, and limited availability of gas. The house has photovoltaic(PV) Generation of electricity directly from sunlight. A photovoltaic cell has no moving parts; electrons are energized by sunlight and result in current flow. panels, and Voros would like to avoid running another exhaust pipe through the building envelopeExterior components of a house that provide protection from colder (and warmer) outdoor temperatures and precipitation; includes the house foundation, framed exterior walls, roof or ceiling, and insulation, and air sealing materials..

For all of those reasons, he's drawn to an electric tankless water heater. Whether that's a good idea is the basis for this Q&A Spotlight.

Electric models need a lot of juice

The cost of operating a tankless water heater won't be any more expensive than operating a tank-style heater, Editor Martin Holladay says, but a tankless model will need an oversized electric service, and that can be expensive to install.

"There are also disadvantages for the local electric utility, since it has to provide high-current electricity in short bursts," he adds, "but you may not care about that."

Dana Dorsett adds some particulars: a whole-house tankless draws more than 25,000 watts of electricity and needs a 150-amp, 240-volt breaker. The total electrical service for many houses is less than that, he adds. A typical tank-style water heater draws less than 5,000 watts, and it will have relatively low standby losses. And when Voros is away, a tank-style heater can simply be turned off.

Dorsett also points out some of the potential rate implications for Voros, who is a solar customer.

"In many locations, utilities are struggling to recover their infrastructure costs, particularly on low-use or net-zero electricity houses with solar," he says. "The concept of applying 'demand charges' to the billing has been common for commercial and industrial ratepayers to cover infrastructure costs ... Demand charges take the heaviest use in half-hour or 15-minute intervals during a billing period and apply a $/kw (not per kWh) multiplier to that period, and it's often the largest single line item for those customers. This type of billing is being proposed for special classes of residential ratepayers all over the U.S., the most common special class being low-total-use solar ratepayers."

Should demand charges be implemented in Voros's area, an electric tankless water heater can become a liability.

"The notion that demand charges are 'unlikely' isn't well founded, particularly for solar ratepayers," Dorsett says. "As more distributed solar goes on the grid, this has become a utility favorite proposal in rate cases. only made news because it's one of the largest utilities to be granted demand charges for solar customers so far, but they are far from the first. As utility business models evolve, it's conceivable that residential demand charges will be approved for all customers in some U.S. utility somewhere before the warranty period of a water heater is up. (No, wait, that has already happened in some local utilities in Alaska.)"

A low-flow shower head could help

Jon R suggests that using a low-flow shower head, one that draws 1 gallon per minute, could help reduce the size and power needs of a tankless water heater — to something that drew less than 10,000 watts.

And at 1 gallon per minute, Dorsett adds, a 10-gallon under-the-cabinet tank heater that stores water at 140°F would be more than enough for an 8-minute shower even if it wasn't big enough to fill a tub.

"You're touching on something that I've thought about a few times," writes Calum Wilde. "Hot water systems at this point have two distinct uses; everyday low volume uses like dishwashers (3-5 gal) and showers (5-20 gal), and high volume uses such as filling a bathtub (35-80 gal). There's such a huge divide between those uses I'm surprised we aren't seeing more ideas for a way to split those uses to give better efficiency for both."

Consider more than one heater

If an electric tankless heater is a less-than-best option, Voros says, what about the possibility of putting a short water tank in the sealed crawlspace beneath the house? Or, he adds, even two tanks?

Trevor Lambert does have two water heaters, and while it's nice to have the extra hot-water capacity, it comes at the cost of of the second tank plus the standby losses it incurs.

"If you can get a single tank big enough to handle your needs, that is preferable," Lambert says. "The problem with any electric tank is that the recovery rate is painfully slow when compared to natural gas. If you get two tanks, I would say having them in series makes more sense than having them independent, serving different areas. There will be a lot of times where the entire demand is from one area, and having them in series allows both to serve that demand."

Holladay recommends that if hot water will be needed in two rooms that are more than 20 feet apart, it might make sense to consider installing one heater near each room. Otherwise, he says, a single tank is the best choice.

Losses through 'abandoned heat'

Standby losses in an electric water heater are fairly small, Dorsett says. Increasing the volume of the tank doesn't change that very much.

"Abandoned heat and distribution losses in the distribution plumbing usually adds up to quite a bit more than the standby loss of a 50-gallon electric tank, and doesn't go away when going tankless," he says.

To reduce those energy losses, it's worth installing at least R-3 worth of insulation on all 3/4-inch distribution plumbing, as well as on any 1/2-inch line of some length. In addition, he says, insulate the temperature and pressure relief valve, and the first 5-10 feet of any outflow piping from the valve.

"Actually, the right way to install a tankless electric water heater is as close as possible to the shower or sink where the hot water will be used," replies Holladay. "Since most homes with tank-style water heaters have a significant length of pipe between the water heater and the fixtures that require hot water, I would argue that switching to a tankless electric water heater almost always reduces 'abandoned heat and distribution losses' significantly."

Although Holladay isn't advocating that Voros install electric tankless heaters, he does suggest that it's important to locate each heater close to the fixture or room it is serving.

It's still a lot of electricity

Low-capacity faucets that limit the demand of hot water may not be enough to justify a tankless electric heater, Dorsett argues. For example, a kitchen faucet drawing 1.5 gallons per minute, and assuming a 70 F° water rise, would still need a tankless heater with a 75-amp, 240-volt breaker.

"A pair of those would add more than 150 [amps] to the service drop capacity requirements," he says. "That's already 100% of the capacity of the panel in my house, and could be more than the existing panel capacity at David's vacation house. The transformer serving my house (and seven others) does not have sufficient capacity to bump all eight houses on it to 200 amps, let alone the 300-350 amps or so per house it would need to run eight multi-tankless houses."

Compare that demand to a Level 2 electric car charger, he says: most of them draw less than 50 amps. A variety of programs are emerging that use car batteries and smart car chargers to smooth out loads on the grid, and they will become more commonplace in the years ahead as the number of electric vehicles grows.

"But you can't do any of that with a tankless water heater," he says. "It draws what it needs, when it needs it, and would not provide satisfactory service if it could be interrupted intermittently for grid management. It's just a very heavy, intermittent load that forces the grid capacity infrastructure requirements higher. With no possibility of using it for improving the power quality on the distribution grid, it's just a problem that other infrastructure needs to be put in place to solve, the opposite of 'green,' despite the very low standby losses."

Our expert's opinion

Here's what GBA Technical Director Peter Yost added:

I don’t think there is a stand-out solution in this situation (the situation being intermittent use, with the intermittent use sometimes including lots of users). The very cold incoming temperatures, limited tank space, and limited availability of gas make this a domestic hot water perfect storm. The points already made regarding the huge draw of electric tankless beg for some sort of flywheel system — that is, a system that includes a substantial amount of hot water storage — as part of the DHW system for this vacation home.

I like the "staged flywheel" system: two tanks installed in series. It seems the only way to cover, at least to some degree, the large number of users scenario. Rigging these up to a remote wireless activation system makes sense so you can bring the system up to temperature just before you or all your friends and family show up.

I think the very cold incoming water temperature means that an on-demand hot water circulation system is a good fit for this vacation home as well.

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May 28, 2018 10:02 AM ET

How about a high temperature tank with a tempering valve?
by Skip Harris

One way to get more water out of a small tank is to increase the temperature and add a tempering valve. Assuming incoming water at 60degF, a 20gal tank @ 200degF will provide nearly 40 gal at 140degF.

Of course, the standby losses are higher, but that can be mitigated if you only turn it up when you are there.

May 28, 2018 9:17 PM ET

One of these might be helpful
by Calum Wilde

One of these might be helpful for the original poster. I could give the remote-controllablity and the temperature control that would make the system flexible for the various usages, albeit with user intervention.

Looking back I don't remember seeing anything about drain water heat recovery. I thought there was at least one horizontal unit on the market. That would increase the recovery rate of a tank and a tankless heater. In conjunction with a high temp heater and low flow shower heads, it might be enough to make tank water heater(s) viable.

May 28, 2018 10:11 PM ET

Edited May 28, 2018 10:13 PM ET.

Another thought. Would a
by Calum Wilde

Another thought. Would a powered anode be a decent way to prevent bacteria growth without needing to keep the heater running when the house is unoccupied?
My powered anode uses 1.2W or about 10.5 kWh/year. Much less than the cost of running a water heater in standby and even much less than the cost of replacement sacrificial anodes.

May 29, 2018 11:12 AM ET

Solar Thermal?
by Joseph Malovich

Another option is a solar thermal heater with a large storage tank. When the family is away the tank can slowly heat up, over a weekend the family may not use all of the hot water available in a 100+ gallon tank. A single large tank would be most thermally efficient.

Multiple 50 gallon tanks in series could be an option with solar thermal heating on both of them and a normal electrical tank operation in the last last one as a backup for cloudy days or extended stays. The first tank would act as a tempering tank with solar assist allowing the powered tank element to work less.

May 29, 2018 12:48 PM ET

Response to Joseph Malovich
by Martin Holladay

Solar thermal equipment is so expensive that it has a long payback period, even for a full-time residence.

In a part-time residence or vacation home, the payback period is even longer, and it's hard to justify such a big investment in light of the limited energy savings.

Moreover, in a vacation home, you'd need to come up with a dump load to prevent the system from overheating -- something that can occur during sunny months when no one uses hot water for several days in a row.

May 30, 2018 12:50 PM ET

HP Tank + Tankless (booster)
by Harris Woodward

I've enjoyed my heat pump water heater's efficiency and it's WiFi app to remotely increase water temp and/or recovery mode (heat pump, electric resistance, or both). Family visiting? Increase temp to 140degF and switch to dual recovery. Just us?... drop it to 120degF and stick to HP recovery. All from my phone.

But if you need more than these very energy efficient water heaters can produce, I suggest an electric tankless booster, like this one . This "in-series" tankless unit draws far less power, takes up no more space, and may provide the hot water needed for this vacation home when combined with a powerful heat pump tank heater.

May 30, 2018 1:06 PM ET

utilities can care about this
by Leigha Dickens

I recently learned that our local electrical utility has a policy whereby they reserve the right to charge you for their costs if they find out you've installed a tankless electric water heater and as a result they have to upgrade the infrastructure on your street. Which could be big bucks, but I don't see them being very likely to carry out that threat, because I don't know how easy it would really be for them to find out you'd done that in a retrofit situation. If you're on a street that's already maxed out for what the transformer can handle, are suddenly upgrading your house electrical, at the same time that all your neighbors start to complain about their lights flickering...maybe. Anyway, worth finding out if your utility has a clause like that, especially if considering a tankless electric for new construction, where you're applying for new power and they sometimes ask what kind of water heater you'll have, or might raise an eyebrow at why a house is getting unusually high electric service.

May 30, 2018 1:49 PM ET

For a vacation home? @ Harris Woodward & Joseph Malovich
by Dana Dorsett

Seriously folks, throwing that kind of hardware & expense at "... a vacation home that isn't used frequently..." is worse than ridiculous. Even if it has to be mounted outside in a small shed a second plain-old electric water heater + shed could cost a lot less than a solar thermal or heat pump water heater + 7kw tankless. (A HPWH + 7kw tankless doesn't come close to solving the capacity issue David Voros wants to solve either.)

Leigha: Out of curiosity, can you name the power company and location?

High power intermittent loads are a very REAL expense with potential looming problems to come, not just tankless water heaters. Without some smarts on board to allow the utility to manage them, neighborhoods full of level-2 electric vehicle chargers could potentially bring distribution grids to their knees, (and not just the local transformer.) But with smart chargers the EVs can become a welcome grid stabilizing force (unlike tankless water heaters of any size), and can even defer the need to upgrade the local transformer, despite higher net throughput of power, and even allow the integration of higher amounts of renewbles at a lower cost than stationary grid-batteries:

It doesn't take a lot of additional smarts to schedule interruptions of the EV charging load when the local transformer is reaching it's max capacity. Most of the time the local transformer and distribution grid is operating at a single-digit or low double-digit percentage of it's maximum capacity. With smarter loads doubling or even tripling the amount of power delivered on those assets won't unduly stress them. Unlike EV chargers tankless water heaters can't be interrupted and still serve their primary function- they need that power when they need it, in real time, and a 20 second interruption would be a functional disaster, whereas an EV charger dropping out for 20 seconds so that the neighbor can wash her hands with a ridiculous electric tankless without cooking the transformer isn't a problem.

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