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G. Thomas Upshaw | President & CEO
Consumers should think twice before purchasing tankless water heaters, also known as demand or instantaneous water heaters.
Unlike standard water heaters, which heat and store water for use later, tankless units heat water on demand.
Water is heated rapidly as it flows through heat exchange coils, which require large amounts of power.
If used in many homes simultaneously, the huge, instantaneous electrical load that tankless water heaters could place on electric
distribution systems could strain service reliability. The installation of tankless water heaters not only affects the
co-op’s distribution system but also members’ residential electrical systems. It can increase service costs because, in
many instances, a transformer and service upgrade would be required if this type of electric load is added to a home.
Another disadvantage is that, unlike tank water heaters, tankless heaters cannot be connected to load management and
energy conservation programs. These programs, such as H20 Select, help hold down members’ power costs by managing peak
electrical demand. About 34,000 Palmetto Electric Cooperative members currently participate in H20 Select.
To help educate our members about this latest trend in water heaters, Palmetto Electric will run the following article
in the February issue of Living in South Carolina magazine.
Co-op recommends against tankless water heaters -
- Minimal energy savings offset by higher installation, maintenance costs
Tankless water heater manufacturers tout their products’ energy-saving characteristics, but the savings are minimal
compared to standard, tank-type water heaters, says Palmetto Electric Cooperative Marketing Manager Parrish Neville.
Any savings are outweighed by the significantly higher installation and maintenance costs for tankless heaters, says Neville.
Neville urges co-op members to consider these factors before buying a tankless unit:
• Depending on size, the upfront costs of tankless water heaters range from $300 to $1,600. But, in addition
to the purchase price, significant upgrades are usually required in most homes to install a tankless water heater, he notes.
A family-sized tankless unit, rated at 36,000 watts will require about 150 amps. Most homes do not have the electric
capacity needed, notes Neville, who estimates it would cost at least $1,500 to upgrade household service by 150 amps.
• Not only is the cost higher to install a tankless heater, but repair costs are also much greater, Neville notes.
Another drawback is that the extremely high temperatures needed to heat the water quickly in a tankless unit cause
minerals to separate from the water and deposit on the coils, shortening the unit’s life. They are very complicated
products with many electronic sensors and parts onboard. Some models require “factory-trained” technicians for service,
plus replacement parts aren’t readily available. “These are not do-it-yourself installations and definitely not fix-it-yourself
products,” Neville says.
• The energy cost of using energy-efficient tank-type water heaters is still relatively low. Neville estimates a typical
Palmetto Electric Cooperative residential member would only save about $2 to $4 per month using a tankless system.
When you weigh the installation costs versus the potential energy savings, the payback time for switching to a tankless
unit could be more than 20 years, Neville says. “The math doesn’t work out,” he notes.
• Because tankless water heaters must heat water very fast, they have limited capacity and have difficulty supplying
multiple hot water needs simultaneously. Most residential tankless units are capable of heating just two to four gallons of
water per minute. That’s enough to wash your face and hands but not to simultaneously do chores like running a dishwasher
and take a shower. It also takes a long time to fill a bathtub using a tankless unit.
Neville says standard storage water heaters are only limited by the tank size and can handle most any typical family’s
hot water needs all at once.
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