Switching to a tankless water heater can offer great benefits, but deciding between an electric or gas model, and when to make the switch, requires careful thought. Let’s explore the key factors to consider, including whether to replace your conventional water heater now or wait, and the cost of both installation and long-term operation.
Electric vs Gas Tankless Water Heaters
Electric Tankless Water Heaters:
- Installation Complexity: Installing an electric tankless heater may require significant electrical upgrades if your current system can’t support the necessary power load. These heaters often need a dedicated circuit and high amperage.
- Efficiency: Electric models are highly efficient, typically around 99%, converting almost all their energy input into heat. However, they may have limitations in meeting high hot water demands in larger homes.
- Cost: The upfront cost is usually lower, but upgrading your electrical panel can make installation more expensive, particularly if your distribution box is far from the installation site.
Gas Tankless Water Heaters:
- Installation Needs: Gas models require proper venting (direct vent or chimney) and may need a gas line installation if one isn’t already present. This can increase the complexity and cost of installation.
- Efficiency: Gas tankless units are typically 80–95% efficient due to energy loss in venting, but they excel at providing higher flow rates, making them more suitable for homes with greater water needs.
- Power Dependence: While some gas models need electricity for ignition, they’re generally less dependent on power than electric models.
Should You Wait Until Your Current Water Heater Needs Replacement?
Deciding whether to switch now or wait until your conventional water heater fails depends on several factors:
Age and Condition: If your current water heater is nearing or surpassing its lifespan (10–15 years for tank models), replacing it proactively can prevent sudden failures and water damage.
Signs of Imminent Failure: Leaks, rusty water, or inconsistent heating are signs that your system may be close to failure. Upgrading now allows you to research and choose a tankless model without the stress of an emergency replacement.
Cost vs. Urgency: Emergency replacements are often more expensive and limit your choices. Transitioning on your schedule allows you to consider your options carefully and potentially save on costs.
Cost of Purchase and Operation
Upfront Costs:
- Electric Tankless Heaters: $500–$1,500 for the unit; installation can range from $500–3,000 depending on electrical work needed.
- Gas Tankless Heaters: $1,000–2,500 for the unit; installation costs $1,000–5,000 due to venting and potential gas line work.
Operational Costs:
- Electricity: Depending on your rate (e.g., $0.15/kWh), the cost to run an electric tankless heater for a year can range from $500–1,200.
- Natural Gas: At an average of $1.00/therm, annual operating costs are often $300–800.
10-Year Cost Chart:
| Type of Heater | Upfront Cost | Annual Operating Cost | 10-Year Total Cost |
|---|---|---|---|
| Electric | $1,500 | $1,000 | $11,500 |
| Gas | $3,000 | $600 | $9,000 |
4. Considering Smaller Point-of-Service Water Heaters
Another alternative is using smaller, point-of-service water heaters such as under-sink models. These systems can provide instant hot water directly at the tap, reducing wait times and minimizing water waste. Key benefits include:
Pros:
- Energy Savings: Heating only what you need, when you need it, can reduce utility costs.
- Ease of Installation: Smaller units are simpler to install compared to whole-home tankless systems.
Cons:
- Limited Capacity: These systems are best for sinks or small-scale use; they aren’t suitable for heavy household demands like showers or dishwashers.
- Multiple Units: If you need hot water at various locations, multiple under-sink units may be required, adding to overall cost.
Final Thoughts
Switching to a tankless water heater—whether electric or gas—can offer efficiency, space savings, and convenience. Carefully assess your home’s current infrastructure, energy rates, and hot water needs before making the change. And remember, installing smaller point-of-service water heaters can be a valuable solution for targeted use while considering an upgrade.