August, 2013
Inspection News and Views from the American Society of Home Inspectors

Tankless Water Heaters


Tankless water heaters have been used extensively
in Europe and other parts of the world and are increasingly gaining popularity in North America. For some homeowners, using a tankless water heater is a decision based on being environmentally conscious, while others are more focused on cost savings from reduced energy use. In certain homes, tankless water heaters are the only viable option due to limited space available for mechanical equipment. Whatever the reason, tankless water heaters are here to stay. As inspectors, you should be familiar with the basic operation of these systems.

As the name suggests, tankless water heaters have no storage capacity. They have a powerful heater that quickly heats the water when it senses flow. There are electric tankless heaters available, but most are natural gas or propane fired systems with a burner, heat exchanger, venting system and controls. The burner is ignited when it detects water flow. The heat exchanger heats the water as it passes through.

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Tankless unit with cover removed— heat exchanger, burner and gas valve are visable

In residential applications, there is sometimes one such heater for each fixture that uses hot water. These use electricity, and some lower wattage units are designed to merely warm the water for hand washing. These are usually referred to as “point of use” heaters.

No Stored Water
In general, tankless water heaters cost less to operate than conventional water heaters because there is no reservoir of idle hot water. However, other factors need to be considered such as initial installation costs, maintenance issues and life expectancy.

Hot Water Does Not Run Out

Another advantage is that you will typically never run out of hot water, provided the system has been sized correctly. With a conventional tank, you can draw water off more quickly than the water can be reheated. Most of us know the feeling of running out of hot water in the middle of a shower. That will not happen with a properly sized tankless water heater.


Small Size And Location

A third advantage of tankless water heaters is that they are much smaller than conventional water heaters and take up much less room in the house. Most are designed to hang on a wall, and many vent their exhaust products out through the side wall of the home. Some vent through the roof. In warm climates they are often mounted on the exterior of the house. Exterior models that vent exhaust from the front of the heater are available. Because they are small, they can be located in various parts of the home. Many larger homes have heaters in different areas. The advantage is that heaters close to faucets deliver hot water faster.

High Efficiency Systems
Tankless water heaters are typically more efficient than conventional water heaters, using modulating burners, direct venting and/or condensing combustion systems. Not only do we save money by not keeping 40 gallons of water hot all the time, we get more heat out of every cubic foot of natural gas we burn. However, keep in mind that many direct- vent and condensing standard water heaters are also more energy efficient than conventional water heaters.

Mixing or Tempering Valve
Many tankless water heaters include a mixing or tempering valve and a means of setting the maximum water temperature to avoid scalding. The tempering valve mixes some cold water with the hot water, leaving the unit to deliver hot water at a safe temperature to the faucets in the home. Other heaters let you set the water temperature only up to a maximum limit that is safe.

Remote Control
Some tankless systems include a remote control that can be used to monitor the performance of the system, view error codes and change the desired water temperature.

Other Uses
Tankless systems can also be used to heat the entire home, as part of a forced air or radiant hot water system. In cold climates, tankless systems are sometimes used to heat driveways on homes. This saves a lot of snow shoveling!

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Although smaller than conventional water heaters, tankless systems are considerably more sophisticated, and more expensive than conventional water heaters. Tankless water heaters make a lot of sense and have been used for several decades in Europe. They are newer in North America, and there have been some issues in satisfying North American lifestyles.

Typical Unit.jpg


Let’s look at some of the issues with tankless water heaters. In most cases the implication is not enough hot water. The basic inspection strategy is to operate at least two hot water faucets simultaneously to ensure adequate delivery. It is good to run the water for at least two minutes and include a bathtub faucet because of the good flow rate. Some complaints include:

1. Fuel supply problems
2. Scale buildup
3. Longer wait
4. Limited flow
5. Minimum flow rate problem
6. Cold-water sandwich (burst of cold water in the middle of running hot water)
7. Relief valve problems
8. Filter problems
9. Reliability and maintenance issues

We won’t be able to discuss all of these in detail, but let’s go over the two common complaints: Longer wait and maintenance issues.

Longer Wait
When a hot water faucet is turned on, it may take longer to get hot water with a tankless water heater than a conventional system. Tankless water heaters are typically activated by flow through the hot water side of the system. A hot water tap opened just a little bit may not create enough flow to turn the water heater on. The flow through the hot water side of a system with a tankless heater may be lower since, instead of the water passing through a large tank, it passes through a coil wrapped around a heat exchanger. This creates a more restrictive path for the water. More friction loss means less flow. This can be a nuisance but is not a critical problem. Better tank locations and multiple tanks can help resolve the issue. On-demand hot water circulating systems can be added to provide hot water more quickly.

Reliability and Maintenance Issues
Conventional water heaters are relatively simple and inexpensive. Tankless water heaters are more expensive and more complex. More frequent repairs and higher maintenance costs may be expected. Some home inspectors advise customers to expect more maintenance issues with tankless water heaters and recommend a service contract that includes regular maintenance.

Despite the problems that homeowners may face with tankless water heaters, there are many benefits such as size, energy efficiency and reduced energy costs. We can expect these systems to continue to improve and remain a popular option for many homeowners. Due to their complexity and importance to the occupant, home inspectors need to gain a good understanding of how they work and what things can go wrong.

We have briefly introduced the topic of tankless water heaters. More information is in the ASHI@HOME training program, which details more of the conditions noted, implications and strategies for inspection. 

This article is from the ASHI@Home education system, a comprehensive distance-learning program developed by Carson Dunlop with ASHI. Individual modules are approved for ASHI CE credits. Choose the printed version or the online learning program.
Call 800-268-7070, Ext. 251, to learn more.