In terms of energy consumption, your water heater is second only to heating and cooling your home. Heating water consumes about 20 percent of your total energy use, according to the U.S. Department of Energy. There are different types of water heaters and different energy sources to operate them. Water heaters can be either storage or tankless and can be fueled by either electricity or gas.
Conventional Water Heaters
Conventional water heaters contain tanks that hold from 30 to 50 gallons of water. They are called "storage water heaters" because they store hot water until it's needed. Energy is needed to maintain the temperature of the water in the tank at the desired setting. When you turn on the hot water, heated water is drawn from the storage tank to your faucet.
Tankless Water Heaters
Tankless water heaters do not have storage tanks, as the name implies. Instead, they heat water only when it is needed. When you turn on the hot water, cold water travels through the heating unit where it is instantly heated before traveling to your faucet. These units are also known as "instantaneous" or "on-demand" water heaters. Tankless models can deliver 2 to 5 gallons of heated water per minute.
Energy Sources
You can use a variety of energy sources to operate either a tankless or storage water heater. Electricity and natural gas are the most common types. You can choose either an electric or gas-powered tankless water heater. Each has advantages and disadvantages.
Advantages
Tankless water heaters, whether electric or gas-powered, offer the advantage of improved efficiency. You save energy with tankless units because you heat water only when you need it. Storage water heaters require ongoing energy use to maintain proper temperatures. Gas-powered tankless units provide a higher flow rate than electric ones, and gas is a less-expensive energy source than electricity. On the other hand, electric models are less expensive to purchase and install. Electric tankless water heaters also provide greater efficiency. They are 98 percent efficient, compared to the 80 to 85 percent efficiency achieved by gas units.
Disadvantages
While gas is less expensive than electric as a fuel source, gas-powered tankless units lose efficiency due to the continuously burning pilot light. The pilot light on storage models is more efficient because it helps keep the water in the tank hot. This advantage is lost on tankless units.
Other Considerations
While tankless units can generate energy savings, they may not be able to keep up with demand. Your tankless unit may not be able to supply enough hot water if you simultaneously take a shower and run a dishwasher or washing machine. To avoid this, consider installing a second tankless water heater or adjust your hot-water usage accordingly.
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