What’s A Tankless Water Heater

A tankless water heater is exactly as it sounds — a water heater that heats water without the use of a tank. A traditional tank type water heater is a 40-, 50- or sometimes 75-gallon tank of water, with a burner at the bottom, that heats water and keeps it hot and ready to use inside a tank. The burner keeps the water in the tank heated to your desired temperature 24 hours a day.

A tankless unit heats water as you use it. There’s no storage. When you turn on a hot water faucet, water passes through a heat exchanger inside the unit, and is heated and delivered to the faucet. It doesn’t have to preheat water or keep it ready for you. It simply heats the water as you use it and turns off when you turn the faucet off. There is no energy wasted. It’s only functioning when you are using hot water.

Why Are Tankless Water Heaters Better?

Energy Efficiency

Currently, standard tanks have an energy efficiency rating of about 0.60. What this means is that 60% of the heat or energy produced is used to heat the water. The other 40% is wasted through the exhaust vent coming out of the top of the tank and through the roof.

On the tankless model that we install, the energy rating is 0.98. We are only wasting 2% of the energy that is consumed by heating water. A good estimate is that this efficiency will save a family of 4 about $15 to $20 a month on their gas bill, depending on their hot water usage and the size of tank we are replacing. ONG currently offers $250-$850 rebates for replacing a tank-type water heater with tankless.

Life Expectancy

On average, the typical tank fails in 8 to 12 years. By “fails,” I mean leaks. Depending on how it is installed, this could mean serious problems for your home due to the damage water leaking from a tank. The tankless units we install have a life expectancy of about 20 years. So you can expect to replace about 2 tanks during the life of one of our tankless units.

Space Savings

A 50-gallon gas-operated water heater is currently approximately 5 feet tall and a little less than 2 feet wide. The tankless unit we install is approximately 17” wide and 28” tall and hangs on the wall. They can be installed almost anywhere and will free up your closet, for what we all have way too much of — more junk.

Endless Hot Water

Because of how a tank type water heater is designed, it can’t heat water fast enough to keep up with use. Once you deplete, the pre heated amount of water, you’re out of hot water for 30 minutes or longer. Not only that, you don’t really have as much hot water as you think, since for every gallon of hot water you use out of the tank, the tank is filling again with cold water.

So a 40 gallon tank will provide you with about a 10 minute shower at your desired water temperature, a 50 gallon tank will provide you with about a 12.5 minute shower. Since a tankless unit heats water as you use it, you will never run out of hot water, assuming your tankless is sized correctly for your needs.

For those of you that are more detail oriented, the tankless unit that we install will provide endless hot water up to about 7 gallons per minute in the summertime and about 5 gallons per minute in the winter. That’s just shy of the equivalent of three showers running simultaneously in the summer and two in the winter.

But Tankless Water Heaters Are Expensive, Aren’t They?

We have talked about all the benefits of a tankless system. The obvious drawback to going tankless is the cost to install when compared to a typical tank-type replacement.

It’s an upgrade in every way when compared to a tank type water heater, and does cost a bit more to install instead of a tank. Look closely and you’ll see that the money will certainly be recouped over time.

Let’s compare the cost of installing a tankless water heater versus a 50-gallon water heater, during an average install in the Tulsa area.


Typical Cost

Tankless Water Heater : $3,600

Tank-type Water Heater : $1,500

What you should know though is that before you replace a tankless water heater again, you will surely have replaced the tank-type unit once, if not twice. In fact, expect to do this 1.5 times on average.

This means that you’ll spend another $2,250 replacing the tank-type unit, before you replace the tankless. That’s using today’s average install price, a figure which will most likely go up over time.

Plus when you replace a 50 gallon gas water heater with a tankless unit, you’ll get an ONG rebate of $250.

You’re also averaging about $20 a month savings on your gas bill, over the course of the life of the tankless that’s $4,800!

So over the life of the tankless unit that cost you $3,600 to install originally, you’ll save $4,800 on your gas bill, plus you’ll receive an immediate rebate of $250, AND you won’t have to take a cold shower or wait for hot water to heat up again.

Of course you can opt to spend $1,500 today, save nothing on your gas bill, and pay another $2,250 over the next 20 years replacing it. (Hopefully there’s no damage when it leaks.)