Tankless or On Demand Systems
Tankless or on-demand water heaters are probably one of the most over hyped products on the market. Many distributors of these units claim that the consumer will have up to 60% savings. This is a completely ridiculous statement. These types of claims prompted the government to do a thorough study to determine their realistic performance. What they found was an 8 to 20% savings pending water use (see the below cost breakdown and the actual report at (www.nrel.gov/docs/fy03osti/32922.pdf). So for a standard unit with installation ($1,000) the payback is 25+ years.
In addition to the performance issue the gas units have small copper heat exchangers. According to the manufacturers (and we couldn't agree more) if the init is placed in a scaling environment it should be periodically flushed with an acid solution. Also the electric units are actually illegal in many cities due to their extreme voltage surge. The installation cost is usually very expensive in that the electric units require very large breakers (50 amp plus) and the gas units require special venting systems.
Aside from the above issues they do take less space and provide endless hot water (3-6 gallons per minute). They can be used in conjunction with a solar system as long as the tankless system has a sensor to determine the incoming water temperature.
Most experienced professional plumbers recommend the SETS, Rennai or Takagi systems.
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