How Do Tankless Water Heaters work?
When a hot water faucet is turned on, a flow sensor in the heater detects that the water is moving and turns on a bank of heating elements or modules. The water passes over the heating modules, usually in series, and exits the heater at the desired temperature. Since tankless water heaters do the entire job of a conventional tank-type water heater in just seconds, they require very high powered heating elements. In more sophisticated units, a collection of sensors and a microprocessor will control the output water temperature to ensure that a precise output temperature is maintain during operation. When the water is turned off, the unit turns off completely and consumes absolutely no power again until a hot water faucet is turned on. While the basic premise is the same, the performance difference between a lower quality unit and the best units on the market is dramatic. Selection of a model appropriate to your application is very important.
As noted above, not all tankless water heaters are created equally. Careful selection of both brand and model is important to ensure that the heater will meet the requirements of your application. The most important distinction between models on the market today is if they use power-modulation technology (sometimes referred to as flow modulation) and thermostatic controls. These technologies are necessary to ensure that the output water temperature of the heater remains constant despite changes to the incoming water temperature, pressure, or flow rate. Without this technology, the water temperature can fluctuate significantly especially when a second faucet is turned on when the unit is running, a toilet is flushed causing the pressure to drop, or if you get your water from a well (the water pressure in your expansion tank changes). Without this technology, it can also be impossible to properly regulate temperature to a safe, usable temperature when trying to find a power setting that accommodates both your low flow rate and high flow rate faucets. Unfortunately, many manufacturers advertise that they use this more advanced technology, but in reality, they do not, or if they do, they use a rather crude form of the technology. The good news, is that a small number of units on the market have the necessary flow-based power modulation and thermostatic control technology to maintain a precise output water temperature in all situation.
What else should you know about selecting an on demand water heater?
Selecting the right instantaneous water heater for your needs is a function of the technology as discussed above, the maximum flow rate of water you will demand, and your incoming water temperature. Applications which require higher flow rates and/or that are in areas of colder incoming water temperature (northerly regions), will require a more powerful model.
Since on demand water heaters have to apply a massive amount of heating power to the water instantly, they have very large heating elements. Correspondingly, they require a larger electrical service than most conventional heaters, so it is important to make sure that your home has sufficient electrical service to supply its needs.
The first inclination of many homeowners is to purchase a gas tankless water heater if they have had a conventional gas tank-type water heater in the past, or if they are building a new home, since the common belief is that gas is cheaper. When it comes to tankless water heaters, this is often not true, especially when all the costs are taken into account. Electric tankless water heaters cost only a few dollars per month more than a gas tankless heater to operate based on today's energy prices, they last longer, have better warranties, are more thermal efficient (98%+ vs. 80-85%), take up less space, require less maintenance, and cost dramatically less to buy and install, as compared to a gas tankless water heater. Gas tankless heaters are extremely expensive to install due to the onerous venting, fresh air supply, and gas line requirements, not to mention their higher original product cost. As well, it important to remember that tankless water heaters can last well over 20 years - since natural gas prices are rising at a much higher rate than electricity prices, it is widely expected that a tankless electric heater will actually be cheaper to operate than a comparable gas unit in just a few short years.
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