Listen and Learn!
<iframe style="border: none" src="//" height="90" width="640" scrolling="no" allowfullscreen webkitallowfullscreen mozallowfullscreen oallowfullscreen msallowfullscreen></iframe>

This comes courtesy of our friends at Build Your House Yourself University hosted by Michelle Nelson, informal residential construction student.  She shares information on home building practices as well as interviews with experienced contractors and industry experts to bring you tips, tricks, and trends in home building.

Did you know that most water heaters use more energy than all other household appliances combined? According to the US Dept of Energy, water heaters account for almost 17% of a home’s energy use.  Other sources say it’s up to 30% of a home’s energy.  This week’s mini-lesson will help you decide if a conventional, storage tank water heater or a tankless water heater is the better choice for your new home.  And the choice is probably not as cut and dry as you think.

Conventional, storage tank water heaters are still the most common type of water heaters found in new homes in the US. But tankless water heaters are steadily gaining popularity.  We’ll go over the basic information about how conventional water heaters and tankless water heater work, plus the pros and cons of each system.

Before I go any further I want to give a shout-out and a big thank you to JLuv79 who recently wrote a very nice review in iTunes.  He began the review by saying “awesome podcast for new rehabbers.”   Then he continues “Last year I started investing in real estate and renovated two houses.  I quickly learned I needed to get up to speed on everything construction to make my future rehabs less stressful.  This podcast is awesome!  Thanks, Michelle! You rock!”  Well, JLuv79, you rock too!  I really appreciate you for taking the time to give me some positive feedback.  Thank you for doing that.

What’s interesting is that I started this podcast for those of us who are planning on building our own personal homes.  But what I’m finding is that new builders and new house flippers and rehabbers are also listening to the podcast. I love that!  

Alright, moving on to this week’s pro term.


Recirculating system:

A recirculating system, also called a recirculating pump, keeps the water in the hot water supply pipe hot, so that when you turn the tap on, you get instant hot water.  The recirculating pump returns water in pipes to the hot water heater.

Homes with long distances between the water heater and the faucets can have a long wait for hot water.  You turn the hot water tap on, and you might have to wait a minute or, maybe even 3, before you get hot water. This is inconvenient and it wastes water and energy.  To overcome this problem, a water recirculation system can be added to conventional or tankless hot water heaters.

Next up is this week’s mini-lesson.


A conventional storage water heater heats water and stores that hot water in its tank. The hot water sits in the water heater tank until it’s ready to be used. Most storage hot water heaters hold from 20 to 100 gallons of hot water. When the hot water tap is turned on,  hot water is released from the top of the tank.  Cold water then enters the bottom of the tank so it can be heated. That way the tank is always full.

You can purchase a gas or electric conventional water heater, or one that’s fueled by propane or oil. Heat pump water heaters and solar water heaters are also available.

Water is constantly being heated with a conventional hot water heater, so energy is always being used, and wasted, even when the hot water is not being used. This is called standby heat loss.

Standby heat loss is one of the main disadvantages of conventional hot water heaters and is the main reason that most conventional units are less energy efficient than tankless water heaters.

Another disadvantage of conventional water heaters is that you can run out of hot water, especially if you use lots of hot water at one time.  Because of this, you might be tempted to buy an oversized unit so you’ll always have plenty of hot water.  But be aware that those oversized tanks have a higher purchase price and greater energy costs because they have greater standby heat losses.


Choose a properly sized unit for your family’s needs by determining your home’s first hour rating, or FHR. The first hour rating is how much hot water the heater will deliver during the busiest time of day for a water heater, which is usually the first hour of the day. The FHR is always on the water heater’s yellow EnergyGuide label.

But to calculate the FHR yourself:

– Take the total number of bedrooms, then add one (I think this assumes one person per bedroom plus one extra person in the master bedroom)

– Multiply that number by 12 gallons

So for a 4 bedroom house, you’d get:


times 12 gallons

equals 60 gallons.

The FHR for a 4 bedroom house (which is usually a 5 person household) is 60 gallons, the minimum FHR needed.

After you determine the appropriate FHR, you look for the unit’s energy factor, or EF, and choose a unit with the highest EF.

Proper installation and maintenance of your water heater will allow for optimal energy efficiency.  Therefore, it’s best to have a qualified plumber or heating contractor install your water heater.

Periodic water heater maintenance can significantly extend your water heater’s life and minimize loss of efficiency.  The owner’s manual will have specific maintenance recommendations which might include:

  1. Flushing a quart of water from the storage tank every 3 months
  2. Checking the temperature and pressure valve every 6 months  
  3. Inspecting the anode rod, which magnesium or aluminum rod that is suspended in the tank to help fight internal corrosion and rust.  The anode rod should be inspected the every 3-4 years, and replaced, if necessary.

These maintenance measures can easily be done by homeowners.

When choosing a storage water heater, look for one that has a heavily insulated tank.  This will significantly reduce both standby heat losses and annual operating costs.  Some tanks have up to 3 inches of insulation.  Look for models with tanks that have an R-Value of R-12 to R-25.  


Choosing a unit with a higher R value will decrease standby heat loss, but to completely avoid standby heat loss, you’ll have to choose a tankless water heater.


Tankless water heaters provide hot water only as it’s needed and do not store hot water in a tank. When a hot water faucet is turned on, cold water travels through a pipe into the tankless unit. The water is then heated by the tankless heater by either a gas burner or an electric element.

In contrast to conventional storage water heaters, there are no associated standby energy losses. And for that reason, tankless water heaters can save you money on your utility bills.

Many online sources say that the savings will average $70 to $80 per year.  And ENERGY STAR® estimates that a typical family can save $100 or more per year with an ENERGY STAR qualified tankless water heater.

Tankless hot water heaters are 8-35% more energy efficient than conventional storage tank units. But the more hot water your household uses, the less efficient the unit will be.

Tankless water heaters cost from $1200 to over $2000 installed, as compared to conventional water heaters which cost several hundred dollars installed.

The gas tankless units cost more than electric units. Plus, gas units cost more to install since gas tankless water heaters require vents.

Proper installation and maintenance of a tankless water heater can optimize its energy efficiency.  So, as with a conventional storage tank unit, it’s best that a qualified plumber or heating contractor install your tankless unit.

Tankless water heaters can deliver a constant supply of hot water, so you’ll never run out of hot water. However, there are some limits on how quickly the hot water will flow out of tankless units.  This is especially true for cheaper units that you might buy at a big box store.

Typically, tankless water heaters provide hot water at 2 to 8 gallons per minute. Gas-fired tankless water heaters allow for higher flow rates than more budget friendly, electric units. Sometimes, though, even larger gas models have trouble supplying enough hot water for simultaneous, multiple, hot water tasks for a large family.   

Here’s  a list of the average amount of water needed for some common household appliances and fixtures.   Think about how many of the following your family might use at the same time.

A washing machine  uses 1.5 to 3.0 gpm

A shower uses 1.0 to 2.0 gpm

A bathroom faucet  runs at a rate of 0.5 to 1.5 gpm

Dishwasher uses  1.0 to 2.5 gpm

Kitchen faucet  runs at a rate 3.0 to 9.0 gpm

So, simultaneously taking a shower and running the dishwasher might stretch a poor quality tankless water heater to its limit. And there are limitations even if the tankless hot water heater is assigned to just for one big task, like filling the bathtub.

I’ve read complaints from homeowners that say that it takes 10 to 15 minutes for their tankless unit to fill their bathtub. If you’re someone who takes only an occasional bath, that’s not such a big deal, but if you take several baths per week, you might not want the long fill time.

To solve the slow flow rate problem, there are several things you can do.  You can choose, a high-quality unit which typically has a better flow rate.  You can have two or more tankless water heaters installed, connected in parallel for greater hot water flow. Or you can install separate, point-of-use tankless water heaters for different appliances. or for different parts of the house that use a lot of hot water.  For example, you could have dedicated units for the washer, for the dishwater and for the master bathroom.  But keep in mind that purchasing several tankless units is a convenient solution, but it’s also pricey.

Here’s something that most people don’t know about tankless units:  They require annual maintenance which averages $150 to $200 per year. Usually, calcium buildup needs to be removed from the tankless units because the calcium can decrease efficiency and restrict water flow.  And if you fail to get that annual maintenance, some manufacturers will void the unit’s warranty.

But with the proper maintenance, most tankless water heaters have a life expectancy of more than 20 years, as compared with conventional water heaters which last 10-15 years.

Tankless units have the added advantage of being very small. They can be put in many places that won’t allow conventional hot water tanks. The average tankless hot water heater is about 28 inches tall by 20 inches wide by 10 inches deep.

The biggest disadvantage of tankless water heaters is the initial cost of the purchase and installation, which is higher than the total cost of conventional water heaters. Even with the savings on your utility bills, it will take about 20 years, which is the lifespan of the product, for a homeowner to recoup that initial cost.  And don’t forget, you’ll have to pay the cost of yearly maintenance.

Although tankless water heaters don’t have the standby heat losses associated with storage water heaters, gas tankless water heaters can waste energy if they have a constantly burning pilot light.  So you might consider models that have an intermittent ignition device (IID) instead of a standing pilot light.

Homeowners who expect tankless hot water heaters to provide instant hot water at every faucet will be disappointed. Most homes have many feet of piping between the water heater and the faucets, so it may several seconds to up to 3 minutes for hot water to come through the tap.

Changing from a conventional to a tankless water heater will not improve the speed of the delivery of hot water unless you do one of two things:  1. move the water heater closer to the faucet or 2. install a recirculating system.   Because of their small size, tankless units it can easily be located closer to fixtures and appliances, which decreases the hot water lag time.

Another con of tankless units is that during power outages, tankless water heaters will not work. Unlike conventional water heaters, there is no water sitting in a tank that can serve as a backup water source in emergency situations.  

Cold water sandwiches are another downside to tankless water heaters.  A cold water sandwich is when your faucet starts by putting out hot water, then it quickly, and unexpectedly, switches to cold water before switching back to hot water.  This shouldn’t happen often and is really not a big issue if you’re washing your hands, but it could be quite a shock if you are taking a shower.

The final con that we’ll talk about today is that homeowners with hard water should install a water softener along with their tankless water heater in order to avoid problems that can occur from calcium buildup.  Ironically, although installing a water softener can extend the life of the tankless water heater, some brands will void or shorten their warranty if you install a water softener. So read the fine print and ask your installer about what exactly will affect the unit’s warranty.

Choosing what type of water heater is best for your home and family will depend on many factors:  your budget, how long you plan on staying in your home, how much hot water your family uses simultaneously, how many baths you take per week, and how hard your water is.  Whether you choose a conventional or tankless unit, opt for one that is appropriately sized and very energy efficient.  If you can’t decide what the best choice is, you might want to try a hybrid approach where you combine a conventional hot water heater with a smaller point-of-use tankless unit.

Well, that’s it for this week. I hope you learned as much as I did.  If you like the show, you can subscribe to the podcast in iTunes so new episodes will automatically be downloaded to you.  And if you know someone who’s going to build or remodel a house, you can share this episode with them.  

Before we go, let’s do a couple of quiz questions:


Most conventional storage water heaters will last:

  1. 1-3 years

  2. 2-5years

  3. 10-15years

  4. 20-25 years

The answer is C, 10-15 years is the life expectancy of most conventional water heaters.  Tankless water heaters are said to last 20 years or so.

True or False— Tankless water heaters are maintenance free.

The answer is false.  Most manufacturers’ warranties require yearly maintenance for tankless water heaters. Because calcium can build up in tankless units, that calcium must be removed on a yearly basis to maintain the unit’s efficiency.  That yearly maintenance should be done by a professional can averages $150 to $200 per year.

Please remember that the purpose of this podcast is simply to educate and inform.  It is not a substitute for professional advice.  The information that you hear is based the only on the opinions, research and experiences of my guests and myself.  That information might be incomplete and it’s subject to change, so it may not apply to your project. In addition,  building codes and requirements vary from region to region, so always consult a professional about specific recommendations for your home.

Thank you for listening. I hope you’ll Come back next week for the another episode of  Build Your House Yourself University (BYHYU).