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It's been over six months now since we got a tankless water heater installed, so we have a little hindsight now.  While we had somewhat of a mixed experience, we are generally happy that we chose it.

For those who are unaware, tankless or "on-demand" water heaters work by heating your home's water when you turn on the tap, rather than keeping gallons of water at the desired temperature all the time.  They are much more efficient overall, which can result in a lot of savings, since water heating is a big part of one's utility bill.  While they have been popular in other countries for years, they are just starting to be noticed in the United States.

Here are the main issues... 

Pros
  • Cost savings in natural gas usage.
  • $300 federal tax credits are available for them starting this year.
  • You can never run out of hot water.
  • Environmentally sound.
  • Much longer lifetimes than conventional water heaters.
  • Much smaller than a regular tank heater.
  • Doesn't have the same risk as a tank heater busting and causing significant water damage.
  • Don't have to shut off for vacations (but very easy to shut off if you're paranoid).
Cons
  • Takes longer for hot water to reach the tap, resulting in wasted water.
  • Much more expensive than a conventional heater (we paid about $840 for the heater itself).
  • Requires a Category III venting system (stainless steel), which is very expensive.
  • Louder than a tank heater, but not a big deal.
  • The heater will only remain on if you have a big enough flow of hot water.  Usually this isn't a problem, but we've gone below the threshold if we have our low-flow showerhead on its lowest setting and the water not particularly hot.
  • The amount of hot water generated at once is limited.  I don't think we've experienced this problem, but running the dishwasher, washer, and shower at the same time might result in one of them getting cool water.
  • Uses more gas at a time, which may necessitate a thicker gas pipe.  We just used the existing one and haven't had any problems, but this may be limiting its capacity.
We got the Takagi T-K2, and had it installed by a local plumber.  A friend of mine had one and had a good experience with it (after returning a lower-capacity T-K1).  I was looking for something with high enough BTUs, high efficiency, and a low minimum flow.

The biggest gotcha (and surprise) by far was the venting.  Technically, you may be able to get away with using normal venting, but tankless water heaters are unique in having code requirements for better venting.  Apparently the issue with the tankless heaters running hotter than tank heaters, which can result in condensation in the venting.  Because we have a Victorian house with a high roof, this cost us a lot more money.

We did gain a closet out of the deal, though.  Particularly when we found the cost of the venting, we decided to move the heater into our attic, which freed up a whole closet for storage (Victorians also tend to have limited storage space).  The heater came with a  remote we can use from our main living area.

Overall, I'm glad we went for it...





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