French Broad Electric Membership Corporation

General Manager's Report Jeff Loven

Carefully Consider “On Demand” Hot Water Heaters
April, 2008

Several of our members have asked about the new electric tankless hot water heaters. They question if the savings outweigh the additional cost of the unit and its installation. For those unfamiliar with these tankless, or on-demand, water heaters, the concept is relatively simple. The cold water is heated only as you use it, whereas a conventional hot water heater typically keeps 40 or more gallons of water at 120 degrees temperature all the time.

There are a few benefits to these systems. They are small in size, so they can be installed in various places throughout the house. Strategically placed, they can give you almost instant hot water at your faucet. They can also provide unlimited hot water when properly sized.

However, there are some facts to consider before purchasing an electric tankless hot water heater. First, these devices require a tremendous amount of instantaneous electricity. A conventional hot water heater has an electrical demand of about 4.5 Kw while the tankless hot water heater can require anywhere from 12 to 28 Kw. These units can easily double or triple a home’s electrical demand and cause electrical service issues due to excessive voltage drop. Heavier wire and multiple circuits are used when installing these units due to the amount of electrical current they pull, which adds significantly to the installation cost. If a larger transformer or service drop is needed, most utilities pass these costs onto the customer. They are also limited as to how much hot water they can produce. Running a dishwasher, taking a shower, and washing a load of whites in hot water at the same time is not ideal. Furthermore, as these units become more common, they will drive the overall demand for electricity up. This would require that utilities add more peak generation facilities.

In addition to the electric version, there are also models that operate on propane or natural gas. These units obviously do not cause the same issues associated with high electric demand but can require larger gas lines and vents. Any of these units can reduce the amount of water that is heated in a given month, and savings have been estimated as high as five percent of your total energy bill.

If you are in the market for a new hot water heater and are considering an on demand unit, we recommend you check with your electric or gas supplier in advance to make sure you have the facilities sufficient to operate these devices properly. There could be necessary upgrades that would add significantly to the overall installation costs.

Thank You,
Jeff Loven
Email: jeff.loven@frenchbroademc.com

Back to Current Manager's Report