CEC Energy Newsletter January 2007 Water Heaters Source: Energy Solutions Resources Question: In terms of energy use and costs, how do on-demand (electric instantaneous) tankless water heaters compare with electric storage systems for whole house water heating? Answer: Contemporary electric storage water heaters are efficient. The fully submerged electric resistance heater provides 100 percent efficient conversion of electrical energy to heating of the water. Heat loss from the hot water in storage does decrease the overall efficiency of the equipment. This is reflected in the Energy Factor (EF) of the equipment. Equipment with an EF of .88 loses 12 percent of the heat energy from the storage tank. A better-insulated storage tank may have an EF of .96, losing only 4 percent of the heat energy from the storage tank. Instant electric water heaters provide increased efficiency by eliminating the loss associated from water in storage. Typical loss from the storage tank is from 4 to 12 percent—this is the energy savings that would be acquired if a 100 percent efficient instant water heater were used instead of an electric storage water heater. However, many instant water heaters do not perform at 100 percent efficiency. On some models the heating coil is not submerged in the water being heated. Examination of the electrical input verses the hot water output shows that an efficiency of 94 to 96 percent can be expected of some models. Comparing Energy Costs The most recent and best-designed test we know of that compares the costs is reported in "Tankless vs. Tank Type Storage Water Heater Efficiency. Comparison Testing," PM Engineer, January 2005. They conclude that a tankless heater has a surprisingly small energy and cost advantage over a storage heater in a typical home application for a family of four with two bathrooms. This actually makes sense, because the standby losses are not that great with four people using water every day. A better application for a tankless heater would be for a single person or a couple, or better yet, a vacation home or somewhere where water would be sitting in a tank heated for long periods of time. Then the payback for a tankless heater would look much more attractive. Impact on Peak Demand Widespread use of instant electric water heaters for whole house water heating may have a significant impact on peak load for the utility. To provide a flow rate of one gallon of water with a temperature rise of 61 degrees F will require an input rating of 9 kW. More than one instant water heater may be needed if larger volumes of hot water are required. This may increase the peak kW even more. (Because of this, one option to consider may be a gas-fired instantaneous system.) A 50-gallon storage water heater typically has a peak input rating of 4.5 kW. While they cannot instantly recover all of the heat lost from a large volume draw, the storage capacity serves to provide adequate service. A 50-gallon tank submitted to a draw of 1 gallon per minute for 20 minutes will result in a delivery temperature drop of approximately 10 degrees. The need for short term, large volume draws does not require additional electrical input. This allows the water heater to provide serviceable results with only 4.5 kW of input.