Inspector's Guide to Tankless Water Heaters
by Alan Carson, Carson Dunlop

In residential applications, there is sometimes one such heater for each fixture that uses hot water. Some lower wattage units are designed to merely warm the water for hand washing.

No Stored Water
Tankless water heaters cost less to operate than conventional water heaters because there is no reservoir of idle hot water.

Hot Water Does Not Run Out
Another advantage is that you will never run out of hot water. With a conventional tank, you can draw water off more quickly than the water can be reheated. Most of us know the feeling of running out of hot water in the middle of the shower. That will not happen with a properly sized tankless water heater.

Small Size and Location
A third advantage of tankless water heaters is that they are much smaller than conventional water heaters and take up much less room in the house. Most are designed to hang on a wall, and many vent their exhaust products out through the side wall of the home. Some vent through the roof. In warm climates they are often mounted on the exterior of the house. Exterior models that vent exhaust from the front of the heater are available. Because they are small, they can be located in various parts of the home. Many larger homes have heaters in different areas. The advantage is that heaters close to faucets deliver hot water faster.

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High Efficiency Systems
Tankless water heaters are typically more efficient than conventional water heaters, using modulating burners, direct venting and/or condensing combustion systems. Not only do we save money by not keeping 40 gallons of water hot all the time, we get more heat out of every cubic foot of natural gas we burn.

Mixing or Tempering Valve
Many tankless water heaters include a mixing or tempering valve and a means of setting the maximum water temperature to avoid scalding. The tempering valve mixes some cold water with the hot water, leaving the unit to deliver hot water at a safe temperature to the faucets in the home. Other heaters let you set the water temperature only up to a maximum limit that is safe.

Typical gas fueled tankless water heater

Other Uses
Tankless systems can also be used to heat the entire home, as part of a forced air or radiant hot water system. In cold climates, tankless systems are sometimes used to heat driveways on homes. This saves a lot of snow shoveling.

Expensive
Although smaller than conventional water heaters, tankless systems are considerably more sophisticated and more expensive than conventional water heaters. Tankless water heaters make a lot of sense and have been used for several decades in Europe. They are newer in North America, and there have been some issues in satisfying North American lifestyles.

Inspection Conditions
Let’s look at some of the issues with tankless water heaters. In most cases the implication is not enough hot water. The basic inspection strategy is to operate at least two hot water faucets simultaneously to ensure adequate delivery. It is good to run the water for at least two minutes, and include a bathtub faucet because of the good flow rate.

1. Fuel supply problems
2. Scale buildup
3. Longer wait
4. Limited flow
5. Minimum flow rate problem
6. Cold water sandwich
7. Relief valve problems
8. Filter problems
9. Reliability and maintenance issues

We won’t be able to discuss all of these in detail, but let’s go over the two common complaints: longer wait and maintenance issues.

Longer Wait
When a hot water faucet is turned on, it may take longer to get hot water with a tankless water heater than a conventional system. Tankless water heaters are typically activated by flow through the hot water side of the system. A hot water tap opened just a little bit may not create enough flow to turn the water heater on. The flow through the hot water side of a system with a tankless heater may be lower since, instead of the water passing through a large tank, it passes through a coil wrapped around a heat exchanger. This creates a more restrictive path for the water. More friction loss means less flow. This can be a nuisance but is not a critical problem. Better tank locations and multiple tanks can help resolve the issue. On-demand hot water circulating systems can be added to provide hot water more quickly.

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Reliability and Maintenance Issues
Conventional water heaters are relatively simple and inexpensive. Tankless water heaters are more expensive and more complex. More frequent repairs and higher maintenance costs may be expected. Some home inspectors advise customers to expect more maintenance issues with tankless water heaters and recommend a service contract that includes regular maintenance.

Despite the problems that homeowners may face with tankless water heaters, there are many benefits such as size, energy efficiency and reduced energy costs. We can expect these systems to continue to improve and remain a popular option for many homeowners. Because of their complexity and importance to the occupant, home inspectors need to gain a good understanding of how they work and what things can go wrong.

About the Author
Alan Carson is Past President of the American Society of Home Inspectors (ASHI) and principal in Carson Dunlop, one of Canada’s largest home inspection firms, founded in 1978. Carson Dunlop is distributors of the ASHI@HOME training program home study, Horizon report writing and business management system, the Home Reference Book and Technical Reference Guide, which identifies the age and size of HVAC equipment.