Tankless water heaters are highly energy efficient and very compact. That makes them seem like a natural choice if you need to replace an aging, inefficient water heater -- and they can be terrific in that role as long as you understand their minuses as well as their pluses.
Where you live can play a role in your tankless water heater's cost and performance. Tankless heaters produce hot water on demand, but because they raise water temperature in a short amount of time, they perform better when the temperature of the water they are supplied with is warmer. That's not an issue if you live in sunny Florida, but can be a major concern if you live in northern Maine (see our discussion of the Ecosmart ECO27 below for an example).
Even the largest tankless hot water heater can sometimes find it a challenge to produce enough hot water to supply all the needs of a busy household. The Department of Energy says that one way to overcome that is to either install two or more tankless water heaters to supply an entire household, or to install a separate tankless heater to supply a high-demand appliance, such as a dishwasher or clothes washer.
Tankless water heaters can be fueled by electricity or gas, and cost a bit more upfront than storage tank heaters of either kind. However, they are also much more efficient, which saves you on energy costs. According to the Department of Energy, how much they can save you depends on how much water your family uses -- anywhere from as little as 8 percent for a home that uses a lot of hot water (about 86 gallons per day) to 34 percent for homes that use less (below 41 gallons per day).
Because they are more compact, it's easier to find an installation location for a tankless water heater than it is for one with a storage tank. However, things can get a little more complicated, and costly, when you consider the plumbing needed to hook things up. In a free article, ConsumerReports.org notes that, while traditional water heaters have their water inlets and outputs on the top of the units, many tankless water heaters, especially older models, have those on the underside, making for a more complicated -- and expensive -- installation than you might expect if you're replacing a storage tank heater with a tankless model.
Among tankless water heaters, we found some good feedback for the Ecosmart ECO 27 (Est. $510). At Amazon.com, the ECO 27 earns a score of 4.3 stars following more than 580 reviews. At HomeDepot.com, the tally is 4.1 stars based on nearly 130 reviews. One issue that does come up is that the warranty has a few catches. While it covers all components for life, labor is not covered. In addition, Ecosmart requires installation by a qualified person. That generally means a licensed plumber. We've seen reports that Ecosmart has refused to honor the warranty for self-installed heaters, though others have said that as long as the ECO 27 is installed properly, the company will make good regardless. Overall, user feedback is strong, especially compared to most tankless heaters.
Being an electric model, you don't have to worry about running gas lines, but the ECO 27 does require 200-amp electrical service, so you might have to budget for the services of a qualified electrician as part of your installation costs if that has to be added. Like many tankless water heaters, the water intake and outlet are on the bottom, which could add to the cost and complexity of an installation in some cases.
The Ecosmart ECO 27 is not Energy Star Qualified, but still boasts an impressive 99.8 percent efficiency. Performance is generally very good, but, as is true of all tankless designs, that can vary widely depending on the climate. In locations or conditions where the water temperature is about 37 degrees Fahrenheit, and based on an outlet temperature of 105 degrees F, the ECO 27 can produce only 2.7 gallons per minute (GPM), enough for one shower and two faucets to run simultaneously. Water rates improve as temperatures climb -- to about 6.6 GPM at water temperatures of around 77 degrees Fahrenheit -- that's enough to supply up to four simultaneous showers and one faucet. Water temperature can be adjusted in 1-degree increments, and lowering the desired water temperature can increase the flow of hot water. More information on the expected output by climate zones is available at the Ecosmart web site.
If you're looking for a tankless water heater that can be used for camping, outdoor showers or washing cars, the Eccotemp L5 Portable Tankless Water Heater (Est. $120) is an affordable option with a lot of versatility -- it even includes a handheld showerhead. It can heat water to between 80 degrees Fahrenheit and 150 degrees Fahrenheit, with a flow rate up to 1.4 GPM. For safety, it will shut off after 20 minutes of use. It's ideal for campers and those who want to live life off the grid -- it uses propane as fuel and the ignitor is battery operated. It's also portable and rated for outdoor use. You will need access to a water supply with adequate pressure, however, at least 20 psi. We've not seen any professional feedback, but users at Amazon seem pretty pleased -- it earns a 4.3-star rating following nearly 890 reviews.