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Water Heating > Product Basics
  Water Heaters Overview
  Storage Tank Heaters
  Tankless & Other Types
  Tank vs. Tankless
A water heater is the appliance that is responsible for all of the hot water in the home. When water is delivered to the home through the municipal water system, it comes through unheated pipes. Without a properly working water heater to warm up the water that is delivered to the home, the water in the shower, in the washing machine, and in the kitchen faucet would be cold. Residents could look forward to walking around with goose bumps, wearing partially clean clothes, and having to wash all their produce and dishware under an icy stream.
Water Heaters Overview
The water heater is a critically important home appliance and its operation is responsible for 25% of the utility bill in a typical residence. If this seems high, it bears taking a moment to consider the amount of water coming through the home and the extent to which it must be heated on a regular basis.

On average, water comes into the home at a temperature of around 50 degrees Fahrenheit, which is less than 20 degrees above the point at which it turns to ice. The exact temperature of the water delivered via the municipal system varies depending on the season, but it does not get too much colder or warmer than the 50 degree mark. That being said, the hot water required for showering and washing is between 104 degrees and 120 degrees Fahrenheit, so we can use 112 degrees as an average. This means that the water entering the home needs to be heated by 62 degrees in order to make these activities possible. In other words, the temperature of the water flowing through the home has to be more than doubled on a continual basis.

Meanwhile, the amount of water flowing through the home is actually much higher than you might imagine. The average shower has a flow rate of 2.5 gallons per minute, while the average faucet or dishwasher utilizes a flow rate of between 1 and 2 gallons per minute. With that in mind, one can imagine heating just a single gallon of cold water on the stove. How long would it take to get it to a temperature of 112 degrees? That is just one gallon, where taking a 10-minute shower uses up to 25 gallons. In fact, in a typical household, each resident consumes around 30 gallons of hot water per day. Assuming there are four residents that comes to 120 gallons of hot water each and every day. To put things in perspective, you should imagine a hundred gallon jugs of cold water that each need to be heated until they are piping hot. This is precisely why the water heater is such an important appliance and why optimizing its operation and energy usage can make a major difference in both the quality of the residents’ lives and their expenditures on utility bills.

There is one other use for hot water that has not been mentioned and that is to provide space heating. Although most home heating systems in the United States use a forced-air furnace or air-to-air heat pump, which both directly heat the air, some use hydronic systems which operate by first heating water and then piping that hot water through radiators or under-the-floor pipes in order to provide ambient heat. This type of water is different from the water used in the kitchens, showers, dishwashers, washing machines, and so forth. The water used in daily washing, cleaning and cooking is referred to as “potable” water, or alternatively as “domestic hot water (DHW)”. In this section of the site, the topic is specifically water heaters used to heat potable water, which is typically a separate major appliance.

Available water heaters can be categorized both by type and by power source. The two primary types of water heaters in the United States are classified based on whether they use a hot water storage tank or whether they provide tankless water heating. In addition to these main types, there are also heat pump based systems and point-of-use systems. Each of these will be discussed in great detail in the section below which deals with water heater types.

Another way to categorize water heaters is by the kind of power used by the unit in order to fuel its operation. The most common power options are electricity and natural gas. However, solar water heaters are becoming increasingly popular as a result of their greater energy efficiencies and reduced environmental footprint. Additionally, in some parts of the country, water heaters powered by fuel oil or propane gas are still quite common.
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Storage Tank Heaters
There are two primary water heater types, which are storage tank water heaters and instantaneous water heaters. In addition to these primary types, there are also heat pump-based water heaters and point-of-use water heaters, which are both less common. Each type has its own set of advantages and disadvantages and these are important to understand in order to be able to select the optimal type for the reader’s unique situational needs.

Since about the middle of the twentieth century, storage tank water heaters have moved to the fore and become the predominant and most popular design in North America. The basic design involves cold potable water entering the house being piped into a storage tank, which is then heated by either a burner or an electric element placed at the base of the tank. When a hot water tap is opened somewhere in the home, the heated water from the tank is pumped to that tap. As heated water is pumped out of the storage tank, new cold water from the water main is pumped in. The addition of the cold water serves to decrease the overall temperature of the tank, and requires the burner or heating element to resume operation until all of the water in the tank is once again brought to the necessary temperature.

Even when hot water is not being used inside the house and therefore not being pumped out of the storage tank, the overall temperature of the water inside the storage tank still drops over time. This is referred to as “standby heat loss”. It is impossible to eliminate standby heat losses altogether, but it is possible to limit it by using a heavily insulated tank.

In addition to standby heat losses, storage tank water heaters that use a burner also suffer heat losses associated with combustion and venting. That is to say, not all of the energy released in the course of the burning process is able to be captured and utilized to heat the water. Rather, a portion of the heat is released in the form of gases and carried out by the vent.

As a result of both standby and venting heat losses, the storage tank water heater is not the most efficient design available. Moreover, it has the added problem of requiring significant time to reheat the water if the existing supply of hot water is rapidly exhausted, such as if a large group of people need to use the shower one after the other. However, storage tank heaters have become popular due to their convenience. Always having a tank of hot water ensures that heated water is available virtually at all times throughout the home. In the case of a gas- or oil-powered storage tank water heater, the hot water is available even in case of a power outage. In the case of an electric water heater, the storage tank can continue to provide a repository of hot water for some time after the power goes out.

This type of design is referred to by a variety of names, including storage tank water heater, storage water heater, and tank water heater. Most such units consist of a cylindrical container which stores the hot water and gives rise to the term “storage tank” in the name. The water in these units may be heated by a variety of means, including electricity, natural gas, propane, heating oil, and solar energy. While each of these power options will be discussed in greater detail subsequently, natural gas is currently the most common way that storage tank water heaters operate.

The storage tanks are usually either placed on the floor, or on a raised platform elevated a short distance above the floor. Given their size and weight, as well as safety considerations, storage tanks are typically not mounted on walls.

In evaluating a storage tank water heater, one of the critical elements to consider is the material used for the walls of the storage tank itself. A high quality storage tank will feature an inner container made of stainless steel or another material that is scale- and rust-resistant, and that does not wear down as a result of exposure to high temperatures.

It is important that the storage tank is maximally insulated, thereby minimizing standby heat losses. Storage tank water heaters come with an insulation rating based on the R-value. The R-value stands for thermal resistance and can be used to express the insulating effectiveness of an object or material.
Generally, storage tanks range from R-6 at the low end to R-24 at the high end. For storage tanks with R-values below 16, it may be a good idea to add a specialized insulation blanket, which is wrapped around the storage tank to provide additional insulation. Such insulation blankets are typically made of fiberglass interiors coupled with vinyl, foil, or aluminum lining. Models that use aluminum tend to have the highest R-values.

The outside of a properly insulated water heater storage tank should not feel hot or even warm to the touch. If it does, this is an indication of poor insulation and excessive standby heat losses. In these cases, an insulation blanket can result in significant energy savings. In addition, it can make the storage tank safer, preventing accidental burns in situations where its outer surface can become sufficiently heated.

Insulation blankets have to be properly sized to fit the storage tank and properly installed to ensure that they are not blocking any air flow vents, drainage valves, or control knobs. In addition, special care must be taken in highly humid climates with older storage tanks, as in these situations the installation of an insulation blanket can actually result in an overabundance of condensation and lead to rust or mold.
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Tankless & Other Types
Unlike storage tank water heaters, tankless water heaters do not have the same issues as far as insulation or standby heat losses. As their name suggests, tankless water heaters, also known as “demand water heaters” or “instantaneous water heaters”, do not store hot water in a tank. Rather, these units heat the water only when a tap or faucet is turned on, thus signifying the “demand” for hot water.

A tankless water heater avoids all of the various issues associated with maintaining hot water in a storage tank. In addition, a tankless system makes hot water available without the need to wait for a tank to be filled and heated. However, with a tankless water heater, the output volume of hot water is limited as there is only so much water that the unit can heat at one time. In a household where residents are taking showers simultaneously or washing machines, dishwashers, and faucets are being run at the same time, a tankless water heater may prove insufficient. However, this problem can be overcome by installing a whole house tankless system, which incorporates several water heating units.

A tankless water heater works by heating cold water as it travels through the pipes on its way to the tap. A heating mechanism, which is most commonly either an electric heating element or a gas burner, turns on and applies heat to the water as it flows through the tankless system. Because the system can only heat so much water at one time, the volume of hot water available throughout the home is not as extensive as with a storage tank.

In addition to storage tank and demand water heaters, a third, albeit less common type of water heating technology is based on the use of a heat pump. As some readers will recognize, heat pumps are commonly used for the purpose of residential central heating and cooling. A heat pump works by exchanging hot air for cold air using the refrigeration cycle. The process can be reversed, so that a heat pump can be made either to heat or to cool an area.

In the case of water heating, a heat pump transfers heat from an outside source – either the air or the ground – to a storage tank of water. Given the relatively greater energy efficiency of a heat pump, such a system can be highly cost-effective. Consumers can either purchase a hybrid 3-in-1 heat pump system which combines heating, cooling, and water heating, or they can have an existing heat pump retrofitted to work with a traditional hot water storage tank by adding a desuperheater unit. In either case, a heat pump system is still essentially a storage tank water heater with the difference being that the heat is generated using a heat pump rather than a gas burner or an electrical element.

The final type of water heater is a point-of-use unit. These are essentially small tankless heaters that provide hot water for a specific outlet, such as a specific faucet or shower. These units can be used to provide additional water heating in a remote location, as an extension of an existing central water heating system. Point-of-use water heaters are basically smaller and less powerful versions of a tankless water heater.
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Tank vs. Tankless
Given that storage tank and tankless are the two primary types of water heaters, it is important to understand the advantages and disadvantages of each type. We have touched on these briefly, but a more thorough discussion is not only warranted, but indeed critical to help you make the optimal purchase decision.

First, let us consider the advantages of tankless water heaters. Because these systems do not suffer from standby heat losses and do not heat water at any time other than when it is being used, they are more energy efficient than storage tank models. In a typical home, hot water is only being used a few times during the day. Yet, a storage tank water heater is constantly operating, repeatedly reheating the water inside the tank to maintain its temperature.

A tankless water heater provides unlimited hot water. Even though the available flow rate and volume of hot water at one time is more limited with a tankless water heater, there is no danger of ever running out of hot water altogether. By contrast, once the storage tank is depleted, a tank water heater requires time to refill and reheat the water in the storage tank before it can be made available again.

A tankless water heater requires far less space. These units can be mounted on a wall, or even inside the walls. There is no need to make room for a large storage tank that will permanently occupy a substantial amount of floor space. This can be of particular importance in smaller houses that lack a basement.

A tankless water heater is generally safer. Because there is no tank, there is no risk of water damage from a tank leak, or of burn or injury from a sudden tank rupture. In addition, water heaters tend to be more precise in controlling the temperature of the hot water, so there is a smaller likelihood of dangerous spikes in the temperature of the water.

However, despite these advantages, tankless water heaters also have a number of critical drawbacks. It takes longer with tankless water heaters to obtain hot water. Since a tankless unit only heats water upon demand, it takes time for the water flowing from the hot water tap to reach the desired temperature. By contrast, because a tank heater keeps the water in the storage tank at an elevated temperature at all times, hot water is available immediately.

Another issue is that tankless water heaters often have a delay between the time the hot water tap is turned on and the time that the burner actually begins to heat the water. When the tap is repeatedly turned on and off, this can result in small amounts of cold water being sandwiched in between the hot water. Having such bursts of cold water in between the hot can be an uncomfortable experience, particularly in the shower.

Tankless water heater systems also tend to be more expensive to install than storage tank models. The costs can get particularly high if a storage tank water heater is being replaced with a tankless model. This may require changes to the electrical wiring, to the gas piping, or to the venting. If the tankless system requires additional units in order to support a higher volume of simultaneous hot water this increases the expense further yet.

Most tankless heaters are limited to either gas or electricity with respect to power options. This makes them less flexible than storage tank systems, which can also use solar, geothermal, and central heating. There are some solar-based tankless systems, but these are not common and tend to be expensive.

Because tankless heaters warm the water as it passes through the pipes, they are sensitive to water flow. The faster the flow, the less time the water spends being heated, and vice versa. As a result, adjusting both flow and temperature on the fly, such as in the shower, can be more challenging with a tankless water heater. The fluctuations that take place as the water heater adjusts to the new water flow or temperature setting are minute, but for a person taking a shower they can be not only noticeable, but quite uncomfortable.

Another drawback of tankless heaters is that they rely on the water pressure that is delivered to the home via the municipal water system and are not compatible with pumps or power shower heads that work to increase the pressure of the water coming out of the tap. That means that in situations where the pressure of the delivered water requires augmentation, a tankless water heating system would not be the way to go.

In summary, there are strong arguments in favor of both storage tank and tankless water heaters. Storage tank systems provide a more comfortable showering experience, a more constant temperature, a lower cost of purchase and installation, better pressure control, and more energy choices. Tankless systems provide greater energy efficiency, better safety, lower space requirements, and unlimited hot water that is not constrained by tank size or replenishment speed.
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