Tuesday, June 02, 2009

The tankless saga continues

I apologize up front that there are no pretty pictures of flowers, beautiful wood work, or hot water heaters to make this more enticing. Hopefully you'll still find it informative.

After several weeks of researching info about tankless hot water systems, my research seems to be going nowhere. Oh, I’ve gathered a lot of information and I know a lot more now than I did a month ago about tankless hot water systems but I haven’t gotten any closer to deciding to actually install one in my home. The long-term savings are obvious. It will be cheaper to run on a day to day basis but what about the up front costs. How do I get a handle on those?

“Who would be dumb enough to install a tank system these days?”

That’s a paraphrase of a question I heard someone blurt out at a USGBC Residential Green Building Committee last week. Of course, isn’t that a logical question? If you have the opportunity to save money on your energy costs AND have the federal government subsidize some of the cost of installation, why not? The response is difficult. Part of the difficulty lies in the fact that it is hard to get a solid estimate on what it will cost to install the tankless system. The obvious costs are the cost of the water heater and the labor to install it. The costs get fuzzy from there. The next cost is a new gas line because in older homes, the tiny bungalow included, the gas pressure is not great enough for these units. How much is that? Well, it varies, depending on size and location in the house.

Next up on the cost checklist is the exhaust. Currently the hot water heater vents out the chimney. This isn’t recommended for new models because the heat is a lot greater and there is better chance for condensation and moisture issues in the chimney. I could get a liner for the chimney but God knows what that will cost. In lieu of this, you can vent out the side of the house or “direct vent”. Ooops! You can’t actually do that at the tiny bungalow because the house is six feet from the lot line and by code, you are required to have twelve. I guess we could vent out the back of the house but the vent pipe is pricey and this would be a pretty long run, if it is possible. On top of that, we may want to put on a rear addition in the relatively near future so you figure out what problems there are in that. Either way, we’ll have to get a cost for the venting.

“That’s great; you can take advantage of the tax break”

The up side of putting in this system is that there are some monetary incentives from the government and local utilities. The first rebate comes from People’s Gas. Actually, it comes from the folks that pay to People’s Gas and since I pay People’s Gas, I am actually giving this rebate to myself, right? The program is called the Chicagoland Natural Gas Savings Program. From this program, I will likely get a $400.00 rebate. The heater I am looking at costs roughly $1100 so it would actually only cost me only $700.00 after the rebate.

The second incentive we have is a 30% cost of installation and heater up to $1,500.00 from the federal government. Again, I am getting the money from me, since I pay taxes to the federal government but I won’t belabor the point. How much do I spend up front then? I have no clue due to the lack of clarity on cost of the items under the first section. For fun, let’s say that the gas line install costs $1,300 and the venting costs me an additional $500. Throw the $1,100 for the heater and a day’s labor of $500 and the total comes to $3,400 for the new tankless heater. Take off the 30% and that drops the price to $2,380. Subtract the $400 and we are at a grand total of $1,980. Now let’s pretend that I have two thousand bucks to spend on a water heater…

“We stopped installing them because the service callbacks got to be too much”

Yes, a local plumber actually said this to me. Could you possibly hear anything more disconcerting from a plumber? Well, maybe, “you’ll be without water for a month while we re-route your water service” might be worse. The point is that these systems are not without their problems. I’ve spoken with four people with such systems. I know, not a staggering number but its not like there are a ton of you out there but it is all I could get. Only one person has had a practically flawless experience with tankless systems. I have to add that that this person also has a solar pre-heat on their system and they are mechanically inclined so installation, upkeep, repairs, etc. are all done by the owner. I don’t have such luck or time or patience.

The most common problem is that you have to run the water a little bit before it gets hot. I don’t consider this a problem unless I am concerned about water conservation (which I am). Oh, by the way, there is a cure for this, a recirculating pump, but I am tired of adding things onto my install bill so I won’t be getting one. Some folks have experienced a drop in water temp when more than one person showers. That won’t be an issue either, since that rarely occurs at the Tiny Bungalow. I guess when it comes down to it; there are not many “cons” that I can’t deal with if I could get my head around the cost a bit more. Of course, it would be great to hear several more glowing reports from people with their own tankless systems (and I don’t want to hear that you have a solar pre-heat) but I don’t expect that to happen. If anyone has more light to shed, I'd love to hear the comments.

Right now, I am still leaning towards an Energy Star rated tank system and am very sad about that. I very much want to put my money where my mouth is on this issue but it just doesn’t seem possible as I can’t handle the initial cost. I have a plumber coming by to walk through all of this once more on Friday. Let’s hope that the meeting goes well. Regardless, I should have more to say on the subject so stay tuned.


denise said...

Sadly, we ran into a similar thing. We were planning to install a tankless for our new master suite. All the plumbers we had in for quotes were not keen on it, mentioning problems and customers not being happy with it. In the end we decided that our current tank could handle the upstairs as well, especially since it's just the 2 of us. But I was a little disheartened about it all — I wish I had something positive to report.

Also, we have Nicor, who isn't participating in the Chicagoland Natural Gas Savings program — I've already complained about that and they claim they're "considering" it. Yeah.

Shane and Casey said...

Up here in North Dakota, the water coming into the tankless systems during the winter is supposedly too cold for it to be able to heat it up sufficiently by the time it exits the unit. It is kind of a bummer as we'd love to reclaim the space.

Gene said...

We've got a tankless (Takagi TK-2, I think) we've had for several years and we love it. For us it makes a lot of sense: our water usage is small, and our hot water usage comes in batches (e.g., weekly laundry.) With a tanked water heater, it was just sitting around a lot.

Re: not getting hot water right away, that was sometimes an issue before I replumbed the house with copper. The old galvanized pipes were full of cruft, and it took a while to get hot water even before the tankless. After replumbing, it's very quick (e.g., less than 2 minutes).

If you've got a larger family and are frequently doing laundry, running the dishwasher, etc., then it may not make sense. Or if you've got particularly hard water that will gum up the works more quickly. But it was right for us.

Anonymous said...

Tankless heaters are probably a good alternative for guest bath sinks, but as a choice for day to day demands they fall short.

I am in the middle of a project where we looked at tankless heaters for running a jacuzzi tub, as the main water heater was 80 feet away.

But once we saw the need to run two large electric circuits 90 feet just to feed the heater, we abandoned that idea.

Plus the plumbing for it, as well finding a place for it.

heather said...

Hi Tiny Bungalow... been following for awhile now, keep up the great posts!

Have to say we also ran into that problem. When we bought our house last year, our first upgrade was going to be a tankless water heater - but after a ton of research, and the costs to upgrade the gas plus the vent situation, we decided we'd stay with a tank. Also, the fact that the tank heater actually exploded in the basement, we just used our home warranty to put in a new one.

My guess is it will be about another 5 years or so before plumbers actually become accustomed to working on them, thus quoting them under the $2k mark.

Tiny Oak Park Bungalow said...

Crap, I should have done my homework. My wife just let me me know that we now have Nicor and whenw e were in Chicago we had People's Gas. I guess I can add that $400.00 back to the price. The decision to stay with what I have is becoming easier and easier buy the day. I can't say as I am happy about that though.

Todd - Home Construction Improvement said...

We see lots of tankless heaters at work and so far no complaints from customers. In fact we're using quite a few tankless on demand boilers now that heat enough water to supply hot water radiant heat. In new construction we actually vent them through the roof using PVC. Most manufacturers now are able to vent them using PVC. I wouldn't be surprised if many tankless water heaters can now be vented that way.

Tiny Oak Park Bungalow said...

Todd, I'd love to know any models that allow PVC venting. I loathe PVC for various reasons but it would be good to have all the info. The only one I know of is the Eternal Hybrid heaters and those are no good for this application due to the tiny house size as well as the higher cost.

jay said...

Our tankless has been underwhelming to say the least in winter, but performs quite adequately in summer. However, I suspect there is a controls or sensor issue unique to my specific unit (bought it used. Idiot!). In any case, from what I've heard, I think your cost estimates are fairly reasonable.

I recently read that the high-efficiency tank style water heaters (that look like there is a whole furnace system above the tank) work pretty well. There is one mentioned (along with trade-off analysis) in one of the USGBC ReGreen case studies. Maybe Deep Energy Retrofit? Anyway, that may be an option given all the obstacles you've mentioned.

Finally, if you can limp along for a few more weeks until the IL budget is passed, I would do so. If the state rebate program for solar returns, then that 30% rebate, plus the federal tax credit of 30% will result in an effective ~50% discount off the installed price. Net out of pocket would likely be $4000 or so, but you still need a backup heat system as this would only meet about 70% of hot water needs.

Gene said...

Jay brings up a good point. People get all excited about solar PV panels, but in terms of return on investment, solar hot water (with a backup heater of some sort) is a much better way to start. Especially with all sorts of potential improvements to PV panels in the coming years.

Tiny Oak Park Bungalow said...

Solar would be my preferred option, except for the initial output. If I can barely scrap together the amount for the cheapest up-front option, then how do I come up with 4X that much for what I want? It may come down to "settling" with an undesirable short-term solution and then upgrading in 5-10 years when we actually start major renovations and the economy is a little better.

Jennifer said...

We've researched it... with no solid quote on installation costs, we've decided against it. The variables were just too high!

We'd love to have it, as getting rid of the tank will allow us a CLOSET in the bathroom (a luxury when you have 800 sf). But the costs of running new vent and gas lines is too much, I think.

Timothy said...

My parents got one and like it. They put up shelves where the huge tank used to go. My mom complains about the long heat up time, but she always needs something to complain about. My dad researched the systems and you can get larger ones if you need to operate more than 1.5 sources of water at a time. (I think a sink counted as .5)

He ran his gas line right to it when he hung it on the house outside and then put some heat system to thaw the pipes for the winter which is set on a thermostat. Freezing pipes would be very bad. If my heater ever dies, I'm going tankless so I can reclaim that 9 sq. feet of my basement.