Tankless Water Heating FAQs

What is a “tankless” water heater?
Tankless water heaters come in three (3) different models – electric, natural gas, & propane. In the case of an electric “tankless” water heater, large electric heating elements are used to heat up water. Depending upon how much hot water is needed, the wattage of these elements can be quite large, in order to heat up the water while the flow of water passes through the unit. The main advantage of this type of water heater is that it doesn't need a storage tank eliminating standby losses.

What is the size of a “tankless” water heater?
Tankless water heaters come in a variety of sizes for different applications, such as whole-house heater, or as a hot water source for a remote bathroom or hot tub. They can also be used as a booster for dishwashers and washing machines. A smaller version is installed underneath a kitchen sink to conveniently provide instant boiled water for hot tea, hot chocolate, or for cooking needs.

Do "tankless" water heaters save a lot of energy?
This kind of water heater is advertised to save energy because it doesn't have to maintain gallons of hot water constantly. However, companies trying to sell “tankless” water heaters tend to overstate the energy savings potential of these units. The total standby loss (the energy lost from the storage tank to the environment) of an energy-efficient water heater is only about 300 kWh or about $20 to $25 per year. This is substantially less than the thousands of kWh sellers claim.

How many kW does a “tankless” water heater use?
The energy savings comes at the cost of a much greater power demand. For a whole house unit the demand would be about four to eight times that of a storage tank type water heater. Some of the whole-home “tankless” water heater models have as much as 28 to 35kW electric elements.

To instantantaneously heat water for a low-flow showerhead (2.5gpm), a simple calculation shows that 18 kW of power is required or 36 kW for two simultaneous showers. Here is the equation:

What is the cost of a “tankless” water heater compared to an electric tank type?
The cost of a whole-house “tankless” water heater can be two to three times as expensive as the conventional tank units. The typical cost of a 40 to 50 gallon electric water heater is $250 to $450. The “tankless” equivalent is $650 to $1,200. The “tankless” unit will increase the cost of the electrical panel, wiring, and service. Also, you may need to work closely with BHP to assure a large enough transformer and service wire is installed when using a “tankless” water heater. The small hot water dispensers that provide 1/3 to 1/2 gallons of boiling water – use only 750 watts of electricity and can be purchased for $100 to $200.

I am on BHP’s Residential Demand Service; will a “tankless” water heater work with my Demand Controller?
No, because of the substantially large demand for a whole-home “tankless” water heater – the Demand Controller will not provide the savings associated with the Residential Demand Service. The small hot water dispensers (750Watts) should work fine but would not be controlled by the demand controller.

Does BHP recommend the use of “tankless” water heaters?
The small dispensers, used in kitchen applications, offer a convenient way to have instant boiled water.
However, BHP does not recommend the use of “tankless” water heaters for whole-home use. As a guideline of the type of electric water heater that should be used for your home, each of BHP’s residential tariff sheets say the following:
“Company-approved water heaters shall have a tank capacity of not less than 30 gallons and an electric capacity of not more than 4,500 watts at 240 volts. If two elements are used, interlocking controls are required to prevent simultaneous operation.” Finally, tankless water heaters do not qualify for BHP rebates.