Exploring possibility of tankless for a small house of 2, predictable schedule

[Strategery]

I own my house in the midwest and I'm thinking about how to cut down on my hot water heating costs. I currently have an electric water heater that is running around 400-500 dollars annually operating cost. That is with a discount electric rate during the winter months. I have a natural gas line to my house, I just made a big mistake having an electric unit installed instead of a gas powered.

What would make the ideal situation for a tankless water heater?

I will be having a 2nd person living here this month. I'm curious if it would make sense to just get rid of my electric water heater and replace it with a tankless unit. I know that the upfront costs for a tankless unit are greater, but with the rebates and tax incentives + decreased operating costs I don't think it would take too long for the payback. Would be different if I had a gas tank unit.

One installer quoted me $2500 for a tankless unit installed. I believe it would either a Navien or Rinnai. It's my understanding that neither of these are condensing units because they told me the venting is done with the metal pipe instead of the cheaper pvc.

Can anyone tell me from experience if condensing units are much more expensive? And if so, how is the performance?

Also, in the midwest where we have very cold winters, is the temperature of the groundwater a big factor in tankless units and whether they will work? I'm not sure what the groundwater temp is but I know the tankless unit would have to work harder in the winter months to heat the water compared to somewhere where it's mostly warm.

Feedback is appreciated. Thanks.

[jadnashua]

Supply water temp can make a huge difference in your satisfaction with the unit. It all depends on your usage rate of flow. The units essentially make the heat in a very short path and they can only raise the temperature a certain amount. So, if it is designed for say 70-degrees at your desired flow rate, that would likely be fine in the summer when the incoming water is 50-degrees (50+70=120 output). But, where I live, I've measured winter incoming water temperatures at 32-33. So, 32+70=102= a cool shower. If nothing else, you'd have to adjust the antiscald shower valve to allow more hot water in during the winter and lower it in the summer since most cannot provide full hot when adjusted properly for the summer water temps.

WIth the additional cost to purchase and the annual maintenance generally required (depends somewhat on how hard your water is), a good gas-fired unit is often a better buy. And, while a tank may last longer with some maintenance, most people don't do that, and they work until they die. You could probably buy 2-3 gas units before you came out even, and thats if you do the maintenance yourself. The better gas units don't really have all that much standby losses (the electric are better on standby losses since they don't have a flue up the middle). And, if the WH has an automatic damper, that loss is minimized even more. The biggest hassle with installing a gas unit where there hasn't been one before may be routing the flue and chimney. The tankless parts, if you ever needed some, are less common, and if it dies, you may need to wait. That means you're out of hot water for maybe a week or two by the time you get it diagnosed, the part ordered, and then they come back to replace it. A traditional tank unit, you can often get one replaced the same day, and parts are generally easier to find.

Any tankless will have a lower temperature output as either the incoming water gets colder or you try to use more water (within limits - some modulate, but if it requires full-bore burner, it can only output so much heat). If you are trying to get a minimum flow (warm water), it may not be enough to trigger the burner at all on a tankless. A traditional tank type gets you full temp until it gets emptied, regardless of the flow or incoming water temps.

[Strategery]

Thank you very much for the informative detailed reply.

I should have noted that I do have a water softener. I don't know if it makes a huge difference, but softened water does heat faster. And I obviously wouldn't have to worry about the mineral buildup that can be a problem in water heaters. In fact I checked my electric tank unit just yesterday for sediment buildup by letting a fair amount of water out the drain and it was crystal clear.

I see that you live in New England. I live in Iowa. Our climates are probably similar in terms of how cold it can get and what our winter water temps are.

Is a 70 degree temperature rise pretty typical? I find that the most comfortable temperature for me to take showers is about 115 degrees. I wash most of my clothes in cold water because I believe it is gentler on them and they get just as clean.

I DO like to run my dishwasher temps pretty hot, probably 130-ish? Maybe that can be taken care of by adding a smaller on-demand type of unit under the kitchen sink where the dishwasher is located.

[LLigetfa]

I don't think opening the drain cock on the WH provides any evidence of there not being mineral buildup. The buildup rarely presents as mud (sediment) but rather as scale on the heating element/surface that may flake off and collect in big chunks. Pulling the heating element would offer more conclusive evidence but it is not something I recommend. Also, having a water softener does not mean you won't have scale.