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3 Reasons to Switch to Tankless Water Heating

Secure energy, space, and lifecycle savings

By Jennie Morton

Secure energy, space, and lifecycle savings.

Tankless Water Heater

If a steady supply of hot water is needed for your business operations, it may be time to ditch your old water heater. A tankless water heater will secure energy savings while delivering all the hot water your business needs to stay afloat.

Key Advantages
Tankless water heaters run on electricity or gas and can supply hot water for a variety of end uses, including showers, dish washers, laundry machines, lavatory faucets, and kitchen sinks. They are suitable for any commercial setting that has high water demands, even if those periods are intermittent.

“When a tankless heater fires up, it senses the temperature of the incoming water and a computer microprocessor determines the amount of energy that’s needed to deliver the water at the temperature setpoint and flow rate,” explains Michael Stebbins, president and founder of trutankless, a manufacturer.

The benefits of tankless extend far beyond longer showers – they will lower your water heating bill, ensure demand is always met, and free up space in your utility closet.

1) Avoid Down Time
For many businesses, having hot water for clients is part and parcel of the experience they provide – it’s a necessity that directly connects to the bottom line.

“If you don’t use a lot of hot water, tankless is simply nice to have. But if your demand is high and your business depends on hot water, you can’t afford to have down time if you run out,” says Ansley Houston, director of Rinnai’s Commercial Division, which distributes heaters.

Rather than being limited by the number of gallons your storage tank holds, tankless heaters provide an infinite amount of hot water. Think of settings such as a hotel, hair salon, or spa – customers walk away dissatisfied if they aren’t provided with services that depend on hot water. It can be equally disastrous for a restaurant to have to close their doors for health reasons if enough hot water isn’t available. Tankless technology ensures these scenarios are obsolete.

“You can also create redundancy by connecting multiple units on a rack,” explains Houston. “If one goes offline because of maintenance, your entire system won’t be compromised as other units can pick up the slack. If your water demand changes in the future, you can scale up or down accordingly.”

2) Conserve Energy
Tankless heaters only consume electricity when there is a need for hot water. Storage tanks, however, continuously use energy to keep a reserve of hot water.

Consider your facility’s peak times for hot water. In a school, there may be a rush after gym class for showers and a period over lunch for kitchen preparation, but otherwise how water needs are minimal. Then there are holiday and summer breaks when demand drops even lower. Every hour you aren’t using energy to heat water provides instant savings.


Hotels also experience high demand but for limited blocks. They typically see a peak in the morning for bathrooms and sporadic usage in the afternoons for laundry. A tankless heater will ensure a full house never runs out of hot water, yet save energy when guest volume is down.

Switching from a traditional water heater to tankless can yield a 30% savings on the water heating portion of your utility bill, says Jason Fleming, marketing manager of Noritz America, a water heater supplier. Note that ROI is highly variable depending on rates and you might have a higher water or energy bill if your consumption increases to meet demand, adds Stebbins.

“If you only focus on payback, you’d have to use the tankless unit in the same way as your original heater. But that’s not the point of the technology,” Fleming stresses. “Factor in the soft advantages of unlimited hot water instead.”

3) Save Space
There’s no denying that water heater tanks are voluminous contraptions. Tankless units have a small footprint compared to their traditional counterparts. They’re lightweight enough to wall mount, which means you no longer need a dedicated mechanical room for water heating, says Fleming. You could save 12-15 square feet per unit or approximately 100-150 cubic feet of storage by switching, Stebbins notes.

You also don’t have to retrofit them in the same spot as the original tank. These units can be tucked away in utility closets, basements, attics, or even outside.

Maintenance Needs
Most water heaters receive little upkeep and consequently have to be replaced at the first sign of failure. Rather than a total replacement, individual parts of a tankless heater can be exchanged to extend its life, says Houston.

“The heat exchanger is the most important component,” Fleming notes. “A total flush is needed periodically, which could be annually or every three to five years depending on water hardness.”

The chamber of tankless units that use flash heating should also be cleaned or descaled, Stebbins recommends.

Periodic flushing should be done once a quarter or every year depending on water quality, says Houston. You can use inexpensive products such as vinegar or a lime-and-rust remover. You should also perform a full drain.


Clean vents and ensure there’s no debris, particularly if the return is positioned near other exhaust vents, Fleming advises. You can also use compressed air for any buildup on the fan and door.

For gas units, schedule burner check and evaluate the vent for cracks as a safety precaution, Houston recommends.

Retrofit Considerations
Some facilities have oversized water heaters in the first place. Tankless can be scaled to your actual water demand.

“You don’t replace a water heater with a tankless unit based on the original storage capacity – you size the tankless model based on your hot water demand,” Fleming clarifies.

Sizing evaluates a number of factors, says Houston. Look at the number of fixtures that use hot water, their gallons per minute rate, and peak demand. You also need to know the groundwater temperature coming in through your pipes, which affects how much energy is needed to raise the temperature to the setpoint.

Installing a tankless heater as close as possible to the point of end use is best as less energy will be lost as water is transported throughout your building. Otherwise, you need a recirculation pump and line, which will keep the water at the correct temperature, says Fleming. You can also add a timer and aquastat for additional control.

For gas units, anticipate a slightly larger fuel bill, particularly if your hot water demand was never satisfied with your original heater.

“For example, you may currently have a 199,000 BTU water heater but are always short on water. It could take a 380,000 BTU tankless unit to meet your demand fully,” says Fleming.

You may also need to expand the size of your incoming gas line, Stebbins suggests, though gas companies typically offer deep discounts to help you with upgrades. Vents are another consideration as tankless heaters use concentric vents to dissipate carbon monoxide rather than a standard V vent, Fleming says.

“Electric units are simpler to retrofit as there are no venting requirements, though you might need to increase the size of your breaker in the main panel and have a larger electrical feed wire running to the unit in many applications,” says Stebbins.

Lastly, shop around for installation costs, stresses Houston. The plumbing technician should also have familiarity with these units, otherwise improper installation could negate future savings.

Jennie Morton is senior editor of BUILDINGS.