Tank vs. Tankless Water Heaters: What You Need to Know

A very important, but often overlooked discussion about an integral component of any home, is your water heater. They come in many different shapes, sizes, types and efficiencies, but which is the right one for you?

Let’s Talk About Tanks

Let’s talk about the differences between tank and tankless water heaters. A standard tank water heater (natural gas or propane) vented through either a conventional chimney or through a wall power vent, is probably the most common type you will see in today’s residential homes.

Whether the standard tank type is conventional or power vented, it usually has an Energy Factor (EF) of 0.67 to 0.75.

Defining Energy Factor (EF)

A water heater’s energy factor (EF) is a measure of useful energy coming out of the water heater, divided by the amount of energy going in. The energy factor is based on the amount of hot water produced per BTU of natural gas or propane consumed per day.

What does this mean? Basically, the higher the EF, the more money you spend to operate the water heater and therefore more energy is being utilized to heat the water.

A simple example would be if you spend $100 on natural gas to operate a power vent 40 gallon water heater, you are actually only getting about $67 worth of gas to heat the water. The $33 that remains is a loss due to the inability to extract all of the heat from the gas you are burning.

The Tankless Option

Tankless water heaters have been utilized for several decades in Europe and Asia where indoor space is at a premium. Over the last two decades, the efficiency, technology and reliability of tankless water heaters has significantly increased. As a result, more and more homes are using this technology here in Canada.

The Ontario Building Code has also evolved, and now requires most newly constructed homes to install an 0.85 EF or higher water heating system. This means that tankless water heaters are now being used more often in order to adhere to this code, due to their high efficiency.

Our premium Navien Condensing NPE Tankless Water Heaters have achieved an efficiency standard of 0.97 EF, with an estimated annual operation cost of only $191. This means that up to $0.97 of every dollar is being utilized to heat your water.

Aside from the savings in efficiency, tankless water heaters work instantaneously and only heat the water on demand. This also saves you money, since you won’t have to heat and store 40-50 gallons of hot water.

A tankless water heater can supply about 3 times the amount of hot water as a traditional tank type. For homes with high occupancy and several bathrooms, a tankless water heater may be the solution to prevent the issue of running out of hot water.

The Age-Old Question: To Purchase or to Rent?

It has become a standard and somewhat implied concept that renting your water heater is a mandatory household expense. When we are comparing purchasing vs. renting water heaters, there are many pros and cons to both options:

Purchase

• Higher upfront cost, however, lower overall cost over the span of 10 years
• Less warranty coverage
  • Tank: 6 years for parts and tank
  • Tankless: 5 years for parts + 15 years for heat exchanger
• 24/7 Emergency Service Support included, but at a cost
  

Rental

• No upfront cost, roughly double the expense of purchasing over a 10-year lease
• Full 10-year parts and labour coverage
• No charge 24/7 Emergency Service Support included with lease

Crystal Heating & Cooling offers both purchase options and a low cost monthly “Lease-to-Own” program that allows homeowners to pay down the value of their product to eventually own their water heating system.

Contact us today for your no-cost, in-home evaluation of your existing system and find out how Crystal Heating & Cooling can help you save on your monthly water heating expenses.

Trevor Finn is the owner and president of Crystal Heating & Cooling. He has worked in the HVAC industry for almost 20 years.