Canadian Woodworking

HomeInOn – Tankless water heaters

Author: Carl Duguay
Photos: Steibel Eltron
Published: December January 2018

On-demand hot water systems save space, save energy, and save you money.


The conventional tank water heater has been around for well over 100 years, and while the technology has changed, it still functions pretty well the same. Water enters a holding tank, where it’s heated to about 120° and maintained at that temperature until you use it. At about 20 percent of a typical household energy bill, that eats up a lot of your hard-earned cash.

Not so with tankless (on-demand) hot water heaters. They don’t store any water and only heat up the water when a hot water tap is turned on. Tankless water heaters have been popular in Europe, where the cost of electricity is more expensive than in Canada.

The tankless market is maturing in Canada, with a lot more products on offer that provide better circuitry and are more efficient than earlier models. And, the purchase costs are coming down.

A Look Inside
The cold water intake is at the lower right. Water moves past a small flow sensor before moving into the heating modules, getting heated and travelling out the hot water outlet on the lower left. The controller is the black box in the right of the photo. All tankless heaters are different, but these general steps are typical.

The Finished Look
 The same unit shown with the front cover in place.

How tankless water heaters work

There are electric and gas (natural gas or propane) models to choose from, for either whole-house supply, or point-of-use supply. Both work essentially the same way. When you open a hot water tap, water begins to flow through one or more heating modules located in the heater. A flow sensor sends an activation signal to a control unit that powers up an electric element or gas/propane burner. The water is heated as it flows through the tubing in the heating modules. When the tap is turned off, the heater automatically shuts off.

Gas models can be non-condensing (the hot exhaust is vented directly outside the home) or condensing (the hot exhaust is reused to further heat the water before being vented). While tankless heaters can be installed outside, doing away with the need for venting, this is impractical for most areas of Canada because of below freezing winter temperatures.

Condensing gas models are the most efficient, though both gas models have a higher efficiency rating than electric models. However, they do require annual maintenance – electric models do not. With either electric or gas heaters, you may experience a short, 10-second or so, delay for the hot water to reach the tap after you turn it on. Installing a small holding tank in-line with the tankless heater can help resolve this issue.

Factors that affect performance

There are three factors that affect the performance of a tankless heater: the temperature of the water coming into your house – the groundwater temperature; the temperature that you want the water to be when it exits the tap – the output temperature; and the volume of hot water that you want, measured in GPM (gallons per minute) – the flow rate.

The flow rate is determined by adding up the GPM required to run, simultaneously, all the appliances that use hot water. For example, if you run the dishwasher (average GPM of 1.5) at the same time as you take a shower (average GPM of 2.5), then the flow rate you need is 4.0 GPM. The tankless heater you choose must be able to heat up and deliver at least 4.0 gallons of hot water per minute.

To do this, the heater has to raise the temperature of the incoming water to your desired output temperature. Say you like to shower in 120-degree water. During the summer, the incoming water might be around 75°. The tankless heater needs to increase the water temperature by 45°. However, in the winter, when the incoming water drops to perhaps 40°, then it would need to raise the water temperature by 80°. To get the hot water you need throughout the winter, you’ll need a heater that produces a temperature rise of 80°.

These heaters have to be able to sense water flow in order to work. You generally want a low minimum flow rate, close to about 0.5 GPM, so that the heater fires up if, for example, you only need a cup of hot water.

 Some Points to Consider

• Can be installed almost anywhere.
• Mounts easily on a wall.
• Only heats the water you use.
• More economical to operate than a tank system.
• Double the life expectancy of a tank system.
• Higher installation cost.
• May require upgrading electrical service panel or gas meter/piping.
• Requires professional installation.

Installation considerations

Because they’re so small, a tankless heater can be installed almost anywhere. In general though, it should be installed as close as possible to the fixtures that use the most hot water throughout the day – typically the kitchen. Gas models require higher gas pressure and volume than tank systems, so your gas meter and piping may need to be upgraded. They also need to be vented, either through an exterior wall or the rooftop. A whole-house electric model will generally require your home to have a 200 amp or greater service, which may require an upgrade to, or replacement of, your electrical service panel. While whole-house systems require professional installation, smaller, electrical point-of-use models can be user installed. They typically have flow rates around 1 GPM, and are designed to service a single fixture, such as a kitchen sink. Most can be wired to a 15- or 20-amp circuit.

There are several things to consider when selecting a tankless system, particularly a whole-house supply, which is why you should use the services of a qualified installer who can help you determine the right size of heater for your home.

Installing a tankless heater in a new house construction or during a major upgrade is the most cost effective. If you’re looking to replace an existing tanked system, then you’ll definitely want to evaluate the initial purchase price and installation cost against the long-term savings you can expect to achieve, and the forecasted rate increase for the type of power you use.

Got Hard Water?

If your water has a high mineral content, the minerals invariably precipitate out of the water and leave behind a solid mineral buildup in water pipes. This hard water scale effectively acts as a thermal insulator and reduces the overall efficiency of the heat exchanger, which can eventually lead to a rupture. So, if you do have hard water, you’ll likely want to install some kind of water softener.

Carl Duguay - [email protected]

Carl is a Victoria-based furniture maker and the web editor at Canadian Woodworking & Home Improvement.


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  2. Rinnai R94LS was installed during construction 14 years ago, and continues to work flawlessly (natural gas). A possible improvement might have the addition of smaller electric on-demand heaters under the sink in a couple of more “distant” areas, to conserve water.

  3. I’ve had a Rinnai for a few yrs. now. If you just want hot water at a tap at 1 gpm all you get is luke warm. I use it for underfloor heating and it gets full heat at 3.6gpm so it’s great. If you need hot water at the tap you have to run the underfloor heat in order to get nice HOT water. Same for the shower as it is only 2.2 gpm. We’ve learned to live with it as the underfloor heating is most efficient for the winter and it is only on a little when needed for showers etc. And yes we were in contact with Rinnai when we first got it and the plumber also couldn’t understand why it worked this way.

  4. I installed a tankless about a year ago. My only complaint is I now have to do all my laundry with cold water. I have a front loading washer that adds water in spurts and never adds enough at one time to get everything hot. I preferred to wash things like sheets and underwear in cold water. Other than that I like it. My son who is an HVAC tech pointed out one other problem is if you have teenagers that like to shower you will never get them out as they never run out of hot water.

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