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I love taking an absurdly long hot shower after spending a day in the shop.  I can do so because the people who built my house expected a bunch of kids to live here, and they installed two big-ass hot water heaters.  That’s the good news.  The bad news is that I’m shelling out cash to keep 110 gallons of water hot all the time, even when I’m out of town. 

Rheem’s tankless water heaters sound like a better answer.  Through the use of a very efficient heat exchanger, they heat quickly enough to provide a continuous supply of hot water on demand, meaning I keep my long showers and pay less for my gas bill.  Did I mention some of them qualify for a $300 tax credit, too?

Here’s how they work: when you turn on the water, the unit senses the water flow and its built-in computer ignites the gas burners and monitors the combustion for safety and performance.  The heat exchanger warms water as it flows through, and you get hot water at the tap.  When you turn off the hot water faucet, the heater shuts down, using almost no energy until you fire it back up.

According to Rheem, the Energy Policy Act of 2005 includes some tax gredits (up to $300) for new home builders and commercial users.  Of course, your mileage may vary, but it’s worth a look if you’re considering going tankless.

Of course, there’s another side benefit that might prove more valuable than the energy savings: you don’t have a 50+ gallon tank of water waiting to flood your house should it spring a leak.  As someone who’s seen this happen — and is happy to have his big-ass water heaters in the garage instead of in the attic — I can say that this is a huge advantage.

Rheem makes a variety of models in multiple sizes for both inside and outside installation, and they carry a 10-year warranty.  Pricing starts around $1,000.

Tankless Water Heaters [Rheem]
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19 Responses to Ditch The Tank For Longer Hot Showers — And A Tax Credit

  1. William says:

    Having looked into going “tankless” in the past at our old house built in the 40s, many older houses do not have a gas line able to supply sufficient flow for a tankless heater. We would have had to do a substantial upgrade to our entire gas system to use a tankless heater so we just replaced our busted tank with a traditional model.

  2. Chuck Cage says:

    William: Would one of the outdoor models have saved the need to install gas lines inside the house?

  3. Fred says:

    I looked into getting one of these (the one I investigated was Japanese) a couple years ago when I replaced my twenty three year old (!) thirty gallon heater. Got a nice conventional forty gallon unit instead.

    The problem isn’t just with the gas coming in; There’s a whole lot of hot exhaust to vent, too. I decided my old chimney wasn’t up to the extra stress. This seems the kind of thing best planned into new construction.

  4. Fred says:


    The outdoor mounted models have some limitations. Remember that the water lines would run outside, too, which can’t be done where there will be freezing temperatures. Think of places like Wisconsin where we have two seasons; Winter and road repair.

  5. Matt says:

    I have 2 water heaters also. I’m told it’s due to the big goofy jacuzzi tub (if we ever filled it, the water heater would be empty). Luckily, the heaters are connected in series and they’re in the attic. I turned off the gas to the upstream tank and only turn it back on if guests are coming. I don’t plan on turning it on again until November. Ain’t paying much for hot water in Memphis right now ’cause the attic’s about 100 degrees. If yours are hooked up in series, I bet you folks in Texas could do the same.

  6. nrChris says:

    We have a tankless system and it rocks. With three kids and two adults, we use a ton of hot water. (Even though with a wife and two daughters, I am clearly the worst offender.)

    I have walked by it a thousand times in the basement and I am embarrassed to not know the name of the system. It is five years old or so, and we have only been here for six or seven months. Anyway, I’d recommend one.

  7. James says:

    From what I understand, this is the only option in Europe or Japan but the models available here in North America are junk.

    Gas was only just introduced where I live and it’s only available in a few neighborhoods, of which mine is one. Once it was available, I decided to switch since my 23 year-old oil furnace needed replacing and I was excited to switch to tankless. I got quotes from every local company doing installations, and not one of them even bothered to offer a tankless.

    It turns out that the only models available here are not actually that efficient and have poor reliability. Just a couple of weeks ago, I heard about someone’s tankless leaking and causing major damage.

    So instead, I got an efficient tank heater and set it to “vacation mode” which is the lowest temperature it supports. It’s still much hotter than I need it, but I’m using way less energy.

  8. Paul says:

    I spoke with a rep with the gas company here in Montreal. He doesn’t recommend what’s out there now for Quebec residents. Our cold water in winter is just too cold for the system to be able to heat. I’ve seen cold water out of the tap get as low as 2 deg celsius here (35 deg F). That’s a seriously cold shower!

  9. Joel Wires says:

    The only time I’ve ever use one was in Germany. There was kind of an awkward delay for the hotwater to start. However that was in a pretty big building. Once it started it was great. We had about 6 people to put through the shower in the morning and the hot water supply was awesome.

    Does anyone know how the Rheem heaters compare to the Rinnai heaters?
    I’ve heard a lot of advertising for the Rinnai heaters on the radio. I didn’t know if anyone had heard bad things about specific brands.


  10. Roscoe says:

    I’m not a plumber, but the one’s I know still say that these aren’t much better than they were 30 years ago, but are more popular today because they appear “green”. They’re not cheap and replacing one when it breaks is a lot more expensive than swapping out a water heater.

    I still think that there are better options out there, like a high-efficiency gas water heater with a blower on the exhaust.

  11. Mark says:

    There are many options out there. Since most TMs like Bosch tools, why not look at the Bosch tankless systems. I believe the quality is just as good as overseas.
    Note that they do have electric models too. They recommend 200 amp service if you are going to use an electric model. However, I believe that the electric models do not qualify for tax rebates. Another option is to do “point-of-use”. These are smaller units that are mounted where you use them. I am actually trying to determine if I can use a solar system in front of a smaller tankless system (yes, Bosch also makes a tankless specifically for solar systems. Most flow-through tankless systems sense the delta temperature, so if it is already hot enough, it does not turn on. No matter how efficient your tank system is, I don’t think you can beat a tankless system.

  12. Lew says:

    I found this article helpful during my research of tankless hot water heaters:

    Tankless 101
    A tutorial for the homeowner and the professional

  13. George says:

    I almost replaced my 40 gal gas-fired tank with one, but read lots of comments about having to replace the internal valve assembly every couple of years at a cost of $150-200. I can buy a lot of natural gas for $100 year.

  14. DaveD says:

    For those that actually have units in use, do you see a substantial decrease in the gas bill? I was interested in these but wasn’t able to find anyone’s actual real life numbers. Then I read this article http://www.askthebuilder.com/451_Tankless_Water_Heaters.shtml
    and I wasn’t sure if you really would end up ahead or not.

  15. Brau says:

    [The bad news is that I’m shelling out cash to keep 110 gallons of water hot all the time, even when I’m out of town. ] Of course that depends completely on how well your tanks are insulated. The one I have is encased in thick styrofoam and doesn’t lose anything. The outside of it remains stone cold.

    I have had the misfortune of using instant water heaters in Britain and here in Canada and can attest … THEY SUCK! The people who use swear by them are in my opinion power misers who feel a great shower is a short tepid one.

  16. cc says:

    what about solar powered water heaters? Those seem like a good green option, especially for a one or two person household.

  17. Solar batch heaters in warmer climates, or evacuated-tube collectors for the rest of us, are indeed the best solar option out there. They yield a much better bang for the buck than photovoltaic panels, provide hot water even during utility power failures, and last practically forever.

    Start at http://www.homepower.com/files/beginner/SolarHotWaterBasics.pdf

  18. Greg Johnson says:

    For Rheem Tankless Water HEaters check out

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