So You Need a New Hot Water Heater

Condensing, tankless hot water heater (left) with drain water heat recovery unit.

The decision is usually thrust upon you. Shower water goes luke warm, or worse, stops altogether one morning. If you're lucky, the basement won't be all wet when you go downstairs to investigate. Yes, the hot water heater has died.

In the hectic days following, you need to make a decision quickly. If long-term energy security and environmental impact are priorities for you, here is a short guide to buying a new hot water heater.

Note: this post was co-written by a good friend of mine who is, in my mind, one of Edmonton's most knowledgeable experts on energy efficient retrofits. He recently installed the water heater shown above in his own home.

Solar Hot Water

The most efficient way to make hot water uses solar collectors, but if you don’t want to (or have the time to) go the solar route, your best option is to use our plentiful and cheap natural gas. Although electricity provides 100% efficient water heating, the electricity itself was generated at 30%-50% efficiency, often using dirty Alberta coal.

Tankless Hot Water Heaters

Using natural gas, the most efficient choice is a condensing, on-demand hot water heater (seen above). This means that there is no tank, and therefore no standby heat losses, and the combustion of the natural gas to heat the water is the most efficient. They have an energy factor (EF) of 0.92-0.96, and they cost around $3000-4000 installed. The combustion gases are near room temperature and are vented directly outside through the basement wall often using PVC pipe.

Predictably, I (Conrad) endorse the above choice. Long term, people! Think long term.

The next most efficient choice is a regular combustion, on-demand hot water heater (no tank, but the combustion is less efficient). They are vented up an existing furnace/hot water chimney or out the side wall using metal pipe. They have an energy factor of 0.82-0.84. (we have no info on costs - anyone?).

Hot Water Tanks

Next up are condensing hot water tanks. Their combustion efficiency is in the 96% range, but because of the standby losses of the tank the energy factor is around 0.83. They cost around $4000 installed.

Finally, there is the regular old hot water tank, which has been around for more than 100 years. Some are insulated better than others and energy factors range from 0.53 to 0.66. (again, no cost info, although this is certainly the cheapest option). 

Tankless = Durable

Besides energy efficiency, a compelling reason to choose a tankless heater is durability. Every tank will eventually corrode and spring a leak. The difference in life spans between tank and tankless heaters is significant. In fact, "Expected life of tankless water heaters is 20 years, compared to 10 to 15 years for tank-type water heaters" (source).

So there you have it. To me, tankless seems like the way to go, but obviously every situation is different. If you do decide on a tankless unit, Edmonton contractors are much more knowledgeable about them than they were just a few years back. Also, make sure to get at least two quotes, as I have heard of $1000 differences for installation and purchase of the exact same unit.

* The Energy Factor of a hot water heater is based on three factors: 1- the efficiency with which the combustion energy of the natural gas is transferred to the water; 2- the heat lost due to storage; 3- cycling losses due to startup and shutdown. 

More pictures:

Another tankless, condensing hot water heater installation. 

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We have a tankless system (no comparative numbers though). It is, for the most part, satisfactory.

There is a slight lag in getting hot water (versus our experience with a hot water tank). With a dishwasher that uses relatively little water, it is sometimes hard to get enough hot water into the dishwasher to activate the soap. Timing the dishwasher after a shower (so the water in the pipes is hot) alleviates this.

Something to keep in mind is that tankless require more maintenance than traditional tanks: every two years we have a fellow out to deal with calcification and whatnot whereas periodically bleeding some water off the old tank was all that was required.

I've often wondered if "heat-loss due to storage" is really all that relevant in our climate. Presumably much of this "lost" heat radiates into the house and thus (marginally) reduces other heating costs.

Overall, I think tankless is a good choice, but I'd have to think long and hard about doing it again.

Thanks for the insight into living with a tankless system Bob. Also a very good point about standby losses. For the 6-8 month heating season, they aren't losses at all.


I love our Rinnai. The unit is working above expectations.

I have learned that location within the home is important as well. My unit is in the basement laundry room where installation was easiest (and where the old tank made the least-used space the warmest).

I now wish I had put it nearer to the kitchen sink. The issue is the amount of water wasted while waiting for the hot water to arrive to the taps where hot water is most often used in the home.

(yes, I do use it in the kettle, fridge, plants, toilet)

Put your tankless unit on the main or second floor - you won't even know it is there and you will extend your efficiencies to water use as well.

And Conrad, what is the blue thing hanging off the water pipe in the bottom photos - softener? magnets??

My husband and I have bought a new home in McKernan (new construction though we didn't build it) with an unfinished basement. We're planning on building a basement suite and want to take the opportunity to put our tank water heater on their basement suite and install a tankless system for ourselves. This idea is strongly opposed by our plumber who vehemently maintains that you can not run a tankless efficiently in Edmonton (I'm from Australia where nearly everyone has a tankless).

Is there a reduced efficiency of tankless water heaters in cold climates?

Also, can your co-author give us more details on his system? Our priority is to minimize our carbon footprint (not cost).

Any suggestions for a plumber familiar with tankless systems and comforatble installing them?
Thanks, Rebecca


I have heard that some of the original tankless water heaters were engineered for the southern US. Some of these units would only be able to provide a 30 degree C rise in water temperature which was OK if the incoming water was 12 or 14 degrees C. In Edmonton, where the water comes in to our house at 4 or 5 degrees C, a 30 degree increase in temperature only gave lukewarm water. Unfortunately, the good plumbers (i.e. the ones that stand behind their work and warranty what they install) were the ones burned by this when they had to do repeat return trips to resolve the problem. The plumber you spoke with may have had some bad experiences which is why he won't install tankless now.

I agree with Philip. Rather than fight your current plumber, I think it's best that you find a plumber who is knowledgable willing to to help you with a tankless install. I'd ask to see some calculations or other proof showing that what he's about to install will meet your needs.


Here's a timely article on tankless water heaters from Martin Holladay at


We just built a new how in Edmonton and the builder raved about the Rinnai tankless heater. We have lived in the house for about 6 months and find that we have dangerous hot/cold water sandwiching in our main bath where the children shower. We can not have any other fixture on at all if we are trying to fill a tub. We do not have enough pressure to run 2 bathroom taps and a shower, the shower drops down to a trickle. We have already dropped down the temperature setting to 120F to hope it helps with the flow rate. Not a big difference there. We have even called the rinnai 1-800- # to the states and were told our ground water is too cold to heat it up to 120F, that the tankless actually constricts the flow to ensure the water leaves at that temp. Our tankless according to our manual is supposed to have a flow rate of 9 gpms, but the plumber measured it and its at 5 gpms. The plumber has suggested either a $2000 Reno that would have a 40 gallon holding tank, or supply and install a new tank (a vertex by A.O smith) which will cost me more than $4000, and the builder is making me pay for the electrical and siding repairs required. My question is, is there a difference in condensing tankless hot water systems and what are they? How do I find out if my tankless is a condensing tankless? I need info from someone with knowledge, can be objective, honest and is not in it for the money. Thanks.

Hi Guanyin, I'd recommend contacting Brent Massel at Forefront Heating & Plumbing. He has experience with various systems including geothermal and solar (my system).

His contact information is:

Brent Massel

theplumberman _at_



Guanyin: What is the rated output of your tankless system? Condensing models generally have higher outputs. A condensing model will usually have a plastic exhaust vent or perhaps stainless steel venting running out the side of the house (as opposed to a regular tin chimney going out the roof). According to a recent CMHC study they are slightly more efficient than non-condensing systems:

Hi Rebecca, Congratulations on your new house. Installing an on-demand hot water heater in your house is a great idea. It is the most efficient way to make hot water using natural gas. Change comes slowly, and I am afraid that any plumber who tells you that on-demand hot water heaters are inefficient in Edmonton is looking for an excuse not to install one. It is like the furnace installers ten years ago who were telling people that it is not worth putting a high efficiency condensing furnace in a leaky old house. It was new technology and the venting had to be changed, so it took a whole day instead of installing a conventional furnace in half a day. Same with on-demand hot water. Replacing a tank with an on-demand system in not a straight swap-out. Venting likely needs to be changed and some plumbing may need to be altered. It is possible that your plumber has had negative feedback about on-demand heaters from customers in the past. Not all on-demand heaters were working all that well and there were problems with delayed hot water and so called 'cold plugs'. Since you are already familiar with the use of on-demand hot water you will have no problems getting used to one here in Edmonton. Compared to a tank, there is not efficiency penalty for running an on-demand hot water heater in our cold Edmonton climate. I installed our system myself but can give you some leads on installers as well as other details of my system.

As a journeyman plumber with over 20 years experience I would like to throw my two cents in.
The above OPINIONS seem to be missing some information. I deal with hundreds of water heaters annually and have yet to come across a functioning tankless heater more than 9 years old, in fact the majority of tankless manufacturerers haven't had their product in North America for much more than 10 years. Bosch was around in the late 90's but you would have a hard time even finding one from back then. I couldn't disagree more with the statement " tankless last longer" Impossible, because they haven't been here long enough to prove that claim. Also missing is the fact that tankless require significantly more maintenance then tanks. Maintenance means expense, and we all know that's not cheap. Any fuel savings are often eaten up with annual flushes and all too often repairs, never mind the frustration of no hot water. Throwing floor heat into the mix only multiplies the issues and cuts your ten year warranty down to three.

We had our tankless (on-demand, 80% combustion efficiency, about 100k BTU) Bosch water heater installed in 1999 (14 years ago), and is has worked flawlessly since, providing hot water instantly, with no delay other than the time it takes for the hot water to travel from the heater to the tap (as with any heater). Even our plumber was surprised. How long has Bosch been around? A few years, if Bosch's website is correct: "Mr. Junkers invented the Tankless water heater in Germany in 1895. Robert Bosch GmbH bought Mr. Junkers in 1932." We paid $999 at the Wood & Energy store at the time, and $200 for install. We have done zero maintenance since buying the unit, other than replacing the D-cell battery for ignition (no pilot light) every 4 years (the new units have a microturbine in the water line that provides the ignition spark). However, there are a few caveats to keep in mind: demand water heaters replace a "thick pipe" with limited supply (tank) with a "thinner pipe" with unlimited supply. Also, since their burners match or exceed your furnace in capacity you need sufficient natural gas and water pressure to supply to the water heater, as well as sufficient venting. Some plumbers charge as much as $1,900 for installation. I have always wondered if the reason our installer charged $200 is that he had never installed a demand water heater: he just sat down, read the installation manual and got the job down very quickly. I guess no one had told him he was supposed to charge $1,900 for the job. To be fair, the high capacity gas line was very close to the heater, and he could vent through a wooden wall, so no concrete drilling was required. I can see how in some (especially older) homes a lot more effort could be required. Also, demand water heaters usually require a minimum water demand for ignition to occur, e.g. 1.9 L/minute in a recent unit. Our Bosch unit is installed in our off-grid solar home in the country (off-grid for power and water) with very high mineral levels (I think the lab test was 2g of minerals per liter, i.e. about 60% of the mineral content of sea water). The mineral content of Edmonton tap water is much lower, though it may be of different composition. Also, 9 years before we had the Bosch heater installed, we put in a $400 rare earth pipe (connected to a ground as a source of ions) to ionize the water and make it less damaging to our plants, as recommended by the Rocky Mountain Institute ( Finally, having our own water supply, we have a large pressurized water holding tank, so most of the water is already at room temperature when it is being called by the on-demand heater. Some people report difficulties with on-demand water heaters. Whether these problems are due to faulty units, hard water, or poor installation I do not know. With respect to heat losses not being "lost" as they heat the home: heat loss is undesirable in the summer, and unless you live in your furnace room, I am not sure how much benefit you get from the losses. Furnace rooms in most homes are already very hot (in winter), and the delta T will lead to higher heat losses through the utility room walls (except in Conrad's house). So, yes, not all the heat loss is "lost", but much of it.

I bought my first house (built in 1948) in 1980. The furnace and water heater had been replaced in 1976. Both were still in the house when I demolished it in 2009. I drained the water heater every year and had to replace the gas valve on the furnace in 2000, but that was it for maintenance. I don't expect my current water heater to last anywhere near as long.


I am a plumber with over 40 years experience, and over 30 of those having been in business for myself. I take pride in my work and am not in business strictly for the money! ( That would explain why at 60 I am still working and not retired ,hehe). I have my business in a small town in Northern Alberta. I am amazed at so many opinions expressed by people who do their research on the internet and not asking the guy who lives by his work. Anyway, this is what I tell my customers.
If you want to save money and have a few teenagers in the house who like to shower till the warm water runs out, you will not save money with a tankless heater!
You must consider what condition your water is in before installing one,: ie soft water is MUCH better and requires less maintenance.
Storage type water heaters can be turned down to a 'pilot' setting for 2 weeks (vacation) and the water will still be too hot to shower with hot only when you get back,heated just by the pilot light. Don't believe me, try it, I did! so, so much for losing money with storing hot water.
Tankless heaters use a higher volume of energy to heat the water when showering or bathing than a storage type because you heat the water much faster, therefore it uses more energy per gallon of hot water, this is FACT!
Then you have the additional cost, cold water sandwich phenomena and more maintenance.
In My opinion, you want to save money and have lots of hot water, install a larger conventional tank or two tanks, the average family will NOT run out of water.
If you can afford it and want the best system going,,, Install a High efficiency Heating BOILER for your heating system and install an indirect hot water heater fired by the boiler.
Tankless water heaters do have their place, but as they will scale up with lack of maintenance on a hard water application, and they have a lag time on start-up and they are costlier to buy AND operate, in my opinion they are overrated. Having said that, I have no problem installing them as long as the customer clearly understands the costs. Personally I believe they are over-rated.
One last note, not all tankless heaters are equal in size ,capacity price or quality!
Just the opinion of a knowledgeable plumber!

Hello Everyone, I would like to endorse the cautionary note that Rob sounded on Jan 13th in 2013. I have owned tankless for many years and before that conventional tanks and so I have empirical evidence on the pros and cons of the technologies. To rent in Toronto where I live, a tank will cost you $17 per month, an equivalent tankless $45. Contrary to the claims that fly back and forth about efficiency, I have been unable to discern savings in energy costs that offset the cost disadvantage of tankless. For those who prefer to own rather than rent, a 55 gallon tank will cost you $2,000. A 190k BTU tankless will cost you $5 - 6,000 installed. Tanks can take abuse whereas tankless can't: routine maintenance is costly, especially the annual flush of the heat exchanger, which will cost north of $200. Tankless units don't have a long life because they are high tech and contain moving parts and things inevitably go wrong. For those analysing the economics of tankless installations, you can prudently assume that your unit will last 7 - 10 years if you are lucky. It is no coincidence that manufacturers generally offer a 5 year limited warranty.

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