When it comes to upgrading your home’s water heating system, you might be wondering if a tankless water heater is a smart investment. After all, it promises to deliver hot water on demand, without the need for a bulky storage tank. But the real question many homeowners ask is: Will a tankless water heater save me money?
Let’s explore the costs, savings, and benefits of switching to a tankless water heater by answering this and other common questions about tankless water heaters.
How much does it cost to install a tankless water heater?
The cost of installing a tankless water heater can vary based on several factors, including the size of the unit, the type of system (gas or electric), and whether any modifications are needed for your existing plumbing or electrical system.
A tankless water heater installation in Indianapolis can cost anywhere between $800 and $3000 depending on what system you go with. Usually, electric heaters are cheaper than natural gas or propane heaters.
Although the upfront cost is higher than traditional tank water heaters, there are other ways that a tankless water heater can save you big money in the long run.
Will my electric bill go up with a tankless water heater?
This again depends on whether you choose an electric or gas tankless water heater. However, one of the biggest advantages of an electric tankless water heater is its energy efficiency.
Unlike traditional water heaters that continuously heat and store water, tankless models only heat water when you need it. This on-demand heating method eliminates the standby energy loss that comes with keeping a tank of water hot 24/7, leading to significant energy savings over time.
According to the U.S. Department of Energy, tankless water heaters can be 24-34% more energy-efficient for households that use less than 41 gallons of hot water daily. Even in households with higher water usage, they are still 8-14% more efficient. This improved efficiency translates directly to lower energy bills, meaning you’ll save money each month while also reducing your home's overall energy consumption.
While electric tankless water heaters may require more power when in use, they only draw energy when hot water is needed—unlike traditional models that cycle on and off throughout the day. Over time, this efficiency will help lower your utility costs, making a tankless water heater a cost-effective investment.
How long does a tankless water heater last?
Speaking of cost-effective investments, tankless water heaters are known for their longevity and durability, especially when compared to their traditional tank counterparts. On average, a tankless water heater can last over 20 years—significantly longer than the 8-12 years you can expect from a traditional tank water heater. This long lifespan can provide significant savings, as you’ll likely avoid the need for a replacement for many years.
Plus, tankless systems typically require less maintenance than traditional heaters, further extending their lifespan and keeping replacement costs down.
Is there an IRS tax credit for a tankless water heater?
Yes, there’s good news for homeowners considering an energy-efficient upgrade! The IRS offers a tax credit for certain energy-efficient home improvements, including tankless water heaters.
Under the Federal Residential Energy Efficiency Tax Credit (Section 25C), you may qualify for up to a 30% tax credit on the cost of purchasing and installing a tankless water heater from a qualified manufacturer. This credit can help offset the initial cost, making it a more affordable option for your home.
Be sure to check the current year’s guidelines, as credits and eligibility can change over time. Also, keep in mind that the unit must meet specific energy efficiency standards to qualify for the credit.
Overall, the answer to the question “Will a tankless water heater save me money?” is a resounding YES! While the upfront installation cost is higher, the potential savings on energy bills, the available tax credits, and the longer lifespan of the unit can make a tankless water heater a smart investment.
If you’re looking to lower your energy consumption and enjoy a reliable source of hot water for years to come, a tankless water heater may be the right choice for you and your wallet!
At Ciriello Plumbing, we promise expertise, honesty, and efficiency to the homes and businesses we service in Greater Indianapolis, including Carmel, Fishers, & Greenwood. From residential plumbing repairs to commercial installations, our expert team is dedicated to providing exceptional craftsmanship and unparalleled customer service. For reliable plumbing services you can trust, contact Ciriello Plumbing Solutions today.
