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How Do Instant Hot Water Systems Work and What Are The Options?

Gas hot water systems provide continuous hot water as required by heating the water on demand, eliminating the need for traditional storage tanks. Instead, cold water from the water tank water flows through a heat exchanger that rapidly heats the water only when a hot water tap is turned on. Once the tap is turned off, heating also stops.

Instant hot water systems are akin to air conditioning units in terms of user-friendliness and include several types:

  • Gas tankless water heaters: Use natural gas or LPG to heat the water your household will use. These heaters can deliver up to 16 litres per minute, although they contribute to greenhouse gas emissions.
  • Electric storage electric heaters: These systems use electricity to heat water, offering a flow rate of approximately 10 litres per minute and are more eco-friendly than their gas counterparts.
  • Heat pump systems that heats water efficiently: Heat pump systems extract heat from the surrounding air, offering exceptional energy efficiency albeit with a higher initial cost.
  • Solar hot water system technology: Solar hot water systems harness the sun’s energy to pre-heat water, facilitating fast water heating by a secondary system.

Key advantages include an uninterrupted hot water supply, significant energy savings, a sleek design, and a durable lifespan, with some units exceeding 20 years. Initial purchase and installation costs are however higher, with the cost tankless systems command compared to traditional hot water systems.

Comparing Instant Water Heaters To Traditional Water Heater Systems

There are some notable differences between instant (tankless) and traditional storage tank water heaters:

  • Energy use - Tankless systems only heat water when needed, using less energy and minimising heat losses compared to storage systems that run continuously to maintain heat.
  • Efficiency - Compared to conventional storage water heaters, tankless heaters are generally 24-34% more efficient as there are minimal standby losses.
  • Hot water flow - Gas tankless heaters boast higher flow rates, typically between 11-18 litres per minute. Storage tanks are limited to the size of the tank, and electric models have lower flow rates.
  • Lifespan - Quality tank heaters offering continuous flow water heating can last over 20 years due to the simplicity of the heat exchanger and lack of a tank susceptible to corrosion.
  • Size - Bulky storage tank hot water systems are replaced by tankless heaters, which are compact and space-efficient.

While a tankless hot water system in your home may have a higher upfront cost, its efficiency and longevity provide long-term savings on energy bills and maintenance.

Understanding The Pros of Instant Hot Water

Instantaneous hot water systems offer several compelling benefits that make them a worthwhile investment:

  • Immediate hot water - Hot water is instantly accessible as soon as you turn on a tap, eliminating the wait for a tank to warm up.
  • Energy efficiency - Only heating water on demand reduces energy consumption, saving on electricity or gas bills. Savings of $115-160 per year are common.
  • Space saving - The absence of a cumbersome storage tank means that these systems save valuable space and can fit into tighter areas.
  • Higher flow rates - Gas electric instant heaters deliver flow rates up to 16 litres per minute, excellent for servicing multiple taps simultaneously.
  • Longevity - Quality instant gas hot water systems can last more than 20 years due to their simple system with less to corrode or fail.
  • Environmental benefits - Higher efficiency means lower CO2 emissions. Also contributing to ecological sustainability are these systems’ reduced electric water heating-related metal and insulation waste when replacement is necessary.

With the ability to save money on energy bills by around a third and provide endless hot water convenience, instant systems can pay for themselves in just a few years.

Overcoming The Limitations of Instant Hot Water Systems

Despite many benefits, it’s crucial to assess the potential disadvantages of tankless water heaters:

  • Higher upfront costs - Quality instant systems have a higher initial purchase and installation price compared to traditional water heaters.
  • Electrical upgrades - Electric hot water systems, particularly tankless models, often require upgrading your electrical panel and service to handle the high power demand.
  • Flow rate - During peak usage, the heater’s maximum flow rate may not suffice for simultaneous use, potentially leading to a shortage of hot water.
  • Climate suitability - In very cold climates, the flow rate can decrease when inlet water temperature is below a certain level.

Nevertheless, there are strategies to mitigate these limitations:

  • Consider gas hot water system options like tankless heaters as they have lower operating costs to offset higher purchase costs.
  • Compare models to find ones suited to your water needs in your household’s typical demand.
  • For an electric gas water heater model, consult an electrician about the required electrical upgrades during installation.
  • In cold climates, some higher-end models have built-in freeze protection and adjustable activation flow rates.

While instant hot water systems have limitations to factor in, they can still be an effective solution in many homes with proper planning and setup.

Evaluating Costs: Installation vs. Long Term Savings

Deciding on the cost-effectiveness of an instant hot water system requires weighing both the initial installation expenses and the potential long-term savings:

Installation Costs

  • Gas tankless water heater purchase - $800 to $1500
  • Electric storage-type tankless water heater purchase - $500 to $1200
  • Installation for a hot water system your property requires (including parts and labour) - $1000 to $3000
  • Electrical upgrades for installing tankless water systems, if needed - $200 to $800

Therefore, the total cost to install a new instant hot water system in your home ranges from approximately $2000 to $6000, depending on the system chosen and installation complexity. This is more expensive than traditional hot water heaters with a storage tank.

Long Term Savings

Although more expensive initially, instant hot water systems offer long-term benefits, providing a convenient hot water supply over their 20+ year lifespan:

  • Efficiency can lower energy bills, saving between $100 and $250 annually
  • Fewer repairs with longer lifespan - Save $150 to $300 over 20 years
  • Potential rebates on installation - Save more than $300 to $1000

Taken together, these savings can offset the higher initial investment in around 4 to 8 years. And with some systems lasting over 20 years, the long run savings are substantial.

Consult a plumber to evaluate costs based on the specifics of your house, but in many homes, tankless water heaters make financial sense long-term.

Assessing Suitability Based on Household Size and Hot Water Use

When it comes to deciding if an instant hot water system is right for your home, it’s important to consider the number of occupants and your typical hot water usage patterns. This helps determine if a tankless water heater can meet your demand.

Household Size

Larger households with 3 or more occupants typically require higher flow rates. Multiple showers operating at the same time may exceed the capacity of a lower-rated electric tankless water heater.

This ensures there is enough hot water for most concurrent uses.

Daily Hot Water Requirements

Consider when your hot water demand peaks - often first thing in the morning for showers or evening meal preparation and cleanup.

Identify your total hot water usage based on shower times, sink use, appliance demand, and how often heavy use overlaps. This helps size an appropriate tankless unit.

Similarly, consider your household’s lifestyle; a larger family with active teenagers may consume more hot water than smaller households or those with seniors. Be aware of your hot water usage and how it varies during weekdays, weekends, and vacations.

In Conclusion

Consult a plumber to evaluate your expected hot water requirements during peak demand periods. They can recommend the water heater right for you, a suitable tankless model, and help determine if your system aligns with your household’s needs.

Selecting the Right Instant Hot Water System for Your Home

Selecting the optimal instant hot water system for your home depends on several key factors:

Household Size and Hot Water Needs

Take into account your household size and peak hot water needs. Larger households might require a gas tankless system with a capacity exceeding 180,000 BTU.

Energy Source

Gas tankless heaters outperform in terms of energy efficiency and flow rates compared to electric models, though electric instant heaters are still a viable alternative to traditional tank units.

Efficiency Ratings

Choose a model with exceptional energy efficiency, ideally with an energy factor (EF) rating of 0.87 or above. More stars equate to greater efficiency and lower running costs.

Installation Requirements

Consider additional costs such as water line adjustments, permits, electrical work for electric heaters, and gas line connections for gas models.

Climate Suitability

In cooler climates, look for freeze resistant technology and an adjustable activation flow rate.

Consult a licenced plumber who can help you size and install the optimal system based on your household’s water usage needs and patterns.

Maintaining Your Instant Hot Water System for Maximum Efficiency

To keep your instant hot water system operating at peak efficiency for many years, follow these maintenance tips:

Routine Checks

  • Perform biannual visual inspections of your water heater to identify any leaks, damage, or signs of corrosion.
  • Test that the system’s pilot light is operational and it is still delivering hot water at the desired temperature.
  • Check all gas and water connections are tight with no drips.


Carry out annual descaling to prevent mineral scale buildup, which can hamper efficiency; use a specific descaling solution, or contact Epping Plumbing for support.

Filter Cleaning

Clean the inlet water filter every 6 months or when flow becomes restricted. This prevents scale buildup and maximises performance.

Professional Servicing

Schedule a comprehensive service every 3 to 5 years with a licensed plumber. This professional maintenance helps extend the lifespan of your tank hot water system.

Staying well-informed about service checks and regular cleaning will ensure your system remains efficient for more than 20 years. For professional maintenance advice, email or call the team at Epping Plumbing today.

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