Tankless Electric Water Heaters: Water Heating Option Poses Efficiency Issues

Are on-demand tankless electric water heaters capable of supplying sufficient hot water for a three-bath house, or are point-of-use water heaters or a combination of the two a better alternative?

The Money Pit Answer

Tankless electric water heaters do exist, but they are really inefficient and require exceptionally large circuits to operate. Some tankless electric water heaters pull as much as 150 amps, which is practically the total size of the average house electrical system.

If you have a choice, you are always better off going with a gas-fired tankless water heater. But if you need to stick with an electric water heater, I suggest adding a 240-volt timer so that the water is heated only when needed, such as early in the morning or in the evening. During other times, the unit can be left off. 

Installing more than one water heater--basically zoning your domestic hot water supply--can also be cost-effective as it shortens the distance the water needs to travel from the faucet to the tap, meaning you will be wasting far less water waiting for it to get warm and wasting less energy than you would with a single tankless electric water heater.

Finally, a new product may hold promise for those that have electric water heaters but want to effciency of a tankless water heater.  It is called a heat pump water heater which uses the effciency of a heat pump and is far more effcient that a standard electric water heater.