In the past few years, the market for tankless water heaters has grown as more homeowners and businesses have discovered the advantages that tankless can deliver. Like any technology, tankless is not a cure-all solution. But, it can provide many advantages when used in the right applications.

“From a residential perspective, if you have a household full of people with a tank water heater and you’re the last one to get in the shower, depending upon the size of the tank it may have run out of hot water, and it’s a miserable shower,” explained Jeff Ogan, product manager for on-demand products with A. O. Smith. “One of the benefits of a tankless water heater is that it provides a continuous supply of hot water.”

It is important to understand the limits of any product, and tankless water heaters are no exception. Proper sizing is very important to deliver optimum performance.

Understanding your hot water needs as well as the temperature of the groundwater in your area is important to getting optimum performance out of your tankless water heater. “A 199,000 BTU/Hr condensing tankless heater can continuously give you 5.4 gallons per minute of 120°F water if the incoming groundwater temperature is 50°F,” Ogan said. “But, if you ask it to give you more hot water than it is designed to deliver, it will not be able to keep up. If a tankless water heater is sized properly, it can supply an endless supply of hot water for residential purposes.”

But, the applications for tankless do not end with residential projects.

“Tankless is really growing in popularity for commercial applications, as well,” Ogan said. “Typically, due to the higher flow volumes for commercial customers, you have to install multiple heaters into an application. One of the benefits of linking tankless units is to create redundancy. We can link up to 20 heaters together to deliver almost 4 million BTUs of heat input. Due to the fact that our tankless heaters modulate and have a minimum input rating of 15,000 BTUs, customers can realize the cost savings of modulating gas consumption, the benefit of redundancy, and the scalability of 20 heaters linked together.”

The ability to link heaters together gives tankless a flexibility that is attractive in many project types. But, for those unsure about going completely tankless, there are other options as well.

“A lot of customers want to have the benefit of redundancy that tankless provides, but also want the comfort or the safety factor that a storage tank can provide for larger demand loads,” Ogan explained. “A. O. Smith has the ability to integrate those together and put tankless water heaters with storage tanks as a package for customers.”

Ogan has seen demand for these kinds of solutions from restaurants, hotels and industrial applications, among others.

“If you think about it, in a restaurant, if one of the heaters were to stop working, the benefit of redundancy is you would allow the establishment to make it through the remainder of the night and not have to worry about shutting down the restaurant because one heater has stopped working,” Ogan said. “Then, the next morning during regular business hours, you can have someone come and replace or repair it, as opposed to having to make an emergency call in the middle of the night to get one heater replaced.”

In addition to functional advantages, there are some energy efficiency benefits to be gained with tankless products.

“There have been studies done on ROI [return on investment] for tankless in residential applications,” Ogan said. “You do get cost savings, but the real benefit from a residential perspective is knowing you are not going to run out of hot water.”

Ogan noted that the ROI argument may apply better to commercial installations of tankless.

“The higher efficiency and subsequent cost savings of tankless water heaters over less efficient water heaters are amplified in commercial applications. The more water you use, the faster the payback period,” Ogan said.

No matter the application or metric, tankless water heaters can be very energy efficient.

“Our condensing tankless product is highly efficient with an EF [energy factor] of 0.95,” Ogan said. “All our residential tankless heaters are Energy Star certified, and are more efficientthan standard atmospheric gas tank water heaters. We are very near maximum efficiency for transfer of heat into water.”

The interest in tankless continues to grow. Last year’s industry sales were up approximately 10 percent from the previous year, and so far this year, the industry continues to see strong sales

“A. O. Smith just launched a new tankless water heater with an input rating of 120,000 BTUs per hour. It’s condensing and, therefore, has higher efficiency, and one of the benefits of the product is that it has the ability to run off of a ½-inch gas line, which is the standard size of gas lines connected to most residential water heaters today,” Ogan explained. “One of the drawbacks for tankless is that most models require you to upgrade the gas supply line from ½-inch to ¾-inch. If you’re in a finished basement or don’t have easy access to the gas supply line, there isn’t much you can do to upsize it without significant added cost. With this heater, you can remove your existing water heater mount this new heater on the wall, and plumb it right up with the ½-inch supply line.

“The new tankless product launched in April and is receiving a lot of interest from the market. It’s great for a bath or bath-and-a-half home up north, and down south it’s good for a 2-bath home,” Ogan said. “There are a lot of homes like that out there.

“We’re excited to bring it on,” he continued. “It’s kind of niche because of its size, but it is perfect for a lot of homes out there. You’ve got empty nesters, young couples in starter homes, multifamily projects, and even cabins, cottages and vacation homes. Sometimes in those second homes, owners want a solution that isn’t constantly heating water when they aren’t there and just goes into action when there is a call for hot water.”I think with the affordable price, it helps close the gap between tankless and tank. It gives homeowners an opportunity to see some monthly cost savings and free up some floor space.”

“Because of its higher efficiency, the flow rate for this new heater is similar to the output of lower-BTU non-condensing tankless heater. So it’s a great retrofit for tank type as well as lower-BTU non-condensing tankless water heaters,” Ogan said.

As interest grows, so do questions and the need to get information out to owners, designers and installers.

“ People are still learning about the technology,” Ogan said. “That tells me there is a lot of opportunity to continue to educate contractors and homeowners about the benefits of tankless water heaters.”