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Are tankless water heaters for you?

Thirty percent of a home's energy budget goes to heating water for cleaning and bathing. Some homeowners are looking to new and efficient tankless water heaters as an option on saving money on water heating costs and saving space around the house, as tankless heaters are much smaller than traditional water heaters. Consumer Reports found that while tankless heaters that use high-powered burners to heat water as it flows through the unit to provide hot water on demand are 22 percent more efficient than gas-fired hot water tanks, there are some pitfalls as well. Tankless heaters tend to be more expensive than traditional water heaters, so it could take several years for the average homeowner to recoup his costs in terms of energy savings. Also, inconsistent water temperature is a frequent complaint among testers of tankless products. The hot water does not come instantaneously, and much like standard water heaters, if there is residual cold water in the pipes, this will have to be forced through first before the hot water arrives. Because many tankless water heaters work with electric controls, in the event of a power outage, hot water could be lost for the duration of the outage.