If you’re like a lot of contracting professionals, chances are you’ve been getting more questions about tankless water heaters these days.

“It’s a conversation we have now on a daily basis,” says Ryan Williams, general manager of 128 Plumbing, Heating, Cooling & Electric, in Wakefield, Massachusetts. As customers have become more energy- and resource-conscious, he says, tankless water heater installs have gone from an infrequent occasion to a full-time offering.

And yet, even as tankless water heaters have become more prevalent, determining the right configuration for a client’s home isn’t always straightforward. Large, high-efficiency propane tankless water heaters on the market today can suffice for a family of four. But in some cases, installing two smaller units working in tandem may be the better—albeit more expensive—solution.

“For the average home with two-and-a-half baths, one large unit is probably enough,” Williams says. “On the other hand, for those dozen days a year when it’s below zero outside, two units might be better to make sure your kids can still take a hot shower.”

Picking the right system

Factors to consider when deciding how many tankless units to install include the number and type of fixtures throughout the home requiring a hot water connection, the duration and frequency they are used (including peak demand rates), and how cold the groundwater in the area gets.

Tankless water heater capacity is determined by two main factors. The first is expected water use, in gallons per minute (gpm), at peak demand. The second factor is how much that water will need to be heated, compared with its incoming temperature, in order to be hot enough for use in household applications.

Installing two small tankless water heater units is typically more expensive than installing one large one, but it can ensure clients have hot water on demand for a variety of simultaneous uses.

For this example, assume the incoming groundwater temperature is 50 F. Though actual groundwater temperatures vary across the U.S., 50 F is considered to be roughly average according to the U.S. Department of Energy. The typical showerhead delivers 2.5 gallons per minute. In most cases, the water should be heated to at least 120 F, so the home will need a tankless unit that can heat 2.5 gallons per minute by 70 degrees. Most propane or natural gas tankless water heaters on the market can handle a rate of 5 gpm at a 70 degree temperature rise.

That calculation covers a single point of use with a dedicated unit. As more fixtures are added, demand on the system increases and that 5 gpm rating can quickly get overwhelmed.

“We tell them, the good news is, you’ll never run out of hot water,” Williams says. “The bad news is, if you want to take two showers and do a load of wash at the same time, you might not be satisfied with how hot your water gets.”

Ryan Williams (right), general manager at 128 Plumbing, Heating, Cooling & Electric, and company president David Williams discuss a tankless water heater installation.

To determine peak demand, add up the gpm rates of all the fixtures in the house. Then, determine the temperature rise needed during winter in the area, and compare that to manufacturer specs. Keep in mind, even if the client says they won’t be using all of the fixtures at once, code requirements may dictate installing enough capacity for that worst-case scenario.

“Some clients say, ‘Only two of us live here, so why do we need such a large unit, or multiple units?'” says Daniel LaGarce, president of Budget AC, Heating and Plumbing, in St. Louis. “But if they have three or four bathrooms, you need to be able to supply the peak demand.”

Costing out multiple units

Those peak demand scenarios are why pros shouldn’t assume an undersized system will be able to cover their client’s full range of needs. With a tankless system, however, oversizing isn’t as big of a concern. Oversizing a traditional tank water heater would result in significant wasted energy over the life of the unit, but tankless units vary their flow rates depending on demand. As a result, having excess capacity doesn’t necessarily mean a tankless system is using more energy.

“The newest, high-efficiency units have a 96 percent efficiency rating,” says Bob Rush, president of 1 Stop Mechanical, in Woodbridge, Virginia. “They have a variable fire rate, so they only use the amount of fuel that’s necessary at the time.”

Of course, adding another unit can significantly increase the cost to the client.

“We tell them, the good news is, you’ll never run out of hot water. The bad news is, if you want to take two showers and do a load of wash at the same time, you might not be satisfied with how hot your water gets.”

Quotes received from contractors for this article ranged from $3,800 to $6,500 for a single, whole-house tankless unit installed. Adding another unit could bring $2,000 to $3,000 more in costs, which is why many homeowners and contractors will opt for a single larger unit, if possible, rather than two smaller ones.

To determine whether one or more tankless units is right for a home, contractors should help owners understand their consumption habits and how systems can be sized to meet their expectations. First, determine peak demand. Then try to gauge actual usage and lifestyle habits. Finally, look at system prices relative to your client’s budget. Put in as much capacity as those three factors will allow in order to achieve a balance between cost and comfort.

“We ask a lot of lifestyle questions of the people living in the home,” Williams says. “Then we apply the quantitative approach to add up peak demand in terms of gallons per minute. What we try to give them in the end is a happy medium.”

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Joe Bousquin

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