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Point of use installations are where tankless units really shine. A tremendous amount of water and energy is wasted when there is a long pipe between the water heater and the point of use. When you finish using the hot water the hot water left in the piping cools off...wasted energy. When you want hot water you have to run the cooled off hot water down the drain before you can get hot water...wasted water.
Since demand hot water systems can save a family of four between 10,000 and 15,000 gallons of water a year, by not having the pipe to begin with you should save just as much, but unlike the pumping systems, when you finish using the hot water you do not leave a pipe full to cool off, so you save even more energy!
Since it takes so much energy to quickly heat water, the burners on gas tankless water heaters are larger than those on tank type heaters. Thus the venting usually has to be larger in diameter than that of conventional water heaters. For very high efficiency units the venting has to be stainless steel.
In order to achieve higher efficiency more heat is sucked out of the exhaust gases and so the gases are cooler and acids can condense on the walls of the venting. That is why they need to be stainless steel.
Many tankless water heaters com in both inside and outside models. The outside models are for mounting on an external wall of the bathroom or wherever the fixture being serviced is located. This eliminates any venting problems.
Along with the large venting requirements, they often need a larger gas line than standard water heaters are plumbed with.
Some gas models require an outlet for power to run the electronic circuitry that regulates the temperature, and so during power failures these models will not operate. There are some models that generate the electricity they need to run from the flow of water through the unit. Clever.
The electric units don't suffer from the need for larger gas lines and venting of course, but they are even more limited in their ability to produce hot water on a gallons per minute basis. To get enough Kilowatts to heat a lot of water requires larger than normal wiring to carry the heavy current.
Typically a good sized electric tankless water heater will need a dedicated power run to supply it with electricity, and it's own circuit breakers.
Correctly sizing a tankless water heater can be a little tricky. Not only do you have to consider the gallons per minute at a given temperature that you want, but you also have to consider the temperature of the cold water coming into the heater.
In some areas the incoming cold water can be less than 40 degrees F and in other areas it's in the 50s or higher. This makes a big difference in the amount of hot water the unit can deliver. And the cold water temperature can change significantly from summer to winter.
Tankless water heaters have a minimum flow rate that is required to turn them on. So if you want a hot water stream from you faucet with a warm but not hot flow, you might find it difficult to achieve since to lower the temperature you typically adjust the ratio of hot and cold water with the fixture. But if as you lower the temperature and thus decrease the flow of hot water, the water heater may shut off due to the reduction in flow.
This can be a real pain if the pipe run is long, due to the inherent time delay produced by the trip from the heater to the fixture. Point of use installations are not as much of a problem.
By installing a point of use tankless water heater you will have implemented the greenest of the green in hot water systems. You will save energy, water, and money.
If you go the whole-house route, then you will definitely want a Chilipepper demand pump for your tankless system.