Question: I keep reading about tankless hot water heaters. Are they really a good option for a commercial facility? I thought they were just for homes.

Answer: Actually, tankless hot water heaters are great for commercial buildings—especially restaurants, where, on average, 16% of total energy costs goes towards water heating. With a properly sized tankless system, you can save up to 45% on your water heating costs.

Tankless water heaters are also known as on-demand water heaters because they’re exactly that:they don’t store water in a big, bulky tank, only heating it on demand. In a gas unit, a gas- or propane-powered burner is used to heat the incoming water. Electric models pass the incoming water over an electrical element. Electricity-powered tankless heaters tend to have smaller capacities, though, making them less practical choices for commercial establishments.

The main benefit of tankless hot water heaters is that, with no tank, you’re not paying to heat water that may not get used, reducing your water heating costs. But there are other benefits as well.

Tankless hot water heaters:

  • Tend to be 20-40 percent more efficient at heating water than conventional tank models, which also saves you money.
  • Are compact, and can be mounted on a wall or hidden in a closet—areas that wouldn’t be appropriate for a traditional hot-water tank.
  • Never run out of hot water.
  • Have a 20-year useful lifespan, and are easier to maintain than traditional tanks. Plus, many of their individual components can be replaced, meaning repairs are less expensive.
  • Often incorporate digital control panels for easy temperature adjustment. (Take a look at our DIY energy audit to see what temperature your water heater should be set at.)

(And hey—if you’re really interested in switching to tankless technology, you can save $150 off your installation with our tankless water heater rebate.)

Do you have a tankless water heater at your restaurant? Share your experience in the comments section.

Image credit: JohnE777