Updated on 09.22.09

The Simple Dollar Weekly Roundup: Water Heater Edition

Trent Hamm

Over the past weekend, our water heater finally gave up the ghost.

It’s been ailing for a while and we knew that it was on its last legs. During the several month period when our house was unoccupied before we moved in, the tank was left full of water, which caused some sediment to build up in the bottom. This meant that the heater was pretty slow to heat up (wasting energy) and incredibly noisy from the percolating sediment. Many of the pieces of sediment were too large to drain out, even if you removed the spigot.

To make matters worse, the pilot light would occasionally just go out on it. I knew there was something wrong – I could re-light it, but the light would go out again once a week or so.

Finally, last weekend, it just stopped working. The pilot light wouldn’t re-light. The water heater sat there.

I called in a repairman I trust and he started slowly stepping through the diagnostics on it. Once the faulty pieces were discovered by process of elimination, he offered me a quote (which I checked out) on both the replacement parts (which would have to be ordered) and labor or an entirely new hot water heater. After doing some math and estimating the energy savings, we went with an entirely new water heater.

Tanked or tankless? After doing the math, we had already concluded that, for our normal use, there wasn’t much savings with a tankless water heater – but there certainly was a larger up-front cost and some concerns with simultaneous use (like the dishwasher running while other people are taking showers). So, we chose a new tank heater.

So far, it works like a charm. The best part? No loud percolating – it was loud enough that it could be heard on the top floor while the water heater was in the basement.

Should I Invest While Still In Debt? I basically agree with the conclusions drawn here – it’s a bad idea to invest if you have any high interest debt at all and don’t have any personal savings built up. I’d add a third criteria – don’t invest unless you can clearly articulate what your goal is, because without that, you’re investing nearly blindly. (@ debt free adventure)

Are All Your Goals Materialistic Ones? I can’t think of a single major goal I have in my life that’s materialistic aside from wanting a home in the country (and the reason for that isn’t an ostentatious home, but one more in line with how we live). Almost all of my goals revolve around experiences – spending time with people or engaging in activities. It seems so natural and normal to me now that I sometimes almost feel uncomfortable recalling a time when my goals were really materialistic. (@ pick the brain)

Efficient Market Hypothesis and Supermarket Lines It’s often advantageous to stay put, even if the grass seems a little greener on the other side. Why? There’s usually a cost to switch – time, and often, money as well, plus intellectual investment. (@ my money blog)

The Priority List Whenever you have a giant goal, there’s usually an enormous list of things to do to reach that goal. However, if you don’t spend some time prioritizing that enormous list, you’re going to make a ton of mis-steps along the way. Planning ahead for any goal – and figuring out which steps are the most important ones – turns an impossible goal into an achievable one. (@ seth godin)

Time for Everything In almost every aspect of our lives, we seek to maximize the time we have to spend on whatever we want to do. Since that’s such a common human goal, many, many people try to subvert others from doing just that, through marketing and other means. (@ soul shelter)

Why “Having a Mission” Can Make You Happier. This is actually something I’ve noticed a lot lately with my kids. We often get out a ton of paper and draw on it (thank you, end rolls of newspaper). If it’s “free form” drawing, the kids tend to get distracted pretty quickly (and so do I). Instead, I suggest that we all draw pictures of something simple, like trees. If I do that, everyone is way more engaged, trying to draw interesting trees. A simple mission often makes things a lot more enjoyable, and it’s a technique you can apply in a LOT of areas in your life. (@ happiness project)

Pouring Concrete This is a great story about making goals concrete. It’s actually kind of similar to a story I’m telling in my upcoming book – I made a goal of my own concrete in a somewhat similar way. (@ jonathan fields)

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  1. Colin says:

    I personally would like to see your math on tank vs. on-demand. Would you mind sharing (perhaps another post)?

  2. Matt Jabs says:

    Hmmm, you & Nickel both had the water heaters go this week… must be something in the blogosphere.

    At my first home I had to drain the water heater every 6 months because we had well water w/a lot of rust etc. Now we have city water so the regular maintenance is needed much less often. Actually, I have yet to drain the HW in our new house and we’ve lived there 2.5 years… maybe it’s time.

    Thanks for the link!

  3. Kat says:

    The tankelss ones have the 30% tax credit, and VERY few tank heaters have it, are you sure that with that tax credit, that the tankless was still more expensive?

  4. nickel says:

    Based on what I’ve read in the past, your house is fairly new, correct? Just curious how old the heater was before it died.

    As Matt noted, ours went out this past weekend. I suspect it’s the thermostat, as it will successfully heat a tankful before throwing the breaker. The house is about eight years old, though, and the original owner did very little in the way of regular maintenance, so I’m not inclined to pour any money into it. The new one gets installed on Friday.

  5. Kevin says:

    I work for a plumbing contractor and I find your dilemma interesting. Your analysis of the tankless water heater is what we find with 75% of our customers. The upfront cost is high enough that the payback is usually around 10 years. That is obviously different for every house, and the tax credit does bring that number down. We get many inquiries on tankless water heaters because of the buzz they get for energy savings, but for most residences it is not as great a deal as it appears. I would be interested in seeing your calculations.

  6. AnnJo says:

    Another consideration in the tank vs. tankless choice:

    With my hot water tank, my house has a built-in 60 gallon emergency water supply, which I would not have with a tankless water heater. Storing (and replacing every six months) that much water would be a big chore, and the cost of proper containers is more than trivial.

  7. Amy says:

    Oh dear. There are two points to a tankless, saving energy, and having unlimited hot water. We have a tankless, and we can run washing machine, dishwasher, AND both showers simultaneously. We have never, ever run out. Have you honestly heard otherwise?

    Bigger cost upfront, and I don’t care how long it takes to get it back. The environmental factor is more important.

  8. Dan says:

    I’m disappointed you didn’t go tankless!!!

    Who ever runs the dishwasher while they shower? Come on now. If that is your only reason to not get one, you really duped yourself. This from the guy who has wholeheartedly changed the way he does things just to be a bit more frugel….

    Shower in the morning, laundry in the evening, dishwasher on a timer for night time. Save hundreds in gas bill.

  9. Kevin M says:

    Agree with the above, I’d love to see your cost/benefit analysis as well as research that shows you running out of hot water would be an issue. I’m going to be in your boat sooner than later…our HWH is 16 yrs old.

    @AnnJo – is water stored in a hot water heater safe to drink? What about the sediment?

  10. Andy says:

    1) From an environmentalist perspective, it would be better to spend extra money on insulating a house (or a neighbor’s house) than buying a tankless water heater. We should spend our green dollars to maximize green results!

    2) Tankless heaters aren’t really instant. Water is wasted waiting for the hot water.

  11. Kevin M says:

    @Andy – re #2 there is also water wasted waiting for hot water from a tank.

  12. Colin says:


    2) Doesn’t that depend on the location of the faucet relative to the heater regardless what kind it is?

  13. Jules says:

    Tankless water heaters are very common in Europe, and if it’s a newer model, there aren’t any issues.

  14. AnnJo says:

    @Kevin M, if your cold tap water is safe to drink, so is the water in your hot water tank. It all comes through the same water lines and contains the same particlates. The sediment is that common particulate matter found in your water supply, mostly calcium carbonate precipitated out of the water by the high temperature; you’d want to filter the sediment out if possible, but it’s safe to drink the water. In an emergency that involved possible contamination of the water mains (floods, for instance), you’d want to shut off the main line to prevent contamination of your supply.

  15. almost there says:

    The U.S.A. is decades behind in plumbing technology. 40 years ago while living in Japan we had a propane fired tankless water heater. It never ran out of water supporting a family of 6, with a dishwasher. Their TOTO toilets even have models that test your blood pressure and give UA results too. (Besides being paperless)

  16. Brandon says:

    The tankless credits are only for the really expensive heaters. Mine went out 4 months ago (beginning of summer), and I had them replace it with a new one. The cost of gas on my gas bill has gone from $15 a month to $1 dollar in the over the summer. I even keep the newer one on a higher temperature.

  17. Andy says:

    Regarding #11 and #12 on my second point.

    Yes, even with a tank water is wasted while hot water travels up the pipe. But plumbers I’ve spoken with say that more water is wasted with tankless systems. Not that water is more valuable that energy, but it also means you’d have to wait longer for hot water.

    I lived in Scotland for a while, and my house had small tankless water heaters around the house, so this problem was eliminated.

    Personally, I just purchased a new tank, and have spent my extra money on a high efficiency furnace, refrigerator, AC, clothes washer, light bulbs, etc. My energy use is fairly low. I just don’t think the tankless system is worth it.

  18. Evita says:

    I too ignored the signals that a dying water heater sent me (browning water and sediments passing through pipes) until it died and flooded my basement. Trent, you were LUCKY!

  19. Tall Bill says:

    You could hear the popping from upstairs? Did you know that a POP from a gas heater is due to water flashing into steam between sediment pieces at the bottom? You were very LUCKY in that you avoided a flooded basement or worse! Why was the pilot light going out? Was the vent corroded or blocked in some way, or was the access cover left off because it’s hard to get back in place? Regardless, from what you’ve shared about your home, I suspect it’s the original tank that should not have gone out so early. I hope the whole situation was checked when the replacement went in. Be well & the pic of your cute one was heart warming. Takes me back to when my daughter was little – now 6′ & opinionated ;-)

  20. Jean says:

    I too would be interested in your calculations re: tank vs. tankless. My husband had been stationed in Europe while he was in the military and loved the tankless heaters, so when our very old tank (in our very old house!) bit the dust about four years back, we went tankless at his insistence. I was doubtful, but honestly, it has already paid for itself in reduced gas bills–I was amazed. The “wait” is no longer than it was from the tank, and if this concerns you, use the “wait” water to refill Brita pitchers and a pitcher for plant watering. (Both of which we regularly do.) I think a lot of plumbers here overcharge for the install because they are unfamiliar with the product–you need to look for one who believes in and is familiar with tankless heaters, which requires some planning before the old heater craps out! We knew it was coming because our old tank heater was percolating like yours, so we had time to shop around. For me it has been like the front loading washer–I could never go back!

  21. Charlotte says:

    I’m with Tall Bill. I can’t imagine living with something that made that much noise and/or having to relight the pilot light and not having it checked out. Talk about dangerous!

    Did you consult Consumers Report when doing your comparisons and making your decision as to which water heater to purchase?

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