It appears that there are many reasons for liking energy efficient tankless hot water heaters! I'll review the pros and cons, but you'll have to make the final judgment as to whether or not they're for you.

Mostly they have a longer life expectancy, save money, save energy, take less space, and have an endless supply of hot water.

First there is the life expectancy. Make sure that you consider this when you are doing your calculations. The life span for a regular hot water tank type heater will probably be about 10 to 12 years. Of course there are factors that will change that, such as the quality of your water. The life span of a energy efficient tankless water heater will possibly last 20 years. And I did find some with a lifetime warranty.

There seem to be a lot of numbers floating around as to the actual amount of savings. The energy efficient tankless water heater could be as much as 40% more energy efficient, depending upon who you talk to and your personal use habits. The standard water heater keeps water at a steady temperature and is always reheating the water. The tankless, also known as “on demand” type of water heater only heats water when it is called for. Consider the savings if you went on vacation or even if you didn't normally use hot water for hours on end.

The space saved is an additional benefit. Since they are mounted on the wall, they do not use any floor space, and they can be mounted closer to the point of use. This gives you a great deal more flexibility when choosing a location. You may also want to consider having more than just one. For instance, if you had a far away area with minimal use, you could install a smaller unit. This would take some of the burden off of the main heater, and put the water closer to where it is needed.

The endless supply of hot water is a big benefit for larger families. There's nothing worse than being the one in the shower when the hot water runs out! And of course it seems to take forever before there is hot water again.

There may also be a federal tax credit of $300. The water heater would have to have an efficiency rating of .80 minimum to qualify. They do not all meet this number.

You can also check to find out if you qualify for any state or local incentives or rebates. Go to www.dsireusa.org to check.

OK, this all sounds good, but what are the disadvantages?

First there's your ground water temperature. If your ground water is very cold, it may take a much bigger heater to provide enough hot water. The cooler water restricts the flow rate.

Some water heaters require a large discharge system. This may make it hard to deal with if you're installing in an older home or business. Obviously they are better suited to new construction.

There have been complaints of the time required to get hot water to the point of use. Now I don’t know about you, but the only way that I get hot water immediately is if it has been used very recently. So I have to wait anyway.

This may not be a do it yourself job. Most water heaters will require licensed installers to keep you from voiding the warranty.

So how do you decide if energy efficient tankless water heaters are for you? You should contact an installer. He should have numerous questions about your use, location, ground water temperature, and your present cost. He should be able to go over his calculations with you and show you how he reached his conclusions.

Just remember that they are trying to make sales. Make sure that you are confident with the dealer and the figures. It would probably be better for you if they sold more than one type. That way you could see the difference between a newer conventional water heater and the newer energy efficient tankless water heaters!