Thanks, but no tanks

Building code requirements limiting energy and water use and government initiatives encouraging conservation are becoming increasingly important as population growth and electrical consumption increase demand on water and energy supplies.

An on-demand tankless water heater can help.

In years past, most tankless heaters sold here were electric point-of-use units with limited capacity, relegating them to consumer niche markets, such as in-home apartments and vacation homes with low hot water demand. The development of more efficient natural or propane-fired units and the introduction of high-capacity, whole-house gas-condensing units have made tankless a viable alternative.

Tankless units account for 5% to 8% of all water heaters sold. Gas-condensing units — which increase efficiency by using exhaust heat to warm water — account for almost a quarter of the 400,000 tankless units sold in the United States, said Trey Hoffmann, global product manager of Rinnai America in Peachtree City, Ga. The units initially cost more, he added, but their greater efficiency results in lower utility bills.

Milwaukee-based A. O. Smith recently introduced a "hybrid" unit that combines the best featur