For years, replacing a water heater was as easy as removing the old model and replacing it with a new one of the same size, so much so contractors began designing spaces designated for the appliance with respect to those general dimensions. That's why so many water heaters are snugly placed inside maintenance closet alcoves and small indentations in the back of garages. Unfortunately, this trend did not account for technological progress and consumers will soon be feeling the cost of transition.

New federal regulations regarding efficiency for residential water heaters took effect in April of this year, requiring all manufacturers to retool their designs and produce more energy-efficient models. While some plumbers may have a stock of old designs stored on their premises, eventually these models will be sold and homeowners across the country will have to deal with taller, wider water heaters. Consumers will have the option of investing in a costly remodeling process to create space for the new heater or changing the way their home heats water by going tankless.

Tankless models only generate hot water when sinks and showers are in use.

Space issues likely come with costly remodeling projects
The size difference between the new and former generations of water heater models is considerable. According to the Casa Grande Dispatch, consumers can expect replacement models to be three inches taller and wider in diameter than their predecessors. In addition to the potential for higher labor costs due to the increased size and complexity of the updated appliances, consumers will have to manage fitting the heater into their home. Unless there is sufficient spare space to fit the tank in another spot in the house, remodeling becomes the alternative.

Consider the added cost of extending an interior space, removing and relaying concrete or any number of complex remodeling jobs that might need to be done to fit a taller, wider water heater somewhere in the home. If this new location is not within reach of the home's plumbing hookups, consumers may have to pay for extra plumbing as well.

Conversely, consumers can circumvent this entire accumulation of costs by investing instead in an electric tankless water heater. These highly compact appliances measure up to just a fraction of the size of traditional models, allowing them to be installed wherever is most efficient. They can even be mounted on the walls in multi-story homes. Best of all, tankless models won't require extensive renovation during installation.

Extra installations compromise whole house efficiency
In some cases, new water heater models will also require additional piping or venting technology to be installed to ensure the appliance runs at maximum efficiency. In addition to increasing the consumer's long-term maintenance expenses, the extra installations translate to more instances of removing and resealing interior wall materials. These renovations ultimately weaken the thermal barrier and compromise the long-term efficiency of the entire home.

Go tankless to save on installation costs
In addition to helping homeowners avoid the long list of extra costs that come with upgrading to a much larger appliance, going tankless comes with multiple benefits in terms of efficiency and long-term value.

Tankless models are 99 percent efficient and heat on-demand, meaning that they only heat hot water when sinks or showers are in use. Traditional appliances use energy constantly to heat an enormous tank. High-performance tankless heaters save homeowners this energy use, helping to keep the home's utility bills under control.

Tankless water heaters also deliver in terms of longevity. According to Today, tankless water heaters have an average service life of two decades, while traditional heaters begin to suffer in performance after just seven years.