I have a 30 gallon electric conventional hot water heater that started leaking. It is in a cabinet above the washing machine; a tight fit:

Current water heater

Since it is such a cramped space, I'm considering a tankless unit, to make it a little easier (for the plumber) to replace, and much easier next time when the new tankless goes out.


  • Will it be more economical in terms of electricity usage? Wild estimate guess is fine. 20%? 50%? (Current WH uses 4,721 kwh/ year per Energy Guide sticker.) Looking at maybe a 27 kw tankless.
  • Electrical supply: Current breakers appear to be a 2-gang 30 amp; new 27 kw tankless requires "3 x 40 AMP double pole breakers" -- would I be able to have an electrician replace the current breaker with a 3 x 40 amp breaker? Here is a picture of my 200 amp service panel:
  • [edit] I've read that electric conventional WH have a useful life of 15-25 years; this has been our experience. Do tankless WH have a longer lifespan?

Current situation: 1200 square foot house, North Texas, USA; 2 adults. From looking at the specs of a potential replacement tankless, looks like a 27 kw tankless unit will fit our capacity needs.

Electrical Service Panel images, labeling is mine through trial and error; The "Main" is wrong as pointed out below.:

Service Panel Breakers Service Panel Label

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    – Michael Karas
    Mar 21, 2021 at 17:35

3 Answers 3


TLDR: Replace house's electric 100A resistance strip-heat "furnace" AND 40A its air conditioning with a 30A wide-range heat pump that does not require emergency heat. Enjoy lower electric bills all year. Install subpanel to allow three 40A breakers to be in the same panel.

An on-demand is a great idea.

And 27 kw is serious enough that your project isn't likely to end in frustration with tepid water, as will happen when they are carelessly undersized. Now keep in mind a few design aspects.

Flow is everything -- when you max out flow capacity, temperature will drop, and the cure is to reduce flow. You can do a lot of good right up front by carefully sizing your loads, e.g. a "low flow" shower head.

That long slug of cold water sitting in the hot water piping is still going to be a problem. All that water must be pushed out of the pipe by hot water: that is the delay you get in the far rooms. Locating a tankless centrally will do nothing to cure that - it will be just as bad, or worse if you use low-flow strategies e.g. low-flow faucets and shower heads.

One answer to this is distributed, smaller heaters. At extremes, the British have "electric showers" where the shower has a built-in on-demand heater right at the showerhead - of 8500-9500 watt capacity (40A), good for a little over 1 GPM, but instant hot water - no waiting. I don't know that I'd go that far, but certainly if your house has 2 or 3 "islands" of hot water use far apart, 2 or 3 smaller units may be worth considering (or even 1 per shower-equipped bathroom + 1 for kitchen/laundry).

You won't be able to go much over 27 kw, unless you "go nuclear" with a 400A service upgrade, in which case limit total water heaters to 48 kw.

That panel has some issues.

It is a "Split-bus" aka "Rule of Six" panel. That means it does not have a main breaker, those 6 large breakers are together the main breaker. That was a trick done in the 1960s-70s to avoid the then-very-high cost of 100A and 200A breakers. However it's a safety problem because those breakers together can draw well over panel rating, and nothing protects the panel. The safety came from the house's original load calculation done at build time, but that totally counts on the load calculation being re-done everytime anything is added to the panel. And real world, that does not happen.

This is not a Code violation because it was legal at the time it was installed... but it's something to take care of if it aligns with other plans. Separate from this, you need additional breaker spaces anyway. So....

  • You could fit a new 200A panel, make it the main panel, make the split-bus panel a subpanel of it (even supplied via "thru-lugs" removing need for another 200A breaker).

  • You could replace the meter pan with a 200A "Meter-main" which also includes some spaces for large breakers, which will provide the extra breaker spaces you'll need.

  • If you are forced to upgrade service to 400A, this will happen as a side-effect. (400A meter-mains provision two 200A breakers, once again because of the high cost of too-large breakers).

That "furnace" is in the way.

You have an all-electric neighborhood. There are "good" ways and "cheap" ways to provide heating in all-electric neighborhoods.

  • Worst: electric strip/toaster heating. Cheap to install, murderous on the electric bill. Only makes sense where a region has a glut of unusable nuclear/hydro baseload and has low power pricing/tariffs to match.
  • Compromise: Early or cheap electric heat pumps which work great, but the coldest temperatures are out of their working range. Therefore they need massive amounts of cheap electric strip heating, as "emergency heat". This emergency heat must be fully provisioned, i.e. calculated as part of the house's load calculation, even though it's rarely used.
  • Best: Modern high-range heat pumps which work at any plausible temperature (in Texas, at least, yes including your -5F of late). These only need to be provisioned for their heat-pump draw.

What you have now is toaster heaters, and they take a huge chomp out of your available electrical service, to the point where there's no room for 27 KW of on-demand water heater. The only way you can have both toasters and on-demand is to upgrade your electrical service to "Class 320"/400A.

Every possible scenario will cost you a moose-load of money. The question is only how:

  • Stand pat. Buy a tanked water heater, keep the toasters and old inefficient A/C, and pay outlandish electrical bills (ouch, every month, forever).
  • Install 400A service (big ouch, once), install the on-demand (yay) and keep the outlandish electrical bills (ouch, every month, forever)
  • Install an advanced full-range heat pump (ouch), and use its generous 100A provision for the on-demand heater (yay). Lower electrical bills even in A/C season due to the high SEER number of modern heat pumps... massively lower electric bills in the winter, and no more being afraid of the thermostat.

Choose your poison.

  • Thanks for all the great options and info. We have a fairly new (10 years old?) AC/heat unit, so at least the equipment there is probably okay. We did have an issue where the AC causes a surge and caused an arc in the service panel but fortunately no fire, just a burnt smell, maybe 5 years ago. So new service panel sounds like a safe bet. Mar 19, 2021 at 21:12
  • @MarkStewart Wait, if you have a modern-ish heat pump, it's on the A/C breaker... right? Does it even need or use the 100A breaker? E.G. for emergency heat? Did it kick on in February? Mar 19, 2021 at 21:26
  • Well, that whole AC/Heat pump business is a mystery to me as far as heat pump terminology goes. Probably topic for another question! Basically all I know is in February the heater was on most the time during our Texas Troubles, $300 electric bill, etc. Seems like I have a Split System, from 2003. Mar 19, 2021 at 21:42
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    Ah, outside unit label just says "RHEEM AIR CONDITIONER" -- so ... inside unit is the old heater style, not a heat pump?? Mar 19, 2021 at 21:55
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    @JimStewart my bad water heater was around 20 years old. Yes, slab foundation. I had the water heater replaced yesterday, and the bad one is now in appliance heaven. But the comments and answers helped inform my best decision for short term was to replace like for like. Mar 22, 2021 at 3:27

Depending on the energy fees and purchase/installation price and possible subsidy programs, a heat pump could be considered. A heat pump for domestic water would save at least 50% of the energy costs, often 60 to 70%. Perhaps photovoltaic (also subsidies available in many places) could help to reduce the total bill, considering in- and off- feed fees. Texas sounds like sunny days.

A tank less heater may save costs because the stand -by losses are very low, and because the anti-legionella heating is not necessary.

But the power demand is huge, most likely the panel needs to be changed.

The power demand for (electronically controlled) water heaters can be decreased by installation of a counterflow heat exchanger at least for the showers ( e.g. see Rob the Plumber videos on YT). In practice, it is 20-50% decrease for showering.

A better answer of the ROI would be revealed by an Excel sheet with all data mentioned above, if the average warm water demand profile is taken into account

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    For this installation in the closet, A heat pump would not be practical.. I have a heat pump. For one, it needs space, for extraction for the heat and a place to vent the cold air out. Also the heat pump itself takes a lot of space, His 30gal is cramped, a heat pump would add a 1/3 more length to the existing height.. Mar 20, 2021 at 0:10
  • @Programmer66 That is a common problem when replacing an old environmentally unfriendly heating system with a more friendly one. And exactly for that reason, in many places (f.e. Europe), the subsidies are extended for the work and costs to make more space for the installation of heat pumps.
    – xeeka
    Mar 26, 2021 at 14:53

I would agree with saving money by not having a large tank. There will be a lot of wasted power when the appliance is not in use. Individual heating as in showers is a possible answer, but you will need a qualified electrician as I am sure you will need a new consumer unit with individual trips so any problem would not leave you without power. It would need a very large amount of power as three or four water heaters could be in use at the same time. Depending on how you use the hot water (sinks,basins and baths etc ) In my opinion I think you should stay with a new tank, it should be cheaper than dealing with new consumer units and massive power you will need available for separate units. It would be a quick and suitable answer : you may not need a tank so large ?

I am not sure how the water is heated , but you could easily have a second immersion to boost hot water with quicker results. You could also have a timer so the hot water would not be needed when you were not in. My parents had a similar system with just one fast water heater below the kitchen sink in a cupboard below.

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    You might note that the question stated that the OP is in Texas, USA. We don't do "consumer units" or ring circuits here. Everything, in particular large loads like water heaters, get their own branch circuit, so a trip on the water heater will have no impact on any other electric devices in the house. BTW, welcome to Home Improvement! Take a moment or two to take the tour to learn how to get the most out of this site.
    – FreeMan
    Mar 19, 2021 at 16:58
  • While "Point of Use" heaters are a thing in the US, we don't stick them inside our shower stalls. Also, a 30gal tanked heater is fairly small by US standards... Mar 19, 2021 at 22:54
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    Dang, I'm going to say this one more time: Modern electric tank type water heaters are VERY WELL INSULATED. Once the water is heated to desired temp, it stays there with very minimal loses (looses?) I really doubt there would be substantial electricity savings with a tankless electric. Tankless electric are expensive to properly provision, they use a LOT of power. Not meaning to be a greenie weenie but the last thing we need now as a society is equipment like this that puts a sudden large load on the electric grid. Mar 21, 2021 at 13:12

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