Heating the water in your house accounts for about 11% of your annual energy costs. Consider a 'flash' or 'tankless' model that can save up to 50% over conventional systems . Tankless initially costs about twice as much as a gas system, but the payback is quick plus you get 'endless' hot water, because it flash heats the water as you use it.

The old concept of keeping a tank heated up to 140 degrees all day everyday is rather inefficient given home use is often concentrated in morning and evenings, rather than the middle of the day. Basically, we may like to eat pasta, but it doesn't mean we should leave a pot of hot water boiling on the stove all day...

On-Demand systems cost between $400 and about $800 depending on the volume of hot water that you may need. The Europeans and Asians have used these systems for years, and improved the technology along the way.

The ROI Calculation is based on a system that produces 7 gallons of hot water a minute - enough for two showers and an appliance such as a dishwasher or clothes washer to run simultaneously. If you are already considering replacing your hot water tank, the you'll save even more because you can put the money towards the On Demand system.

On Demand ‘Tankless’ or ‘Flash’ heaters use about half the energy and are less than half the size of a conventional tank. The upper photo illustrates that the box only comes up to half of the height of the tank behind it, and the unit gets conveniently mounted on the wall. The ‘Flash’ heating element often requires a stainless steel exhaust pipe, so make sure that you or your installer thoroughly reviews the specifications.

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If you are considering radiant heat, or if you already have it, you may want to look into an On Demand ‘Tankless’ system to save money on heating the water. The manufacturers typically provide good details on the installation.