Tankless water heaters centralized vs point of use

There are  two  fundamental layouts of tankless water heating systems for the home:

• Centralized tankless water heater
• Point-of-use (POU) tankless water heaters

Both centralized and Point-of-use heating systems have their merits, typically:

Centralized tankless water heater

What is a centralized water heater?

• This is the traditional “single” water heating system for the entire house, i.e. one tankless water heater for the whole house.
• It is typically located in your garage or basement.
• A centralized tankless supplies hot water to every faucet, shower, or dishwasher in your home.

In the United States, we most commonly have centralized water heating systems installed in our homes. Most of these systems are both centralized and storage based, meaning we will have a single water heater in our basement, garage, or a closet that distributes hot water to the whole house. In any but the most modern houses, it is likely that that the current water heater will be a storage tank water heater.

Advantages of a centralized tankless water heater

• An endless supply of hot water for all of your uses.
• Operational costs may be 30%-50% less than the storage water heater system replaces.
• Often easier to install. When replacing an existing water heater, since most houses in the U.S. will have been constructed to utilize a centralized water heater, required utilities (water, gas, electric) will already be present where the existing water heater sat.
• Venting may also be available at that location.
• Generally, a single centralized tankless water heater will be cheaper to purchase and install than multiple, smaller, point of use less water heaters.
• Often the plumbing for incoming outgoing distribution of water can be reused without much effort or added expense.

Disadvantages of a centralized tankless water heater

• The time lag to access water (at, e.g., a shower) will likely not improve as there is still cold water in the pipes between the water heater and the shower.
• Some modifications may be required for proper venting and/or for the size of the gas/electric and water lines coming to tankless water heater.

Our best-seller centralized tankless water heater: Rheem RTGH-95DVLN 9.5 GPM Indoor Direct Vent Natural Gas tankless water heater

Model: Rheem RTGH-95DVLN 9.5 GPM Indoor Direct Vent Tankless Natural Gas Water Heater.
Dimensions: 27.5” H x 18.5” W x 9.75” D
Weight: 79 pounds
Flow rate: 9.5 GPM
Demand type: High-demand, most suitable for larger homes up to 4 bathrooms.

Read our review of Rheem RTGH-95DVLN Indoor Condensing Direct Vent Gas Tankless water heater.

Point-of-use (POU) tankless water heaters

What is a Point-of-use tankless water heater?

• A POU is a dedicated tankless water heater to one specific use or location (for example, a kitchen sink or a shower).
• A POU is not for the whole house; it takes multiple POU tankless water heaters to supply hot waters to an entire house.
• Typically you want to install a POU as close as possible to the outlet that needs hot water. For example, a POU under a kitchen sink.
• Most point-of-use tankless water heaters are electric and are equipped with either horizontal or vertical mounting options.

If you are from Europe or Asia you may already be familiar with the concept of having multiple, smaller tankless water heaters distributed throughout your house.

Advantages of a Point-of-use (POU) tankless water heater

• Provides instant or near instant hot water where you need it with no time-lag.
• Most effective for a single hot water application, for example, a washing machine or a bathroom sink.
• A great option as a booster for a traditional storage tank system.
• An effective on-demand option for a shower even when you have a traditional storage tank water heater.
• Provides an endless supply of hot water.
• Likely cheaper to operate than a storage tank system.

Disadvantages of a Point-of-use (POU) tankless water heater

• Initial cost likely greater than centralized tankless water heating systems, if you are installing multiple POUs for the entire house.
• Providing utilities to multiple points of use may be more difficult and expensive.
• Generally only used with electric tankless water heaters, which likely have a higher operational cost than a gas tankless centralized heater.

Our best-seller point-of-use tankless water heater: Bosch Tronic 3000T Electric Tankless Water Heater

Model: Bosch Tronic 3000T electric tankless water heater.
Installation type: On-demand electric water heater for point of use.
Flow rate: Low-medium-demand 4 GPM, suitable for two sinks.
Dimension: 13.75″ W x 13.75″ H x 13.5″ D
Weight: 17.4 lbs.

Read our review of Bosch Tronic 3000T 4.0 GPM Electric point-of-use water heater.

Our personal experience with Centralized and Point-of-use tankless water heaters

Centralized tankless water heaters

In our home, we replaced the storage tank gas water heater with a high capacity centralized tankless gas water heater. This was a good and easy choice because:

• The initial purchase price was close to the same as replacing the old storage tank system with a new storage system
• Endless hot water
• All utilities were already at that spot
• Venting was easy
• All hot water distribution lines (to the dishwasher, showers, etc.) were right there
• The tankless heater took less space than the storage tank system it replaced
• The tankless heater consumed less gas than the system it replaced

Point-of-use (POU) water heaters

We recently spent an extended period of time in a large apartment in Barcelona, Spain, where all three bathrooms, the kitchen, and the laundry room each had their smaller tankless water heater. This point-of-use tankless system was the right choice for this apartment for several reasons:

• Endless and instant hot water
• Retrofitted to a much older building where it was easier to install electric lines and small tankless systems in each bathroom, kitchen, laundry room, etc.
• Installing hot water distribution lines was easy because of the short runs.
• The total system was lower energy use than a conventional water heater.
• No venting was required.

Summary

Choosing centralized vs. point-of-use tankless water heating systems is frequently a matter of what already exists in your home, what utilities are available, and how important instant water is for you.

• In the United States, most people would probably choose a centralized tankless hot water heating system for a house.
• If you own a much older building and/or you highly value instant hot water you may choose a point-of-use tankless hot water heating system.
• If you want on-demand for just a single shower or a sink, a point-of-use tankless is most effective.

We feature both centralized and Point-of-use models tankless water heaters. Check out our recommended list of top-rated tankless water heaters.