You may be aware that the Department of Energy's latest efficiency standards for residential water heaters took effect on April 16. What you may not know, however, is that these updates come with significant changes to the process of selecting, installing and maintaining your water heater. That's why it pays to do a bit of extra research on the issue before your current model becomes unusable – rushing into a new purchase could leave you stuck with an oversized water heater and a handful of expensive loose ends. Researching cost-effective alternatives like going tankless is can help you identify ways to avoid the extra expenses that come with installing the latest generation of tank-type heaters.

Go tankless to avoid paying extra for hot water.

Size changes create new concerns
According to The Plain Dealer, consumers nationwide will see a change in water heater design now that manufacturers have updated their selection to meet the DOE's new standards. While the average efficiency of these models is expected to increase by about 4 percent, this improvement comes with the downside of larger, bulkier tanks. The addition of extra insulation and components to improve efficiency also increased the diameter and height of tank-type heaters, creating new issues for homeowners in need of a replacement. After all, a more efficient model won't do you much good if you can't fit the water heater in your home.

Sadly, this will likely be the case for thousands of homeowners with water heaters installed snugly in the corner of their basement or in a small storage space. Fitting one of the new water heaters into your home could involve remodeling and adjustments to the interior of the building. In addition to making the water heater replacement process more complicated, resizing your household to fit a larger water heater is bound to be very expensive. Doing your due diligence by investigating alternative solutions, such as tankless water heaters, could help you save thousands of dollars in combined costs.

Bigger models will mean a premium on labor
Another cost factor that you'll have to account for when installing a new water heater is how the change in size will impact the cost of labor. With the size and weight of water heaters on the rise, plumbers and contractors have had to adjust their installation process accordingly. For example, the increased size of a tank may mean that a task that was once a one-person job may require a helping hand – the cost of that extra labor gets passed onto the consumer in the form of a higher bill. The Pittsburgh Post-Gazette predicted that total installation costs could rise by 35 percent.

Tankless water heater models are a natural solution to the issues posed by a larger tank. In fact, many of these appliances have exceeded the current efficiency standards for years. Tankless models heat on-demand, eliminating the need for a large reservoir. As a result, these models are also significantly smaller than their tank-type counterparts, just 10 percent of the size of an average traditional heater. This design simplifies the installation process, makes it easy to install tankless water heaters wherever they are necessary and helps you avoid all the inordinate costs associated with the new generation of water heaters.

Going tankless boasts plenty of additional savings
Installation isn't the only area where going tankless offers cost-savings over sticking with tank-style models. Maintenance, for example, is minimal for tankless models because they do not store large amounts of water on a regular basis. Furthermore, high-performance tankless models are known to perform at full capacity for twenty years. This long-term performance is a huge advantage over typical models, which typically lose their efficiency after a single decade.