Tankless hot water heaters come in two versions, models for interior installation and models for mounting outside of the house. Which one is the best for your application?
Indoor VS Outdoor Installation
There are a number of advantages to the outdoor mounted models, and not much to recommend an indoor installation.
Tankless water heaters are prolific to say the least in Asia. Space is at a premium, and the common practice in Japan for instance is to place the water heater on the outside of one of the homes walls. That way it doesn’t take up any indoor space.
Tankless hot water heaters are designed for mounting outdoors, and the outdoor models do not have a shorter life expectancy than the indoor models. The enclosures are made of aluminum and are rustproof. All the components are made to withstand the rigors of the outside environment, sunlight, rain, wind etc.
They also can incorporate a small electric heater to keep the heat exchanger from freezing in those locations where below freezing temperatures are possible.
Tankless Water Heater Venting
Tankless Water Heaters often require special venting (stainless steel) which can be fairly expensive. Some of the new high efficiency models are so efficient that they can use regular 4″ PVC for venting because the exhaust doesn’t get very hot, most of the heat being transferred to the water and not escaping up the flue.
Indoor installation can pose venting challenges.
Provisions must be taken to drain the condensate water and not let it drain back into the heater. This usually is done with a drain tee vent. It is a special vent piece that collects the condensate water and drains it through a small tube. That tube must be connected to a drain. An outdoor installation due to its very short exhaust venting does not condensate.
The condensate water is very acidic and if not properly collected and drained can damage the heat exchanger and shorten its life. Most manufactures will not warranty the heat exchanger if damaged due to improper condensate drainage.
Combustion Air Requirements
Tankless water heaters have burners that burn a lot more gas than a standard gas water heater, and that means the need a lot more air to mix with the fuel for proper combustion. Restricting the air available for the heater can cause problems like incomplete combustion, emission of carbon monoxide, and poor performance.
Some homes have the traditional water heater in a closet inside the home. For a standard water heater the air supply is sufficient but not for a Tankless unit which needs a whole lot more oxygen than the storage unit.
When installing tankless heaters in small spaces you should consider using a direct vent type tankless water heater. A direct vent heater draws its combustion air from outside the home.
Special double walled vent pipe is used that allows it to draw air from outside and send the exhaust air through the same vent pipe. These units are of course, substantially more expensive.
If installed properly the outside installation is the preferred location. Care should be taken to keep the water lines to and from the heater short and insulated for possible freezing and energy conservation.
It’s a good idea to read the installation and owners manuals, (usually available online), thoroughly before choosing the model you want for your home.