Tankless water heaters use more energy during the time in which they’re on, meaning that for the time in which they’re running, they’re costing more money.  The upside is that they’re running much less frequently, as in: only when you need it instead of all the time.

The tankless heaters cost more for purchase and installation than tank heaters, but their lifespan is double and efficiency higher.  This means that, while there is a higher initial cost, the homeowner is saving money every month with their new tankless heater over the lifespan of the tankless heater (avg 20 yrs).

There are currently tax rebates for the purchase and installation of tankless water heaters with an energy factor (EF) of .82 or higher in a primary home.  What was once a $300 rebate on the stimulus plan, is now 30% of purchase and installation cost up to $1,500.  The new tankless heater must be installed by December 2010.

Maine also has tax rebates for the purchase and installation of a tankless water heater.  Improvements to the home’s energy efficiency by 25% will result in a rebate of 30% up to $1,500.  Improvements of 50% energy efficiency will cover 50% of the product and installation cost up to $3,000.  The funds will be available on a first-come, first-serve basis to those who meet the requirements.

New Hampshire has similar rebate programs.  Their requirements are similar, so homeowners should check to see if they can apply.