Point-of-use water heaters: what they do and when they're worth it

What point of use means

ENERGY STAR explains that the term is used because water is heated very near the sink, shower or bath where it's used, instead of at a central heater. Some heat is always lost in the pipes between a central water heater and a faucet; heating water at the fixture cuts that loss, and ENERGY STAR says POUs are often used to boost the temperature at a fixture that is a long way from the central heater.

Mini-tank vs tankless point-of-use

A. O. Smith describes both: mini-tanks preheat reserved water and can run out during high demand; tankless units heat water as it passes through, giving a continuous flow.

Can a point-of-use heater run a shower?

Sometimes, with the right unit. A. O. Smith says its mini-tanks are designed for single-use applications such as a single low-flow shower or one or two sinks, and that a shower needs more than a single faucet. For tankless POUs, the specification sheet tells you. Stiebel Eltron's DHC-E 12, at 240V, raises water temperature by about 54°F at 1.5 gallons per minute and about 36°F at 2.25 gallons per minute. That rise is added to the temperature your cold water arrives at, so the colder your incoming water, the lower the flow you can heat to shower temperature. A whole bathroom or several fixtures at once usually call for a full-size heater (see tank vs tankless water heaters and what size water heater you need).

When a point-of-use heater makes sense

ENERGY STAR lists these as more likely to save energy and money with a decentralized setup:

• fixtures far from the other fixtures and from the main heater;
• low daily hot water use, for example less than 20 gallons a day;
• remote bathrooms or hot tubs;
• additions, where it suggests a POU heater and only cold water plumbing to the new space.

ENERGY STAR also says adding a POU at a distant fixture may be the best option for system-wide efficiency, compared with turning up the main tank's thermostat to compensate. A. O. Smith adds that most mini-tank installs are in small homes, apartments, garages and mobile homes, or wherever a fixture is far from the main heater.

When it doesn't

• As the home's only heater in a typical family house. A. O. Smith says mini-tanks aren't equipped for large demands.
• As a backup for solar or geothermal water heating. ENERGY STAR says POUs are not suitable backups because they can't carry a household's full hot water demand when those systems aren't running.
• Without the electrical capacity. A tankless POU drawing 40 or 50 amps at 240V needs a circuit sized for it. Stiebel Eltron's sheet lists minimum breaker and wire sizes, and says to check local codes.

If the main heater simply runs out too fast, the fix may be the heater itself (see hot water runs out fast).

Installation basics

A. O. Smith says a mini-tank connects directly to a cold water supply: cold water fills the tank, an electric element heats it to the set temperature, and opening the faucet releases it. Sizing depends on the fixture's flow rate. ENERGY STAR says costs and benefits should be weighed carefully before going decentralized. Have a licensed electrician handle any new 240V circuit, and check whether your area requires a permit (see do you need a permit).

Running costs

A point-of-use heater doesn't change electricity prices, but it can cut the hot water lost in long pipe runs, which ENERGY STAR identifies as wasted heat. What a fixture costs to heat still depends on how much hot water it uses and your rate. For how water heating costs compare by fuel and state, see cost to run a water heater.