Do we really need 50 gallons of scalding hot water all the time?
Unless you take showers every half hour, the answer is probably no. Yet most homes and many apartment buildings are set up with individual tank water heaters that do just that. The waste is enormous: hot water accounts for 15-30% of your home's energy use.
So, how do they work, and what—besides the obvious energy savings—makes them green?
• Tankless hot water heaters sense demand and start working when you turn on the hot water tap. For a few seconds, the water runs cold, then lukewarm, then hot; how long it takes to get hot is a function of how quickly the model you choose heats water and how far the water has to travel through pipes to get to the tap.
• Most tankless hot water heaters work by burning natural gas or propane and sending cold water through a heat exchanger. Some models can use electricity, though they typically can't deliver the same volume as gas models: fine for sinks, less so for showers.
• A less common green attribute: tankless heaters are a lot smaller. If you're dealing with limited space, getting back the 4 square feet a regular water heater eats up can be priceless. If you're building, that's 4 square feet you don't have to build, heat, and cool. Some tankless heaters can even be installed outside!
Manufacturers of whole-house hot water heaters include Rinnai and Bosch.
Treehugger's post on Tankless Water Heater myths -- install a tankless hot water heater, and the Hinkle Charitable Foundation will give $100 to a non-profit working to "combat global poverty and climate change."
The Federal Tax Credit of $300 expires soon. This link is to a commercial site (the Department of Energy site is pretty wordy), so proceed with caution.