MORE BANG FOR YOUR BUCK: Tankless water heaters

RICHMOND, VA (WWBT) - Your hot water tank is the second biggest energy hog in your house. Many consumers are moving to tankless systems in order to save money.

Ikon Chen said goodbye to her old water heater and is saying hello to a tankless heater.

"I grew up in Asia, and they use them over there," said Chen.

Only about five percent of American homeowners use them. So what's the advantage of dumping the traditional heater? Well, size for one.

"A traditional tank water heater takes up about nine square feet, tankless water heater will take no floor space on the ground," said plumbing contractor Jason Fleming.

Other pros - the tankless system only heats water when there is a demand, which can take approximately 20 percent off your energy bill.

Depending on how much you spend on the tankless system, those energy savings can pay for the system within four to 10 years. Tankless heaters also last five to 10 years longer than the big water heaters. Plus, you never run out of hot water.

The downside - tankless systems can cost three times more to buy and install, and it's recommended that you have annual maintenance.

Many homes, especially older ones, require expensive upgrades that make them unaffordable.

If you don't have access to gas power, you have to get an electric model, and those can require an additional circuit. Electric models also use a lot more energy than gas, negating some of your savings. Ikon Chen thinks she made the right decision.

"I think it will definitely save us a lot of money," said Chen.

There's two more incentives to go tankless. Make sure you take advantage of a $300 federal tax credit. Plus, you can register for a $200 state utility rebate.

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