Water heater is leaking from the top
 

Yup. Time for a new water heater.

If you have gas consider a tankless. They are really nice and don't take up a lot of room. Considerably more money but with state and federal tax credits and the certain cost of higher energy it is well worth the money.

While it could be a bad connection, 10 years is pretty good for a water heater anymore. There's a sacrificial anode rod in the tank that gets eaten up, and once it is gone the metal parts in the tank are next. So, it could be corrosion in the unit as well.

Tankless units are nice, but require some major re-fitting of gas or electric, and the gas ones require some new venting as well. They're worthwhile if you have a wife and four daughters that like to take long showers and do lots of laundry. But, I'm hesitant to push them to people due to the complexity of installation, repair, and maintenance...Not to mention the price of the unit and its installation. Not a DIYer job. If you can get by with a 40 or 50 gallon tank unit, and the existing setup works fine for you, I'd go back with what you've got. If you decide that tankless is for you, do your research first, then bend over and grab your ankles!

If the tank is still working well, you might go ahead and check the T&P valve on the top if the T&P is on the top of the tank. You mentioned you changed it. Did you test it after installation? If so, that will often cause them to leak and never stop leaking. They're about $6. Might be worth trying another one. Also, did you use lots of pipe dope or several wraps of teflon tape when you threaded it in?

To their credit, tankless units only heat on demand, so you'd see your gas bill go down a little. A tank-type water heater is very inefficient.

Isn't there a limitation on what tankless units can handle based on the size of the house, # of bathrooms, etc.?

I live in a 3 story house, 5 beds, 4.5 baths, with total sq. footage over 5000.

Also, gas tankless may better handle such a size compared to electric tankless.

I have never installed an electric tankless but I have not heard good things about them.

Gas tankless have worked well and I have one in my house. They do have limitations on the amount of water they can heat. Depending on the delta T of the water output can be slow if demand is high.

I have put in tandem water heaters for high demand homes, one was a foster home with 8 kids and they were always running out of hot water. It is still cheaper than a tanked water heater and the hot water is pretty much endless.

I did a triple tankless once and one heater was dedicated to hydronic heating.

There is a small change in life style as there can't be several tubs filling at one time but several showers can happen at once. The good part is that there can be a tub of water, then several showers and the dishes and clothes washer and still have hot water.

With a tanked water heater there is a significant time delay between each major hot water event.

Yes, tankless hot water is a major change in some of the infrastructure for heating water. I had to move mine about 40 feet and it takes a little longer to get hot water. But once it gets there it doens't stop.

The cool part. When you don't need hot water it is not heating any.

These are fairly new, but what's the maintenance required and expected life?

I put in Rinnai's and they have a 10 year guarantee which is longer than tanked water heaters.

There is really no maintenance for these except for the release valve which is the same as a tanked water heater. Since there is no tank of hot water these valves are less likely to be needed but code says you have to have them anyhow. I can't imagine that a tankless water heater would explode like a tanked water heater. http://www.youtube.com/watch?v=pu3FwgIHsQA

I have been putting these in for over 5 years and have never had one go bad. Mine has been in for 5 years and no problems.

My energy savings have been in the 10% range.

A lot of people think you can add a tankless unit (or units) willy-nilly without re-fitting some major systems. For instance, the average home's gasline will have to be upsized from the meter in since the gas demand of one tankless unit is about three times that of a tank water heater.

I just looked at a house that had three gas tankless units.

A lot of people hear that these units offer "instant" hot water. Not necessarily. They heat it instantly, but you still have a lot of cold water in the pipes when you open the faucet, so you still have to wait for hot water. I see a lot of very small electric water heaters installed near the fixture to provide instant hot water while the tankess unit's hot water gets through the lines.

I have installed recirculating pumps in homes with long runs. Then there is the code that requires a 3/4 line versus a 1/2 in line out of the tank. Since a 3/4 line will carry more than 2x the volume of a 1/2 in line there is a lot more water than needs to be heated before it gets to the faucet.

On top of that there is the cold sandwich. This occurs when the water is shut off for a second or so and then is turned on. It takes 1.5 seconds of flow before a tankless will turn on. This allows 1.5 seconds of unheated water to go into the lines.

Also some low flow show heads will not allow enough water to move through the tank to fire it up. This was addressed quickly and it now goes on for about 1/10 of a gallon per minute. The reason for the flow limits is that if there is a leaking hot water faucet it would keep the tankless running all the time and would increase energy bills considerably.

Overall these are minor compared to the savings in energy and space and the convenience of constant hot water.

Let's say you have to install 2 or 3 of these tankless heaters in series. Does that mean you can vent all 3 through the previous flue used for the old hot water tank, or must you change the size of the flue also?

Technically they can't vent in the same hole as the old water heater unless it is piped to the top of the chimney and vented into the air. Because they use a lot of energy in a short time there are a lot of gases that won't vent the way the old tanked water heater did.

Each water heater has to have their own vent but can be combined in a larger pipe if necessary.

I install both indoor and outdoor models. Outdoor models are a lot cheaper to install since they don't have to have the venting kit which can cost up to $400 more depending on how much pipe is needed.

The cool thing about the Rinnai is that you can connect them in series and have one working and will tell the other to kick in if it can't keep up. Kind of like a tag team.