Tankless vs. Tank Hot Water Heater: Which Is Best for Your Home?

April 26, 2023

Your water heater plays an essential role in the everyday comfort of your home environment. You’ve come to depend on your water heater so much, you may not even think about everything you use it for every day: showering, doing dishes and laundry, or simply heating water for a pot of tea.

And when it comes to the type of water heater your home has, small differences can have a big impact. So what is the difference between a tankless vs. a tank hot water heater? And which one is right for your house?

Check out our guide to get the facts on tankless water heaters and traditional tank water heaters, along with a list of pros and cons for each type.

What Is a Tankless Water Heater?

A tankless water heater is a new type of water heater technology that eliminates the large tank that stores hot water until it’s ready for use. Instead, water is heated on-demand as it passes through a small chamber and runs into the house’s plumbing.

Here’s how it works: When you turn on a faucet or appliance that requires hot water, the cold water passes through a pipe and into the tankless water heater unit. Here, it is quickly heated by either a gas burner or electric coil. Once it is adequately hot, it flows into the house for use.

Tankless water heaters provide about 2–5 gallons of hot water every minute and are considered an energy-efficient solution.

What Is a Tank Water Heater?

Tank water heaters or storage tank water heaters are an older form of technology that is more commonly found in homes across America today. These water heaters include a 30–50 gallon tank that heats water regularly and then stores it for use whenever it is needed in the home.

Most tank water heaters are powered by natural gas, propane, fuel oil, or electricity. They work by sending the hot water at the top of the tank into the house’s plumbing wherever it’s needed, then refilling the bottom of the tank with cold water for heating.

Some storage tank water heaters are insulated (especially during the winter months) to combat standby heat losses and reduce the overall cost of operation.

Differences Between a Tankless Water Heater vs. Tank Water Heater

There are a few key differences between a traditional hot water heater vs. tankless water heater. Here’s how to compare the two options.

1. Size

Of course, the most obvious difference is that tankless water heaters operate without a large tank. They are about the size of a small carry-on suitcase, whereas tank water heaters are typically up to five feet tall.

2. Heating Methods

Another major difference between tankless water heaters vs. tank water heaters is the method of heating the water. Tank water heaters preemptively heat water and store it on-hand, regardless of whether a household needs the hot water. In contrast, a tankless water heater heats water only when it is needed.

3. Energy Efficiency

Because tankless water heaters only heat water as needed, they are considered far more efficient than tank water heaters. Depending on the type of water heater and size, tankless water heaters can be 8–14% more efficient than tank water heaters, offering energy savings of up to 27–50%.

4. Cost

Tankless water heaters often cost 2-3 times the cost of tanked water heaters and have higher installation costs. The cost difference can be recouped in energy savings over the life of the system. A longer lifespan also means an additional cost upfront cost can be worth the investment.

Benefits of a Tankless Water Heater

Tankless water heaters are increasing in popularity for many reasons. Here are a few benefits of owning a tankless water heater over a standard tank water heater:

  • More energy-efficient: If you’re seeking the most eco-friendly option, a tankless water heater is the best choice.

  • Lower operating costs: Tankless water heaters save you money on utility bills by only heating water when you need it.

  • Space-saving: Tankless water heaters are far more compact than tank water heaters, meaning you’ll free up space in your garage or basement.

  • Last longer: You won’t have to worry about your tankless water heater giving out anytime soon—most last 20 years or more.

Cons of a Tankless Water Heater

Though tankless water heaters have many benefits, there are a few drawbacks, too. Here’s what you should know before investing in one:

  • Higher upfront cost: Operation costs may be lower overall, but tankless water heaters cost more upfront than tank water heaters. Installation of a tankless water heater typically costs more, too.

  • Heating capacity limits: If you’re using a lot of hot water all at once, a tankless water heater may have trouble keeping up with the demand. Large families may even need more than one tankless water heater. 

Benefits of a Tank Water Heater

Tank water heaters still hold their appeal for many homeowners. Check out these benefits of the traditional option:

  • More affordable: Tank water heaters are cheaper than tankless water heaters, an important consideration for many buyers.

  • Straightforward maintenance: Tank water heaters are simpler machines, meaning maintenance is straightforward (and often more affordable) than maintaining a tankless water heater.

Cons of a Tank Water Heater

If tank water heaters are cheaper, wouldn’t everyone want one? Here are several reasons buyers opt for a tankless water heater instead:

  • Less efficient: Tank water heaters heat water even when you don’t need it, making them less efficient than tankless water heaters.

  • Take up space: Because they are much larger than tankless water heaters, tank water heaters can encroach upon much-needed space in the home.

  • Shorter lifespan: Most tank water heaters last 10–15 years, while tankless water heaters last 20 years or more.

  • Limited hot water capacity: Tank water heaters can only store so much water in the tank. After using that hot water, your showers will be cold!

Should You Choose a Tankless Water Heater or Tank Water Heater?

We’ve discussed tankless water heaters vs. tank water heaters at length. So which one is right for you?

If you’re concerned about energy efficiency, saving space, or reducing monthly bills, a tankless water heater is your best option. If you’d rather save money upfront, a tank water heater will serve you well.

For additional information on plumbing services, call our team at 844-216-9300 and speak with a technician today.

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Last Updated: May 18, 2023