Tankless vs Traditional Tank Water Heater


There are a lot of things that need to be clarified when it comes to what kind of water heater is best for you. Whether it is the tankless type or regular tank water heaters, they can cost a lot of money. That's why its necessary to know how to decide which is best, according to your specific needs. 

In this manner, you need to have a rough idea of how they operate, the pros and cons, unit cost, and how much you will have to spend to install the one you buy, as well as how it will affect your energy bills. As a matter of fact, water heating is the second largest expense in your home, representing up to 18% of your utility bills.

In this article, we have put together all of the most important details about these two types of water heaters to help you decide which one is best for you.

Tank Water Heaters

The most common type of water heater in homes is the traditional tank. They are made up of a large insulated tank that holds and heats the water. Typically, the tank is powered by electricity, natural gas, or propane. A thermostat controls the water temperature, which is heated by an electric heating element or a gas burner. 

A very important factor to consider about water heaters is the amount of energy or BTUs they require to heat water. Tank water heaters rate up to 30,000 - 50,000 BTUs per hour, depending on efficiency ratings, and their capacity typically goes around 40 to 55 gallons.

How Do Tank Water Heaters Work?

Electric water heaters heat the water with one or more electric elements, whereas gas and propane water heaters heat the water with a gas-fired burner. 

The water in the tank is heated to a specific temperature, usually between 110 and 140 degrees Fahrenheit, and then stored in the tank until needed. A pipe system then distributes hot water to various fixtures such as sinks, showers, and bathtubs.

The temperature and pressure of the hot water in the tank are controlled by a thermostat and a temperature and pressure relief valve. As hot water is consumed, cold water enters the tank and is heated to replace it. This process is repeated until the hot water in the tank runs out, at which point the water heater will start heating more water to replace it.

Tank water heaters have an 8-12 year lifespan. However, repairing or replacing the tank in case of a leak or damage can be costly. Tank water heaters' energy efficiency can be improved by insulating the tank and pipe.

Tankless Water Heaters

Tankless water heaters are one of the significant innovations when it comes to water heaters. They are also known as demand-type or instantaneous water heaters. They heat water as it flows through the device rather than storing hot water in a tank. That means that (technically) they don't run out of hot water. Since tankless water heaters solve two of the main issues people usually have if they want to purchase a traditional tank water heater (not enough space and limited hot water), they are arguably the best option for you. 

However, they are a few things you need to know about them before you buy one. Let's start with how they operate.

How Do Tankless Water Heaters Work

Tankless water heaters, also known as on-demand or instantaneous water heaters, heat water as it flows through the device rather than storing hot water in a tank. They have a heating element, typically powered by gas or electricity, that heats the water as it passes through the unit. When a hot water tap is turned on, cold water is drawn into the unit and is passed over the heating element. The water is heated to the desired temperature and is then sent to the tap.

There are a couple of things to consider here. The ground temperature of the water and the desired temperature are essential in how quickly the hot water will be delivered. They will most certainly slow down the water flow so that the heat exchanger can heat the water on demand, and the colder the ground temperature of the water is, the longer this process will take. That means that they must not be considered instantaneous water heaters.

However, heating water on demand is still much more efficient than storing hot water that isn't being used, and you will, in fact, get unlimited hot water once you get it. This is very convenient for long and comfortable showers or baths.

Types Of Tankless Water Heaters

The main types of tankless water heaters you might have heard of are electric, which are usually cheaper and may be a good option for those who don't have gas services in their neighborhood, and the ones that use natural gas or propane as a source of energy. However, they can still be divided into condensing and non-condensing models.

Condensing tankless water heaters are designed to capture and use heat normally lost in non-condensing models' flue gases. They have a secondary heat exchanger that captures this heat and uses it to warm up the incoming cold water, increasing the unit's overall efficiency. This technology increases their efficiency (90%) over non-condensing models (80%). 

Non-condensing tankless water heaters, on the other hand, do not have this secondary heat exchanger and, therefore, cannot capture and utilize the heat from the flue gases. As a result, they are less efficient than condensing models.

In terms of installation, condensing tankless water heaters typically require additional venting and piping, as they need to expel the flue gases outside. Non-condensing models, on the other hand, can be vented through the same type of pipes used by traditional tank-style water heaters. Plus, the upfront cost of condensing models might be a bit higher than non-condensing models, but they operate at a lower BTU rate. Therefore, condensing models will eventually pay you the extra price you paid for them.

Tankless vs Tank Water Heater Energy Savings

According to the US Department of Energy, tankless water heaters are 8-34% more energy efficient than tank water heaters. In this manner, you can save as little as $100 a year with a tankless unit depending on how much hot water your home uses daily. 

One of the main ways tankless water heaters save energy is by eliminating standby heat loss. As we mentioned, tank water heaters store a large tank of hot water and constantly heat it to maintain the desired temperature. That means that energy is being used even when hot water is not being used, resulting in standby heat loss. In contrast, tankless water heaters only heat water as it flows through the unit, providing hot water only when needed. That eliminates standby heat loss, resulting in energy savings.

Tankless Water Heaters vs Traditional Tank Water Heaters

Now, let's compare the advantages and disadvantages of tankless and traditional tank water heaters.

Pros of Tankless Water Heaters

  • More energy-efficient: Tankless water heaters only heat water when needed, avoiding the standby heat loss common with traditional tank water heaters.
  • Longer lifespan: Tankless water heaters have a longer lifespan than conventional tank water heaters, meaning they will need to be replaced less often as long as they get the proper maintenance. According to the US department of energy, they can last up to 20 years or more.
  • Unlimited hot water: Tankless water heaters provide an endless supply of hot water, as opposed to traditional tank water heaters, which can run out of hot water if the tank is not large enough.
  • Space-saving: Tankless water heaters take up less space than traditional tank water heaters, making them an excellent choice for homes with limited space. Their measurements go from 10-30 inches high to 7-20 inches wide, depending on the unit type (electric or gas-fired).
  • Lower water heating costs: In the long run, tankless water heaters can save homeowners money on water heating costs. They can help you save around $100 a year or $44 if you have an electric unit.

Cons of Tankless Water Heaters:

  • Higher upfront price: Tankless water heaters are generally more expensive to buy and install than traditional tank water heaters. The price you may have to pay to install them can be significantly high if you switch from a conventional tank water heater. Something that can make things complex to install does not have the correct gas line. Tankless water heaters use four times as many BTUs, so you have to replace your main, which can significantly increase the price.
  • Limited flow rate: Tankless water heaters have a fixed flow rate, which means they may need help to supply hot water to multiple fixtures at once in larger households. So, despite providing unlimited hot water, you may have to acquire two depending on your hot water demand. 
  • Special venting: Condensing tankless water heaters typically need additional venting and piping, which can increase the cost and complexity of the installation even more.
  • Maintenance: Tankless water heaters are way more sensitive than tank water heaters, which means that not having the proper maintenance and poor quality water can severely reduce their life expectancy.

Pros of Tank Water Heaters:

  • Lower initial cost: Generally, traditional tank water heaters are less expensive to buy and install than tankless water heaters. If you already have a tank water heater, you can install a new one replacing the old one for a fraction of the price.
  • No flow rate limitations: This means they can supply hot water to multiple fixtures at the same time. But it's important to remember that they don't count on unlimited hot water.
  • Maintenance: Tank water heaters are way less sensitive than tankless water heaters. Thus, you won't have to worry about maintenance so often.

Cons of Tank Water Heaters:

  • Energy efficiency: As we already mentioned, tankless water heaters are less efficient because they constantly heat water. As a result, your energy bills will be higher.
  • Lifespan: They don't last as long as tankless water heaters, so they will have to be replaced more often.
  • Limited hot water: The amount of hot water they can provide depends on the tank's capacity, so they will run out of hot water if the demand is too high. That's why you need to ensure the unit you buy is large enough to cover the household demands.
  • Size: They are significantly larger, so they might not be ideal for homes with limited space.


Both tank and tankless water heaters have several pros and cons that you need to consider before purchasing a new one. All in all, tankless units are the most modern and efficient. In addition, they have some features that homeowners typically look for, such as unlimited hot water, longer life expectancy, and practicality. However, there might be better options for people with a limited budget, as buying and installing a new one can be more expensive, especially if switching from a tank unit to a tankless water heater. Therefore, it's highly recommended that you consult your plumber before you invest in a new water heater. 

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