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Tank vs. Tankless: Hot Water Heater Showdown

Home Sweet Home

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Purchasing new appliances for your home is a big investment, so make sure that you have all the information before committing. If you’re looking to replace your hot water heater soon, you may have run across models that are “tankless” or “instantaneous/on-demand” alongside the conventional “storage”/”tank” water heaters. Here’s what you need to know about these two water heater options before you make any decisions.

How They Work: Tank and Tankless

Understanding how each type of water heater works is critical to making an informed decision for your next purchase.


Storage/tank water heaters work by pulling cold water through a pipe then heating it up before storing that hot water in a big tank. When a faucet or appliance in the house calls for hot water, the tank opens up an outgoing pipe and lets the already-heated water flow out. The storage water heater will always replenish the supply of hot water in the tank, but you have to wait for more water to become available if you use it all at once.


A tankless/on-demand water heater, on the other hand, does not have hot water ready and available when needed but instead heats the water at the moment it’s being used. When a hot water faucet is turned on in the home, the tankless water heater pulls cold water into the unit, heats it, then immediately dispenses it out through an exit pipe. When the hot water faucet is turned off in the home, the tankless water heater stops its work.

Energy Efficiency

One big drawback to traditional storage water heaters is the passive loss of energy. Since a large quantity of water is being heated and then stored for an indefinite period of time, the water will lose some of its heat as time goes on – the energy lost from this cooling is inefficient, both in terms of money and resource use. On the other hand, tankless water heaters only heat water as it’s needed, so they’re more energy and resource-efficient. Because of this efficiency, many local governments and/or utility companies offer incentives for tankless water heater purchases. The U.S. Department of Energy estimates that “for homes that use 41 gallons or less of hot water daily, demand water heaters can be 24%–34% more energy-efficient than conventional storage tank water heaters.” However, gas-fired tankless water heaters have a pilot light that’s continuously ignited, so some energy is being used even when the unit isn’t actively heating water. Others can have an intermittent ignition device that only turns on when needed, so your energy efficiency can be affected by the particular model and energy source that you have.

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Household Usage

Deciding whether to get a tankless or storage option for your water heater depends somewhat on the amount of hot water your household uses daily. Because tankless options heat the water on demand, a household that uses a large volume of hot water at one time could easily run low. If you’re used to running the washing machine while someone hops in the shower, then a single tankless water heater probably won’t keep up with your needs. Since tank/storage options come in various sizes, on the other hand, you can choose a large capacity model that will have enough hot water ready and waiting for your family’s needs at any given time.

The U.S. Department of Energy estimates that tankless water heaters generally heat about 2-5 gallons per minute (depending on energy source and temperature of incoming cold water). There is a useful guide here to determine the size of either model that your home would need.

Upfront vs. Long-Term Costs

A tankless water heater costs more upfront than a storage unit, so if your current funds are limited, a traditional model might be the way to go. Similarly, if you determine that you’d need multiple tankless units to meet your household demand, the difference in cost will grow (even considering the need to buy a large capacity storage model). However, the energy savings from a tankless version may be noticeable depending on your family’s usage and energy costs in the area. Both tank and tankless options can use natural gas or electricity as their energy source, so depending on the price and availability of each in your area, one may be more efficient than the other for your needs.

Even though the upfront cost of a tankless water heater is more, the long-term costs may not be. Typically, a standard storage unit needs to be replaced every 10-15 years, but tankless units often make it to 20 years without any issues. Replacing parts on a tankless unit is also easier than on storage models, so regular maintenance is simpler with a tankless version.

Before you replace your water heater, ensure that you assess your household water usage, available energy sources, and current versus long-term budgetary needs. Either way, getting quotes from several professionals in your area will help your family decide which model is right for you!

Home Sweet Home is presented by Wheeling Distribution Center. Wheeling Distribution Center is a home improvement store that believes in offering quality home improvement products that businesses and homeowners can count on. It’s this commitment to excellence that has kept us in business since 1980

Copyright 2021 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.


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