Tankless Water Heaters vs. Traditional Storage Water Heaters

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Published January 16, 2015

Comparing Tankless to Conventional Storage Water Heaters

Tankless water heaters are a popular appliance in advertisements over recent years. Usually highlighted by  the tankless manufacturers and water heater installers are benefits including reduced operating expense and indefinite hot water supply. However, there is much more to know about the differences between these systems. In this article, I intend to highlight the most important differences.

Traditional storage water heaters generally do not require electricity to operate. Tankless water heaters are different in this regard; they do require electricity. Hence, it is important to realize that with tankless, when your power goes out, unless you have a generator, you will not have any hot water. With a typical gas storage water heater, you will have hot water through the entire outage.

With respect to energy efficiency, tankless systems are more energy efficient versus storage water heaters for two reasons: first, tankless water heaters do not heat water when there is no demand for it, so no energy is being used to keep water hot in a large storage tank during non-usage times. Second, tankless offers more efficient heat transfer, utilizing more of the heat produced to actually heat the water. On a per gallon of hot water basis, tankless is the clear winner. However, it is important to note, when switching to a tankless system, often homeowners intend to use more hot water, which may mean the overall operating expense does not decrease at all. It may in fact increase. If your hot water usage does not change, tankless will reduce your operating expense between 20% and 35%.

It is true tankless water heaters do not run out of hot water; extended showers and filling the 100 gallon jacuzzi bathtub won’t be a problem. However, you are restricted in how much hot water you can utilize at any one time measured in gallons of hot water per minute. In this area of the country, usually the most efficient and largest tankless water heaters can provide 6 gallons of hot water per minute, which equates to two standard shower heads and a faucet running at the same time. With storage water heaters, you are not restricted in how many gallons of hot water per minute you can use, but the more you use, the quicker you will end up with no hot water.

The upfront cost of a tankless system is significantly higher than a storage water heater. If you’re switching from a storage water heater to a tankless, you’ll likely need the gas piping to the unit upgraded to a larger size to accommodate the increased demand for natural gas (you may also need the gas meter upgraded). You should expect to pay $2,000 to $3,500 more for a tankless water heater with gas piping revisions when compared to a standard storage water heater.

Finally, tankless water heaters require maintenance and will likely need repairs over their life, whereas storage water heaters require little to no maintenance or repairs. Storage water heaters are typically “set’m and forget’m” appliances.

There is no right or wrong when purchasing a water heater, the choice is a matter of your preference. It is important to understand the differences between the systems so you end up happy with your choice. Hopefully this article has helped to educate you.


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