Tankless vs. Tanks — The Water Heater Grudge Match


Published January 16, 2015

Comparing Tankless to Conventional Storage Water Heaters

Over recent years, tankless water heaters have emerged as a popular alternative to the traditional tank models. You may have seen advertisements lauding the benefits of tankless, such as reduced operating expense and indefinite hot water supply. While these benefits are desirable for some homeowners, there are some important differences between tankless and tanks to be aware of before you make the switch. Upon hearing these differences, some people actually prefer tanks to tankless. In this article, I intend to highlight the most important points of comparison to better help you determine your personal water heating preference.

First, tankless water heaters require electricity (they do not use gas alone) to operate an exhaust fan, the ignition, and the electrical circuitry, while most gas tank water heaters do not require any electricity to operate. 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 (they are as much as 25% to 35% more efficient). However, it is important to note, when switching to a tankless system, often homeowners intend to use more hot water than they were using with their tank, which may mean the overall operating expense does not decrease at all. It may in fact increase. Nevertheless, if your hot water usage does not change, tankless will reduce your operating expense.

You have probably heard 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. Here in the north, the water entering a water heater is pretty cold, so it takes a significant amount of heat simply to bring the water up to the desired temperature. So for those of us in the Northwest, usually the most efficient and largest tankless water heaters can provide 5 – 6 gallons of hot water per minute, which equates to two standard shower heads 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–you could turn every faucet and shower in the house on at the same time–but the more you use per minute, 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 tank to a tankless, there’s a good possibility you’ll 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 $2,500 to $4,000 more for a tankless water heater with gas piping revisions when compared to a standard storage water heater.

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. In which case, the lifetime expense of a tankless water heater can be much higher than a tank–the manufacturers recommend yearly maintenance on tankless systems, and a repair or two over the life of the unit isn’t uncommon.

If you ever need just a small amount of hot water from a faucet, tankless can have a hard time accommodating this. There is a minimum amount of waterflow required through a tankless before the burners will kick on to begin heating the water. With a tank, you can have as little hot water from a faucet as you like.

These are the key differences between tank and tankless water heaters. There is no right or wrong when making your choice, preference is the name of the game. But, it is important to understand these differences so you end up happy with your decision. Hopefully this article has helped with finding the option best suited for you.

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