Key Takeaways
- Tankless water heaters provide on-demand hot water, eliminating the need for a storage tank and saving space in your home. Their smaller footprint means they can fit anywhere, freeing up even more space in your home for other uses.
- Because these systems heat water only on-demand, they are some of the most energy-efficient water heaters available. By reducing standby heat loss, they can save you utility dollars in the long run.
- Tankless water heaters outlast traditional tank models. They provide excellent durability, and they end up saving you money in the long run.
- Although they have many positive aspects, tankless water heaters have significantly higher initial costs associated with purchasing the unit and installing it. Budgeting for these expenses in advance will be key when making this upgrade.
- Flow rate limitations could impede simultaneous use across large households. Determine your household’s maximum water usage at one time. This will allow you to determine if just one unit will do the job or if you need several units.
- We strongly recommend consulting a professional to ensure compatibility with your home’s plumbing and energy systems. With expert advice, you can make the right choice for your household and ensure your installation will be maximized.
Deciding on a water heating system is an important decision for any household. Tankless water heaters provide a constant supply of hot water, avoiding the need for large storage tanks. This new and innovative feature has generated a buzz!
These systems are generally small, energy-efficient, and capable of accommodating different levels of water use. Whether a tankless water heater is right for your household is a decision based on several important factors.
Think about your household size, your hot water needs, and the installation requirements. Find out how these heaters work and how their advantages stack up against more conventional units.
This information will enable you to make the right decision for your household. Use this guide to learn about the most important factors when selecting a tankless water heater for your home.
Read on to see if it’s the right choice for your household!
What Is A Tankless Water Heater?
A tankless water heater, or on-demand water heater, is a small, wall-mounted unit that heats water only when you need it. Unlike traditional tank water heaters with storage tanks that keep water heated constantly, a tankless heater heats water as it flows through the unit. This means you’re getting hot water on demand, rather than storing a tank of heated water.
The main difference between tankless models and conventional storage tank water heaters lies in their operation. While conventional water heaters maintain an entire tank of hot water 24/7, leading to standby heat losses, a tankless system effectively eliminates this issue. It uses high-powered burners or electric coils to heat water instantly as it flows through, providing efficiency and energy bill savings.
This process delivers on-demand hot water without the concern of running out, which is a frequent problem with traditional storage water heaters. On-demand systems are also space savers; they are smaller and lighter, removing the need for a large storage tank. You can conveniently install them in small areas such as closets or under sinks.
Additionally, these units are flexible enough to work inside or outside, depending on your configuration, making them a popular choice among conscious homeowners looking to optimize their energy costs.
How It Works
Water passes through the unit only when you turn on a hot water tap. A flow sensor recognizes this demand and turns on either a gas burner or an electric element, heating the water on demand. The cold water immediately fills the line and is quickly heated as it travels through.
Unlike tank heaters that keep water warm all the time, tankless units heat on-demand. This translates to no standby energy loss and an endless supply of hot water. If you’ve ever experienced the aggravation of a tank heater depleting during a lengthy shower, you’ll love this benefit. It can make a huge difference in your daily shower routine!
Types Of Tankless Water Heaters
There are two main types of water heaters: gas tankless water heaters and electric models. Natural gas units heat water faster and offer higher flow rates, making them ideal for larger households. Within the gas category, you can find both non-condensing and condensing options. While non-condensing models vent exhaust gases quickly, condensing types are more energy-efficient, leading to potential energy savings over time, despite their higher initial cost.
Electric tankless water heaters are smaller and easier to install, typically serving single fixtures or point-of-use applications. These units are particularly suitable for dedicated points-of-use, like a kitchen sink or a powder room. Each type of water heater has its own set of advantages and disadvantages, catering to different needs.
They sure are efficient. Heavy use means gas units can be more expensive to install but pay off on efficiency. Electric ones are less expensive up front but may have a harder time keeping up with high water demands in bigger homes.
Advantages Of Tankless Water Heaters
Energy Efficiency Benefits
Unlike traditional storage water heaters that store heated water, tankless water heaters only heat water when you need it. This innovative design effectively eliminates standby heat losses, a significant issue with conventional storage tanks. Typical storage water heaters waste energy by keeping 40–50 gallons of water hot at all times, even when not in use.
Because tankless models heat water on-demand, they waste much less energy, leading to potential energy savings. This efficiency usually translates to significant savings on monthly utility bills. Since they consume less energy, you could save hundreds of dollars each year, depending on your household’s hot water usage patterns.
Tankless systems are also the environmentally responsible choice. By utilizing less energy, they contribute to lower carbon emissions overall. A family that switches to a gas tankless water heater can save an incredible 40,000 gallons of water each year.
In reality, they might be filling millions of bottles every year! This sky-high efficiency rating makes them both wallet-friendly and planet-friendly.
Space-Saving Design
Perhaps one of the most touted advantages of tankless water heaters is their space-saving design. These units are compact and attractive. This makes it easy to wall-mount them, or install them in compact areas such as closets or utility rooms.
Their compact footprint frees up valuable square footage, which is a major benefit in homes with constrained space. Whether nestled under a sink or installed in a corner, their flexibility provides a convenient answer for today’s homes.
Long-Term Cost Savings
While the upfront cost may appear more, tankless water heaters offer significant savings in the long run. Moreover, their energy-efficient operation means significantly lower energy bills every month.
Additionally, their average lifespan of around 20 years is almost twice that of conventional heaters, so replacements are less frequent. Though maintenance is low, the long-term financial savings greatly exceed the installation costs.
Continuous Hot Water Supply
Tankless models make sure you’re never out of hot water. Unlike traditional tanks that run out after use, these systems heat water as it passes through the unit.
For large, active households with high hot water demands, this feature saves everyone the headache of waiting for hot water to reheat. Whether you are having a party or simply running two or three showers at once, you will never run out of hot water again.
Disadvantages Of Tankless Water Heaters
High Initial Installation Costs
Tankless water heaters have a prohibitive upfront cost. Buying and installing one can cost more than $3,000, versus the $900 average for a traditional tank model. A number of elements lead to this cost, such as installation difficulty and the requirement for professional knowledge.
Tankless systems operate differently than conventional models. They often require significant upgrades to your gas or electrical systems, which can substantially raise the total cost. So budgeting for the unit itself and the installation is key to not being caught off guard.
Limited Water Flow Capacity
A tankless water heater’s maximum flow rate, measured in gallons per minute (GPM), determines how much hot water the unit can deliver on demand. In a household where you are taking multiple showers or using multiple appliances at the same time, one unit may not be enough to keep up.
Larger families will likely require two units or a high-capacity model to keep up with demand. Working with an experienced professional can help you evaluate your home’s demand and decide the best setup for your needs.
Compatibility With Existing Systems
Going to a tankless installation usually requires retrofitting your home’s plumbing, gas and/or electrical systems to work with the new equipment. If you have a particular setup, it might require a lot of effort, which makes installation a bit more difficult and expensive.
Avoiding these unexpected complications is key to avoid unpleasant surprises.
Maintenance Requirements
Tankless units need more regular maintenance, such as descaling and flushing, particularly in regions with hard water. That maintenance keeps things running smoothly and efficiency but requires $45 to $200 per year in professional maintenance.
Neglecting maintenance can lead to decreased efficiency and shorten its lifespan, so planning for these costs is essential.
Factors To Consider For Your Household
1. Household Size And Water Usage
One of the biggest factors in determining whether or not a tankless water heater is right for you is household size. The more people that are occupying your home, the greater the demand for hot water will be. A family household of five with two bathrooms would need a unit that could accommodate simultaneous showers.
It should take care of things like laundry and dishwashing conveniently, too. If you are outfitting a larger household with ten members, you’ll have to install several units. This will enable you to better manage usage during peak periods.
It’s equally important to think about how and when your household uses hot water. If the whole neighborhood showers in the morning, the system has to be able to accommodate that peak demand. In the same way, knowing the flow rate of appliances such as dishwashers and washing machines goes a long way to ensuring the correct heater size is matched.
Tankless units usually provide hot water at a rate of about 2-5 gallons per minute. To determine which model is best for your household, consider your hot water use habits.
2. Budget And Installation Costs
Budget will have a huge impact on what you decide. One major tankless disadvantage is their higher upfront costs than conventional models. That’s not just the purchase price, but the cost of installing them, too.
For instance, with professional installation it may be required to upgrade your home’s gas line or electrical system, adding to the expense. Many financing options are available to those who want to make the investment over time.
Consider maintenance costs. When it comes to homeownership, maintenance should be worked into your budget. Having a professional service the unit annually will help the unit run at peak efficiency.
At first glance, these costs may seem exorbitant. These usually get offset in the long run as you start reaping the benefits of energy savings and reduced utility bills.
3. Energy Efficiency Goals
Tankless water heaters are known for their energy efficiency. These systems are certified to be as much as 34% more energy efficient than standard tank models. Combined, that means you’ll see significant savings on your monthly energy bills.
Additionally, tankless units provide an environmentally friendly option for households seeking to reduce their carbon impact. They also heat water only when it’s needed, removing energy waste from standby heating.
In the long run, the lower energy consumption means long-term savings, making these systems a popular choice among environmentally-minded homeowners. Set specific energy objectives, like saving money on your utility bill every month or decreasing your carbon footprint.
These goals will help lead you towards a funding model that meets all of your sustainability and fiscal concerns.
4. Space Availability For Installation
Tankless water heaters take up less room, so they’re the best choice for houses with little space to spare. These systems are very easy to install. You can install them in more unused spaces like closets, basements, or mounting them on walls.
This flexibility provides you the opportunity to free up costly space for more productive uses. To avoid the hassle of an ill-fitting unit, measure the area you’ll install the unit in before buying one.
Keep in mind that proper ventilation is very important. You can find yourself needing to replace old pipes, impacting your ability to place your unit.
5. Climate And Water Temperature Needs
Consider your local climate. If your tankless water heater doesn’t work efficiently, it’s going to be a waste of money. In colder regions, groundwater temperatures are lower, which means the unit works harder to heat water to the desired temperature.
In situations like these, you’ll require a robust model to maintain a steady flow rate. Warmer climates make it a whole lot less exhausting on the system. This allows for more compact units and less energy use.
Choosing a heater capacity that aligns with your region’s environmental conditions and weather patterns guarantees the heater operates efficiently in every season.
Comparing Tankless And Traditional Water Heaters
Feature | Tankless Water Heaters | Traditional Water Heaters |
---|---|---|
Energy Efficiency | 24–34% more efficient for ≤41 gallons/day usage | Less energy-efficient; continuous reheating |
Space Requirements | Compact, wall-mounted design | Bulky, requires dedicated floor space |
Lifespan | 20–30 years | 10–15 years |
Hot Water Supply | Instant, 2–3 gallons/minute | Limited to tank capacity |
Safety | Safer design, fewer risks of leaks | Higher risk of leaks and tank failure |
Costs | Higher upfront and installation costs ($1,000–$3,000) | Lower initial costs, higher long-term utility bills |
Performance Differences
Tankless water heaters heat water immediately, so you’ll always have hot water when you need it. These are great systems for smaller households that use under 41 gallons of water per day.
They may struggle when tasked with meeting many high-demand tasks simultaneously, such as running multiple showers and appliances. Traditional heaters heat and store water in advance.
When demand is highest, this water can be depleted, creating a wait time while the tank is refilled and reheated. For homes with predictable usage patterns, tankless systems deliver consistent performance, while larger households may prefer the steady availability of a storage tank.

Cost Comparisons
- Upfront: $1,000–$3,000 for purchase and installation. Maintenance: Regular descaling for mineral buildup. Long-Term Savings: Energy-efficient models save $44/year (electric).
- Lower Initial Price: Typically cheaper to buy and install.
- Higher Energy Bills: Continuous reheating adds to costs.
- Frequent Replacements: Lifespan is only 10–15 years.
Longevity And Durability
Tankless systems last about 20–30 years, nearly doubling the lifespan of traditional tanks. Their design minimizes wear, lowering safety risks such as leaks.
The quality and brand do make a difference—lower-priced units will often sacrifice build quality. Traditional tanks, having a life span that is typically half that of tankless water heaters, require more frequent replacements which raises long-term costs.
How To Decide If It’s Right For You
Evaluate Your Household Needs
First, consider your household’s unique hot water needs. Ask yourself key questions like: How many people live in your home? How frequently are you running several appliances or faucets at the same time that require hot water? How much water does your home use at peak flow rates?
These specifics are important, since tankless water heaters deliver hot water on demand, but how much you need at a time will affect the size you want. If you have a family of five that all shower, wash dishes and do laundry simultaneously, you may require a larger unit. This will allow all users to enjoy their activities safely and without disruption.
Determining peak usage hours is imperative. If mornings are your busiest period, choose a system that can handle the combined flow rate of showers, sinks, and appliances. Don’t forget – your geographic location is a big part of this equation as well!
Homes in very cold climates will often require larger units to adequately heat incoming water on demand. Tackling these questions helps you to figure out if you’re making an achievable decision. This step is especially critical when you factor in the initial investment, which can be anywhere from $1,300 to $3,900 before installation.
Consult A Professional Installer
Professional advice makes a big difference when choosing and installing a tankless water heater. Installers can assess your home’s compatibility, including total BTU needs and whether your current plumbing and ventilation systems meet requirements.
For instance, natural gas or propane-powered models need proper ventilation, which may involve additional costs for upgrades. Knowledgeable industry veterans can assist you in determining which manufacturers will meet your unique needs.
Durability and warranties, often spanning 10–15 years, will be on the minds of decision makers. They provide assurance that the heater is installed to perform at maximum capacity and energy efficiency. It’s always a good idea to get several estimates to see how their recommended work and costs stack up.
Assess Long-Term Benefits And Costs
A tankless water heater isn’t simply an upfront investment—it’s a long-term commitment. Though it might seem like a hefty upfront investment, the energy savings can really add up in the long run.
These systems are on average 8% to 34% more energy efficient than legacy storage models, resulting in reduced utility bills. They’re small in size, saving indoor space or allowing outdoor installation.
Another long-term benefit is the potential improvement in property value. Buyers tend to love new, energy-efficient systems, which you can advertise on your home to attract more interested buyers.
Consider long term value versus upfront investment. That will help you determine whether the savings and added convenience work with your overall financial goals.
Conclusion
Whether a tankless water heater is right for you depends on your household’s needs and habits. It can be more energy efficient, save you space, and give you hot water on demand. It might be more expensive upfront and require the installation of a professional. Families with high water use, or homes with existing older plumbing may have to consider these factors more closely.
Consider your household’s budget, water usage, and plans for the future. A tankless model is great for smaller households or anyone who wants to save more energy. It may make more sense for larger families to stick with a traditional heater to ensure a consistent supply.
Don’t rush the process, give yourself time to compare options, and consult with a professional if necessary. Whichever is the right choice for your household, it can make a tremendous difference in comfort and savings. Ready to make a choice? Do your research and determine which model would work best in your home.
Frequently Asked Questions
What is a tankless water heater?
Instead of using a conventional storage tank water heater, a tankless water heater heats water on demand, eliminating standby heat losses and utilizing 30%-50% less energy than traditional tank water heaters.
How does a tankless water heater save energy?
Tankless water heaters, unlike traditional tank water heaters, don’t heat water in a tank continuously. They operate on demand, producing hot water only when you need it, leading to potential energy savings and reduced energy bills.
What are the main advantages of tankless water heaters?
Tankless water heaters, known for their energy efficiency and space-saving design, offer an endless supply of hot water. These electric tankless water heaters typically last longer than conventional storage tank water heaters, ensuring households enjoy long-lasting service.
Are there any disadvantages to tankless water heaters?
True, tankless water heaters, particularly electric tankless water heaters, do have higher upfront costs and might require an upgrade to your home’s electrical or gas supply. They may additionally fail to keep up with peak simultaneous water needs.
Can a tankless water heater handle a large household’s needs?
Short answer – it depends. If your household will run hot water at the same time in different places, you may require several units to meet demand.
How do tankless and traditional water heaters compare?
You’ll use less energy and have more space with tankless models, which conserve energy. Traditional tank water heaters are cheaper upfront and are more efficient for homes with greater hot water needs.
How can I decide if a tankless water heater is right for my home?
Consider the upfront budget, the size of your household, and your daily hot water usage patterns. If energy efficiency and saving space are high priorities, an electric tankless water heater or gas tankless water heater could be an ideal choice. For personalized advice, consult with plumbing professionals.