Tankless vs. Tank Water Heater: What Kind Should You Buy?

Tankless water heaters and tank water heaters both heat water for kitchen or bath use, but they do so with fundamentally different methods.

Tankless water heaters heat the water as soon as the tap is turned on. Tank water heaters heat the water in advance in a large storage tank. Tankless water heaters are more energy efficient, but tank water heaters are more economical and easier to install.

Read on to learn about tankless vs. tank water heaters, their main differences, and which one you should buy.

Tankless vs. Tank Water Heater: Major Differences

Tankless Water Heater

A tankless water heater uses either gas or electricity to heat water as it passes through the heater. The heating source consists of two heat exchangers located in the center of the water heater. Tankless water heaters are sometimes called on-demand, instant, or instantaneous water heaters.

Tip

Point-of-use water heaters are a subtype of tankless heater installed directly at specific hot water outlets (like showers). Both types of water heaters are tankless. The difference is that a point-of-use water heater is located at each hot water delivery point, providing instant hot water.

Tank Water Heater

A tank water heater, sometimes called a storage water heater, uses gas or electricity to heat water in a 20-. 40-, 50, 55-, or 80-gallon tank. The heating source is located at the bottom of the tank. The water is heated much like a pot of water is heated on a stove.

The water is kept constantly hot. When hot water is used, new cold water enters the tank and the heating source automatically activates. When the water has reached the set temperature, the heating source turns off.

Performance

Tankless Water Heater

Tankless water heaters generally have a flow rate of 2 to 5 GPM. For gas tankless water heaters, a 5 GPM unit is needed to raise the water temperature by 70ºF. Electric tankless water heaters are slower, at about 2 GPM for the same temperature rise.

Unless the tankless water heater happens to be a point-of-use demand heater, it delivers hot water throughout the house as fast as a tank water heater.

Tank Water Heater

Tank water heaters put out a lot of hot water at a fast rate. A 50-gallon, 50,000 BTU gas-fired tank water heater can deliver up to 80 gallons of hot water in the first hour.

Because tank water heaters are located remotely from the delivery point, it takes a while for the hot water to travel to the delivery point. Depending on the size of the house, the configuration of the plumbing, and the distance between the water heater and delivery point, this can take anywhere from a few seconds to several minutes.

Best for Performance

With either a tankless or a tank water heater, you won't necessarily get hot water the moment you turn on the tap. It can take just as long for hot water from a tankless system to reach the delivery point as with a tank water heater.

A tankless water heater moves the water slowly through its heat exchanger to heat it. By contrast, a tank water heater's water is already hot, plus it's ready to be delivered out of the tank—no circuitous path through a heat exchanger.

Energy Use and Efficiency

Tankless Water Heater

Tankless water heaters are up to 34-percent more energy-efficient than tank models in homes that use less than 41 gallons of water per day.

They are less efficient for homes that use more water per day: up to 14-percent more energy-efficient than tank models for homes that use 86 gallons of water per day.

Tank Water Heater

Tank water heaters heat water to a set temperature point and then turn off when the water reaches that temperature. The heater holds the water at that temperature all throughout the day and night by continually turning on and off as needed. This means that hot water is kept at-ready when no one is using water—even during long periods.

Tank water heaters are internally insulated. You can also wrap inexpensive water heater insulation over the tank. Like a coat for your water heater, it adds up to R-10 insulating values.

Tip

Turn down your water heater to between 120°F and 140°F. Not only does this save energy but it also reduces the chance of scalding. When you go away for a long period, turn down the water heater to its lowest setting or you can even turn it off.

Best for Energy Use and Efficiency

Tankless water heaters are more energy-efficient than tank water heaters by as much as 34-percent.

Maintenance

Tankless Water Heater

For a system that works several times a day, water heater maintenance is important to keeping the heater is best condition and for energy efficiency.

Tankless water heaters can be maintained by the owner by cleaning the inlet filter and the air filter, inspecting the water heater, and descaling and flushing the unit.

Tank Water Heater

Tank water heaters are largely self-maintaining. Once a year, the water heater should be flushed and cleaned as heavy sediment builds up on the bottom of the tank.

Occasionally, the T&P valve on the side of the water heater should be tested to make sure that it can drain pressure and water.

Best for Maintenance

Tankless and tank water heaters require roughly the same amount of maintenance.

Lifespan

Tankless Water Heater

A tankless water heater can last up to 20 years, if well-maintained.

Tank Water Heater

A tank water heater will last from eight to 12 years, depending on the level of maintenance.

Best for Lifespan

A tankless water heater can last up to 150-percent longer than a tank water heater.

Tip

It's probably time to replace your tanks water heater if leaks have developed from the tank. Tanks cannot be repaired, but fittings to and from the heater can be tightened or repaired. Foul-smelling water, discolored water, and banging or rumbling that isn't cured by flushing may also indicate the need for replacement.

Installation

Tankless Water Heater

A licensed plumber and/or electrician should install a tankless water heater. A tankless water heater may require new gas lines, since conventional tank water heaters may have 30,000 BTU/H lines, with tankless units requiring three or four times that amount (30,000 to 130,000 BTU/H).

Tank Water Heater

Nearly every plumber can install a tank water heater. Do it yourselfers with intermediate plumbing experience, too, can install a tank water heater, further lowering the cost.

Water heaters must be installed in accordance with local codes and utility company requirements, and permitting and inspection are usually required.

Best for Installation

A tank water heater is easier for installation than a tankless water heater. Tank water heaters are standard in most homes, so it's an easy exchange of a new one for an old one. The space is already reserved for a tank water heater, so it's not necessary to find or carve out a new space.

Cost

Tankless Water Heater

A tankless water heater costs from $1,200 to $4,250 to install. Converting from a tank water heater to a tankless water heater will cost more.

Much of the cost of a tankless water heater depends on the cost of the unit itself, as they can range from $400 to $1,200.

Tip

The best tankless water heater heats only as much water as is needed: no more, no less. It strikes a balance between rapid but efficient flow rate, temperature control, ease of installation, and energy efficiency.

Tank Water Heater

A tank water heater costs from $975 to $2,400 to install. Tank water heaters are prevalent and are found in a wide range of prices.

Best for Cost

A tank water heater costs about half as much to purchase and install than a tankless water heater.

Appearance

Tankless Water Heater

Tankless water heaters are relatively small, flat, and wall-mounted. Even a high-capacity 11 GPM (gallons per minute) tankless water heater is just 27 inches tall and 19 inches wide, with a projection of about 12 inches.

Tank Water Heater

Tank water heaters have a characteristic tall, cylindrical appearance. The tank is about 60 inches high and between 20 and 24 inches in diameter.

Not only are tank water heaters large but they also require at least three inches of side clearance, 12 inches of top clearance, with more space being preferred.

With a top vent, expansion tank, T&P valve, and drain pan added, a tank water heater is bulky unit.

Best for Appearance

Tankless water heaters are slimmer and more compact than tank water heaters.

Tankless vs. Tank Water Heater: How to Choose

Shedding the huge, bulky tank means that tankless water heaters tuck away far better than conventional tank water heaters, making them a good choice for small- or medium-size homes.

Tankless water heaters are also a good choice for homes with lower hot water demands since most of the energy savings are realized by homes that use less than 41 gallons of water per day.

Tank water heaters are economical to purchase and install. They do use more energy than tankless heaters but they can reliably deliver hot water in large quantities.

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Frequently Asked Questions

Which is better, a tankless or tank water heater?

A tankless water heater and a tank water heater are best for different types of homes. A tankless water heater is best for smaller homes and for owners who can afford the higher up-front installation cost. A tank water heater is best for homes where it's important to save money on the unit and on the installation. 

Is it worth switching to a tankless water heater?

It may not be worth it to switch to a tankless water heater if new gas lines need to be installed to accommodate the increased energy demand of the water heater. But it may be worth switching if long-term energy efficiency is a concern.

Can you replace a 50 gallon water heater with a tankless water heater?

You can replace a 50-gallon water heater with a tankless water heater that has a higher flow rate, such as a 5 GPM tankless heater model.

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Read the original article on The Spruce.