What is a tankless water heater and is it right for your home?

At a glance: 

• Tankless water heaters only generate hot water when you need it.
• Tank water heaters heat and store the same supply of water throughout the day.
• Tankless water heaters can help you lower your monthly energy bill, while tank water heaters are less expensive to purchase and install. 
• Tankless water heaters require half the maintenance of tank water heaters.

If you’ve been wondering "What is a tankless water heater?” or “How does a tankless water heater work?” then you’re not alone. Each has its own sets of pros and cons.

Tankless water heaters

Also known as on-demand water heaters, tankless water heaters only generate hot water when you turn on a faucet or appliance, offering an unlimited supply of hot water using high-powered burners. 

Tank water heaters 

Also known as storage or traditional water heaters, tank water heaters hold anywhere from 20-80 gallons of water in an insulated tank and draw power constantly throughout the day to keep the water at a consistent temperature. 

Heat pump water heaters

Heat pump water heaters work like refrigerators in reverse and move heat from one place to another, instead of generating heat themselves. This makes them 2 to 3 times more energy efficient. 

“Producing hot water in homes and commercial spaces accounts for 520 million metric tons of carbon in the U.S. each year, that’s equivalent to nearly half the amount of cars on the road today.”

Key differences

Efficiency- Are tankless water heaters more efficient? 

The short answer is yes. Since tankless water heaters don’t require a reserve of water, your home doesn’t need to supply power to them 24/7. This is great because you can get an uninterrupted supply of hot water directly from your main. However, people who live in a larger home might need multiple units to generate the amount of hot water that they need. 

Tank water heaters are generally less efficient because they require a constant source of power, even when they aren’t in use. They can be useful if you usually need a lot of hot water at the same time each day, but if you run out of hot water, you could be waiting a long time before your heater is able to generate more.  

Size- What size tankless water heater do I need? 

Tankless water heaters are very compact and can be mounted to a wall, making them ideal for people who live in smaller spaces like a condo. 

Tank water heaters need to hold a lot of water and take up a lot of space. If you’re in the market for a tank water heater, you could be limited depending on how much room you have to spare. 

Environmental impacts- Are tankless water heaters more sustainable? 

Tankless water heaters are the more sustainable option. Not only do they wait to draw energy until you turn on a water faucet or appliance, but they also usually last longer and are made with recyclable materials.

Tank water heaters are less energy-efficient because they require a constant source of power and have a shorter lifespan. So if you’re hoping to reduce your carbon footprint, this might not be the best option. 

“Widespread adoption of electric-powered water heaters would not only lower emissions, but also save customers some $4 billion in energy bills.”‍

Cost- How much does a tankless water heater cost? 

Tankless water heaters cost more upfront, both to purchase and to install. The average tankless water heater can cost between $600 and $1,500 to purchase and between $1,000 and $3,500 to install. This might seem expensive, but you’d be pleasantly surprised at how much money you can save in operating costs over the years and homeowners are eligible for water heater rebates.

Tank water heaters are usually less expensive on both fronts. Coming in between $600 and $900 to purchase and $900 to $2,500 to install. However, they do tend to be less efficient, which leads to higher operational costs over time. If your goal is to lower your monthly energy bill, a tank water heater is probably not for you.  

Maintenance- Tankless water heaters have lower maintenance

Since tankless water heaters don’t actually store any water, they usually require less maintenance and are less prone to issues like corrosion and sediment built up. You’ll still need to “flush” it once every 1 to 2 years to keep it in top shape, though. It’s important to note that you’ll also need to regularly clean or replace the air filter and water line filter. 

Tank water heaters need more maintenance and are prone to sediment built up and mineral corrosion. They usually need to be flushed twice a year, but the process is quicker and easier. 

Tech trends- Are tankless water heaters more technologically advanced?

Both are becoming more high-tech.

A lot of tankless water heaters come with smart features that allow you to control them remotely with your smartphone and monitor energy usage. 

Today’s tank water heaters offer better insulation, precise temperature controls and energy-saving modes. 

The future of water heating

As we look toward the future, there are a lot of exciting updates that could change the way we benefit from water heaters. One of those innovations is a water heater that also works as a battery, storing energy that can then be used to help power your home and become less dependent on the grid. 

Real life experiences with tank versus tankless water heaters

What several homeowners with tankless water heaters appreciate the most is the consistent and endless hot water supply. While they did have to get used to not running their dishwashers at the same time as their showers, the pros such as lower maintenance and lower energy cost still outweighed the cons. 

Homeowners who opted for tank water heaters noted that the lower purchase and installation costs were enough to justify their decision, even if they do run out of hot water at times. 

Let’s wrap things up

Everybody has different priorities when it comes to choosing a water heater. Luckily, the experts at Tetra are here to help from start to finish, no matter which option you choose. Contact us today to get started.