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Tankless vs Tank Hot Water Heaters: 15 Pros and Cons to Think About

There are two types of water heaters that homeowners use with great success today: tankless and tank-based.

Tankless water heaters offer a number of advantages to homeowners. Because they do not require a tank to hold water, there is less of a leaking risk with the tankless option. They are priced competitively with tank-based units as well, while requiring less maintenance than traditional systems.

There are some disadvantages which must be considered as well. A tankless system that can support a shower and two sinks simultaneously will likely have a 3 x 40 Amp breaker requirement. The most productive models have a 4 x 40 Amp requirement. You may also need to install 3×8 AWG or 4×8 AWG to support the operation of the unit.

Here are some of the additional advantages and disadvantages of tankless water heaters to consider before finalizing an investment.

What are the Advantages of Tankless Water Heaters?

Tankless water heaters are extremely compact

Tankless water heaters take up much less space than a conventional water heater. That is because there is no longer a requirement to store water for it to be heated. The tankless system connects directly to the plumbing of the home. Water cycles through the unit, providing hot water on-demand. That makes it one of the most convenient options available today for homes, especially those that use 41 gallons of hot water, or fewer, each day.

Tankless water heaters eliminate almost all standby loss

Standby loss occurs when hot water cools down after it has been heated. Traditional tank-based hot water heaters experience this loss in two ways:

  • When the water in the tank cools down.
  • When the water cools down in the plumbing system before it is used.

No hot water heater can eliminate all standby losses. If the hot water must travel some distance before it is used, then there will be some type of loss present. Installing a tankless hot water heater does remove the energy costs that are involved with the standby losses that traditional systems provide. 

Tankless water heaters can provide immediate hot water

Have you ever turned on the hot water at a faucet… and then waited for the hot water to arrive? All that water goes down the drain, wasted. With a tankless water heater, the hot water is available almost immediately. You’ll no longer need to let the hot water run to have access to the correct temperature of water. That means you’re wasting less water with each use. The total amount of water savings in a home, in just this one area, may be as high as 10%.

Tankless water heaters provide unlimited hot water if used as instructed

Tankless water heaters can be overwhelmed if there are high supply demands placed upon the unit. You’ll need to look at what the specifications for the tankless heater happen to be before installing it in your home to know if it can meet your needs. Some models can heat a shower and two sinks simultaneously. Others can heat just 2 gallons of water per minute, which may not be enough to serve one shower with an older shower head in use.

Tankless water heaters have an extremely long operational life

The operational life of a tankless water heater is usually 20 years, if not more. For a tank-based traditional hot water system, the lifespan is usually 10+ years. With regular maintenance and repairs, a tankless system may last up to 30 years, or up to 3 times longer than a traditional hot water heater. That means you’ll have lower overall upkeep costs with a tankless water heater, which for some homes, is a positive that outweighs all the potential disadvantages that come with this design. 

What are the Disadvantages of Tankless Water Heaters?

They can struggle to provide prolonged hot water for showers

If you’ve purchased an entry-level tankless water heater, then there’s a good chance that it supports about 2 gallons per minute of hot water. Many of today’s homes use a shower head that disperses water at 2.5 gallons per minute. That means your hot water may not be as hot as you want it when showering. You may even need to upgrade your shower head to take advantage of the constant stream of hot water the tankless system can produce.

Some models do not heat water to consistent temperatures

Some tankless water heaters will only heat water to a consistent temperature when it fits within a specific GPM window. If you’re maxing out the system on a regular basis, you may find that the initial spurts of water are much warmer than what you receive during peak use. For some models, this issue applies even if you stay within the usage guidelines. If water pressure varies in different areas of a home, the temperature changes can be downright uncomfortable.

Electrical tankless models may require a higher power draw

Tankless water heaters must heat water quickly for them to be functional. That means a high-power draw is often required to meet the demands that are placed on the unit. For homes that use more than 80 gallons of hot water each day, the energy savings can be quite minimal – as little as 8%. If your home uses more than 100 gallons of hot water each day, it may even cost more to have a tankless water heater installed.

Gas-powered tankless water heaters may require venting to be installed

It is convenient to have a tankless water heater that can be installed almost anywhere in the home. If your water heater must operate off of gas, however, that convenience goes away. Gas-powered models require venting, or an exhaust flue, to be operated safely. That venting must lead to the outdoors. For some homes, that limits the placement options which are available to the tankless water heater. If you need a unit that will provide 5 gallons per minute of hot water, you’re almost forced to use a gas-fired unit as well, which will set you back around $1,000 for a reputable model. 

The pilot lights on a tankless heater operate just like a storage-based tank unit would

Tankless water heaters can be an energy-savings upgrade for many homes. If you’re investing into a gas-fired unit, you’re still going to have the pilot light energy issue with which to contend. In tankless models, this actually wastes energy because in tank-based unit, the pilot helps to heat the water. That does not happen with a tankless model.

What are the Pros and Cons of a Tank-Based Water Heater?

Traditional water heaters are often preferred by homeowners because of their water storage capabilities. If you have an emergency situation, the water heater may contain 50-100 gallons of water you can access.

Here are some more of the pros and cons of staying tradition with your hot water setup.

PRO: An Initially Lower Cost

Tank-based water heaters are usually priced in the $300-$600 range for top-quality units. For families on a budget, they’ll receive more hot water support than a tankless model at a similar price could provide.

CON: Higher Utility Bills

Tank-based water heaters have standby expenses that come in the form of electricity or gas usage. That means the water is heated, then reheated, before it is actually used. That’s why the power bill is higher in winter. Colder temperatures force tank-based water heaters to offset higher energy losses.

PRO: Cheaper to Maintain

The technology used in storage tanks for water heaters is pretty basic. You have a heating element, a few features, and that’s about it. Repairing a tank-based unit is much easier than repairing a tankless system.

CON: You Run Out of Hot Water

If you live in a home with a tank-based system, then you don’t want to be the last person to take a bath or shower. There won’t be any hot water left for you. It can take 1-2 hours to fully recharge the system as well. When combined with other appliances, like a dishwasher or washing machine, that also require hot water, a tank-based system isn’t as flexible as a modern tankless system tends to be.

CON: A Shorter Lifespan

Even the best tank-based hot water systems will last about 15 years before they must be replaced. If you have heavy scale issues or a leak which rusts out the bottom of the unit, the tank may need to be replaced as often as every 6 years. In most instances, a tankless water heater is going to outperform a tank-based system in terms of pure longevity.

For most homes, the elimination of standby losses and improvement of insulation around hot water piping, when combined with a tankless water heater, can cut water energy heating costs by 10% or more. 

A 10% savings might not seem like much, but it does add up over time. Even if you’re water energy heating costs are just $100 per month, your system will be able to pay for itself over the life of the unit.

If you’re in the market for a new tankless water heater, take a look at our reviews here.

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