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Tankless Water Heaters VS. Tank

tankless water heater vs tank Tankless Water Heaters VS. Tank

When renovating or constructing a new house, there is a lot you have to handle. From the flooring type to the paint, kitchen renovations, more space or fancier finishes, etc. It often feels like you have a million decisions to make. And in the midst of all these cosmetic choices, one can overlook or forget about more practical decisions like upgrading your water heater.

The type of water heater you have has a lot of bearing on your life than you realize. It affects the amount of storage space you have, and the décor choices. However, its major influence is on the utility bill. What most homeowners don’t understand is that a quarter of their annual energy sending is on the water heater. Only heating and cooling consume more energy. There have been developments made to water heaters and we have more efficient models. Therefore, if you are using a 10-year-old water heater, there is a high likelihood that you are spending more than you should.

If you do decide to install a water heater, you will have to first decide between the traditional or tank one and the modern tankless water heaters. Nevertheless, don’t make your decision based on cost alone. Below are some factors to consider when making a purchase.

Efficiency – If you are looking for a system that will save you money in the long term, or you are concerned about the environment, then you should go for the most energy-efficient systems. Yes, regulatory agencies have set standards for manufacturers, but the truth is that some systems are just better than others. The efficiency will be conveyed by the energy factor. More efficient systems have higher EFs.

Space – How much space do you have for the unit? First, you need enough space to accommodate the unit, and though these systems don’t need too much space around them for them to operate, you need to ensure that you have left sufficient space for a handyman to come in and service it. Also, remember that the size of heaters increased both in width and height due to a 2015 federal regulation. Therefore, you will need more space for a unit with the same capacity.

Which extra features do you want? – Not all water heaters are the same, and the differences are more than just tank or tankless. Some of these units are fitted with features such as Wi-Fi that allows you to adjust the temperature remotely.

Fuel source – Most units run on gas or electricity. If you are looking to replace it, be sure you are familiar with your energy source. Also, if your system runs on gas, be sure if it’s propane or natural gas. Finally, you might be forced to look for an alternative energy source if you are looking to change your unit. One that will work with your new system.

The final decision on your preferred water heater is yours. There are tradeoffs but it boils down to you, the homeowner. Below is a guide to help you make an educated decision.

Initial Cost and Lifespan

Tankless systems are more expensive than tank units with the initial cost averaging at around $3,000. This is unlike the tank systems whose cost is about $900 for a 40 to 50-gallon unit. However, the prices will depend on the type or brand of the tank, the size, the specifics of your house, and whether you are replacing or installing a new unit.

The latter will influence the cost since the contractor will have to retrofit your house if you are installing a new unit.

As for the lifespan, tankless systems will last longer with a span of about 20 years, while the tank systems will only serve you for 8 to 15 years.


Tank water heaters are easy to install. The reason for this is because most it is far and away the most commonly used system in the country, installers and repairmen are deeply familiar with it, and old habits die hard. Also, they take a few hours to install or replace. As for the installation cost, say you are replacing a gas heater with a gas heater, expect the price to be around $500.

However, if you want to switch to another energy source, be prepared to pay more. The price difference isn’t that significant though as tank systems don’t need piping and wiring modifications. Ensure the unit is fitted inside your home as it cannot withstand harsh weather. Nonetheless, one shortcoming of a tank system is that it requires a lot of space.

Tankless water systems, on the other hand, are more expensive costing upwards of $1000 and difficult to install. First, you have to retrofit your electrical system to support your new unit or run a dedicated gas line. With the tank systems, there is no need for this as you only need to hook it to the system. Second, with the modern systems, you might need to install more equipment such as pipes, and exhaust vents.

Another thing to consider is that there are very few installers and repairmen with the skills to handle these units, which makes them expensive. Despite these drawbacks, these systems do have their advantages. They require less space, and you can install them on your outside wall.

How They Operate

Tank heaters operate by reheating a certain finite amount of water. Often between 20 and 80 gallons. This water is always available for use. When a water-using appliance calls for it, warm water will exit through the top and cold water will replenish the system from the bottom. However, seeing as heating water isn’t instantaneous, you can run out of hot water temporarily, which often happens during peak water usage hours. The finite amount of hot available water is the one chief complaint about tank heaters.

Conversely, tankless heater units heat your water on demand. Though they promise an endless supply of hot water, they have output limits in that they cannot support several activities simultaneously.


tank or tankless water heatersOne of the things homeowners considered when installing a new water heater system is the energy efficiency of the unit, and this is where there is a huge dramatic difference. Tank systems are gross polluters. They are only 67% efficient at best, meaning that 33% of the energy used to heat the water goes up the chimney. The reason for this is because the units are ever running. Even when one is asleep or out of the house tank water heaters are continuously working. Most of this water isn’t used resulting in wasted energy. Also, when the water temperature falls below a certain threshold, the heater will reheat the same water wasting energy in the process.

Tankless systems, on the other hand, are 95% efficient. When using a tankless unit, you can save between 24% and 34% more energy unlike when using a tank unit. If gas fired, tankless water heaters can save homeowners upwards of $100 annually, while electric tankless units will save you $44 annually.

The only shortcoming though is that these systems can cost twice or triple the conventional units. So, you will have to recoup your investment before the saving kicks in.


The final decision is yours to make. Just ensure you check all the pros and cons before making that final decision.