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Pros and Cons of Tank vs Tankless Water Heaters

Tankless vs Tank Water Heaters

The Heated Debate on Water Heater Installation

The Great Debate | Do Tank Or Tankless Reign Supreme?


Water heaters are a significant investment for homeowners, with a lifespan of over a decade. When considering a new water heater, it’s important to weigh the options between electric and gas water heaters, each with its own set of considerations such as installation costs, efficiency, and suitability for your space. When it’s time to equip your new home or replace an old water heater, it’s crucial to consider cost, efficiency, longevity, and water heater installation costs. This comparison of tank storage water heaters and tankless water heaters aims to help homeowners and contractors decide on the best option. We’ll examine the pros and cons of each type to help you make an informed decision.

What Are Tankless Water Heaters?

Tankless water heaters, also known as on-demand water heaters, use high-powered burners to rapidly heat water as it flows through a heat exchanger and deliver it directly to your faucets or shower without storing it in a tank. Tankless water heaters are usually powered by electricity or gas. Studies have shown that these types of water heaters are, on average, 22 percent more energy-efficient than traditional gas-fired storage-tank models. Monitoring energy costs can help homeowners decide between tankless and traditional electric water heaters, as significant differences in energy costs could indicate a problem with the water heater, suggesting the need to adjust the thermostat or seek professional help.

Traditional Tank Storage Water Heaters Explained

Storage tank water heaters are commonly found in most homes. They consist of an insulated tank, typically holding 30-50 gallons of water, to heat and store the water until it’s needed. A pipe emerges from the top to deliver hot water to its destination, such as the kitchen, bathroom, or other sinks.

Storage-tank water heaters can use either natural gas or electricity as fuel. Comparing electric water heaters and gas water heaters, it’s notable that electric models, which use electricity to heat water and have different venting systems, generally cost between $600 to $3,500 to install and are well-suited for small apartments due to their energy efficiency and operational costs. On the other hand, gas water heaters, despite their lower operating costs and the need for venting to the outside, come with a higher upfront cost but use almost 50 percent less energy, making them more cost-effective over time. These water heaters feature a temperature and pressure-release valve that opens when either temperature or pressure exceeds preset levels.

Comparing Energy Efficiency: Tankless vs Tank Water Heaters

Homeowners with on-demand (tankless) water heaters that use 41 gallons or less of hot water each day enjoy between 24 and 34 percent more energy efficiency than storage tank water heaters. If you use a lot of hot water daily (around 86 gallons), you might see an additional 8 to 14 percent energy efficiency. Additionally, gas water heaters are known for their lower operating costs compared to electric models, offering a more affordable option over the long run due to their energy efficiency.

While tankless water heaters have a higher upfront cost than traditional storage tank water heaters, they last longer, with a useful life of 20+ years, compared to storage tank types, which last only 10 to 15 years before needing replacement. For maximum energy savings, consider installing a tankless water heater at each hot water outlet, which can result in 27 to 50 percent energy savings.

Pros & Cons of Tankless Water Heaters

Like any product, tankless water heaters have their advantages and disadvantages. One significant advantage is the long-term savings they offer over tank-style water heaters, particularly when considering the water heater replacement cost, which can vary based on the design and features of the unit. Tankless models tend to have lower operating and maintenance costs, and they avoid the higher labor and material expenses often associated with replacing and converting tank-style water heaters.

Advantages of Tankless Water Heaters:

Tankless water heaters offer several significant advantages over conventional tank models. With their on-demand heating system, tankless units provide endless hot water without the limitation of a storage tank, ensuring you never run out during showers or while doing laundry. They are also remarkably energy-efficient, saving homeowners up to 34% on their utility bills by only heating water when it’s needed. Tankless heaters have a much longer lifespan, lasting up to 20 years compared to just 10-15 years for tank models. Their compact design allows for installation in tight spaces, and some can even be mounted outdoors. Although costlier upfront, the long-term energy savings, endless hot water supply, and durability make tankless water heaters an excellent investment for eco-conscious and cost-savvy homeowners.

  • Saves you money over time due to energy efficiency.

  • Longer useful lives than storage tank water heaters, typically 20 to 30 years.

  • Smaller footprint and can be installed in tight spaces or even on outside walls.

  • Provides hot water on demand without waiting for the tank to heat up.

Disadvantages of Tankless Water Heaters:

Despite their advantages, tankless water heaters do have some drawbacks homeowners should consider. The upfront cost is significantly higher than tank models, with installation further adding to expenses due to the complexity of relocating existing piping. Tankless heaters may also struggle to keep up with high hot water demand if multiple showers or appliances are running simultaneously. While they promise endless hot water, large households may experience a cold shower if the tankless unit cannot meet the demand. Additionally, tankless heaters require annual maintenance by flushing the system to prevent mineral buildup, which can be an inconvenience and added cost. For homes with moderate hot water usage and tighter budgets, a traditional tank water heater with its lower upfront costs and simpler operation may be the more practical choice.

  • Higher initial purchase cost than storage tank water heaters.

  • Installation costs can be higher when replacing a storage tank with a tankless unit due to the complexity of relocating existing piping.

  • Can struggle to keep up with high hot water demand if multiple showers or appliances are running simultaneously.

Pros & Cons of Storage Tank Water Heaters

Advantages of Storage Tank Water Heaters:

Traditional tank water heaters remain a reliable and affordable option for many households. Their biggest advantage is the lower upfront cost compared to tankless models, making them an economical choice, especially for those on a tight budget. Tank heaters also have simple operations and require minimal maintenance, resulting in lower repair costs over their lifetime. If a tank unit does malfunction, repairs are generally straightforward and inexpensive. With a storage tank constantly heated and ready to supply hot water, these units can handle high-demand situations better than some tankless heaters. For smaller households with moderate hot water needs, a tank heater’s ample storage capacity is often sufficient. While they may not be the most energy-efficient, tank heaters offer a familiar and dependable solution for hot water delivery at a reasonable price point.

  • Lower initial cost compared to tankless units.

  • Simple operation, resulting in less costly maintenance and repairs.

  • Easy and inexpensive to repair when malfunctioning.

Disadvantages of Storage Tank Water Heaters:

While tank water heaters are an affordable option upfront, they come with some significant drawbacks in the long run. Their constant need to keep a large tank of water heated results in higher energy consumption and utility costs, particularly for larger tank sizes. Tank heaters also have a limited supply of hot water based on their tank capacity, often only able to provide enough for two to three consecutive showers before running out. This makes them impractical for larger households with high hot water demands. Additionally, tank heaters take up considerable floor space due to their bulky size. Perhaps their biggest downside is a relatively short lifespan of 10-15 years, requiring replacement more frequently than tankless models that can last 20 years or longer. The inevitable mineral buildup and potential for tank leaks also pose maintenance issues and water damage risks over time.

  • Higher utility bills due to continuously heating and reheating water, regardless of demand.

  • Larger size and space requirements compared to tankless units.

  • Limited hot water capacity, often supporting only three consecutive showers before running out of hot water.

  • Shorter useful life, typically 10 to 15 years, requiring more frequent replacements than tankless units.

The Bottom Line

If your budget allows for the higher initial cost, a tankless water heater can save you money over time through energy efficiency. However, if you’re on a fixed modest income, a storage tank water heater might be the more practical choice. Discuss your needs and options with a professional from Evolution Plumbing to make the best decision for your home and family.

At Evolution Plumbing, our experts can guide you through the often-confusing world of water heaters, helping you select the right type, size, and brand for your specific requirements. Don’t hesitate to contact us for objective information and recommendations tailored to your needs.

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  • How much more efficient are tankless water heaters compared to tank models?

    Tankless water heaters are 24-34% more energy efficient than storage tank models for households using around 41 gallons or less of hot water per day. For higher usage around 86 gallons per day, tankless heaters are about 8-14% more efficient.

  • Do tankless water heaters really provide endless hot water?

    While advertised as providing endless hot water, tankless units do have flow rate limits. For simultaneous, high-demand usage like multiple showers running, some tankless heaters may struggle to keep up and cause temperature fluctuations.

  • How long do tankless and tank water heaters typically last?

    Tankless water heaters have a much longer lifespan, lasting 20-30 years on average. Traditional tank models only last around 10-15 years before requiring replacement.

  • Which type of water heater has lower operating costs?

    Tankless water heaters have lower operating costs in the long run due to their energy efficiency. However, tank heaters are cheaper to maintain and repair since they have simpler components and mechanisms.

  • Are tank water heaters less expensive to install than tankless?

    Yes, tank water heaters generally have lower installation costs since they don’t require modifications to the existing plumbing setup. Tankless units often need pipe rerouting, adding to the installation expense.

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