Comparing Tankless and Tank Hot Water Heaters

A tankless water heater provides lots of hot water “on demand”, which means as soon as you turn the faucet on, the hot water heated and then delivered to the tap. This is the main difference between the conventional tank type system and a tankless option. With a tanked system the hot water stays in the tank and is constantly being heated, over, and over again, even when you are not at home. This wastes energy and runs up your electric bill.

Hot Water Needs

A tank style system holds a certain amount of hot water and heats it up to the specified temperature. It is always available for delivery to the tap. If you run two showers, a dishwasher and a clothes washer all at the same time, chances are you have a water heater that is large enough to handle this. If not, you will find out soon enough when your shower turns ice cold.

A tankless system heats the water at the moment you request it from the tap, there is no reserve; the water is being heated on its way to the tap. A possible drawback is that the tankless system may not be able to keep up with the high demand mentioned above, and you may still be taking a cold shower.

You will need to determine your exact hot water needs based on your lifestyle and current water usage.

Tank Placement

If you are considering replacing an old water heater, you already have the water lines and electrical or gas in place. Make sure, your chosen water heater will be the best fit for the space.

A tankless (gas) system requires that it is vented though an outside wall. Thus, it must be mounted to a wall that is on the outside of your house. The electric style does not have this requirement, but it does require mounting to a stud in the wall, preferably a load bearing wall.

A standard tank system can be placed just about anywhere, as long as there is a water line, and gas and/or electric line available. That is, anyplace that is sturdy enough to hold the tank, which can be very heavy.


A standard tank-style hot water heater is very reasonably priced, and is a good option for the budget minded person. However, due to the inherent inefficiency of the tank system, over the long run it could end up costing you considerably more.

A tankless hot water heater initially will cost about twice that of a good tank-style system. But, it will last far longer and be more efficient.


Tankless systems require installation by a certified plumber and electrician, because of the challenges inherent in routing water, electric and/or gas.

A standard tank type system can be installed by a talented amateur, as long as you follow the directions.

If you are planning to relocate your water heater, make sure it’s new location has the appropriate water lines running to it. Moving water lines can be tricky at best and is ideally accomplished by a certified plumber.


A tankless system is very efficient, and that efficiency does not decrease over its lifespan; it will heat the water just as well in 10 years as it does today. Because there is no tank to hold water, it will not be susceptible to the rust or mineral deposits that often hurt a tank system.

A tank-style hot water heating system will lose efficiency as it ages, due to sediment build up and rust in the tank itself. Rust can cause the hot water heater to leak, or in some cases rupture. This does not happen with a tankless system.

Gas or Electric?

If you are replacing your existing hot water heater, choose the same style as you currently have. That is, if you have a gas heater, choose another gas heater; the same goes for electric. This is usually the best thing to do; however, if you wish to change, it is possible to do so.

An electric water heating system (tank-style or tankless) runs on 220v electricity, if your home is not setup for 220v, you will need to have that installed by an electrician.

The tankless gas system, as mentioned above, requires a vent through an outside wall, which a tank-style system does not.


Whichever system you choose, be sure to check with your local building codes for proper placement of the vent (if necessary), as well as any rules regarding hot water heaters.