Tankless Water Heaters vs. Storage Tank Water Heaters

Are you looking for a more efficient way to heat your home’s water? If so, you may want to consider the debate between tankless water heaters and storage tank water heaters. In this article, we will discuss the pros and cons of each type of system and which one is right for you in the long run.

We will look at factors such as installation cost, performance, energy efficiency, the life of the unit, hot water usage, and space consumption. So grab a cup of tea and let’s dive into this heated debate between tankless and storage tank water heaters!

Tankless Water Heaters vs. Storage Tank Water Heaters

What is a Storage tank water heater?

The most widely used type of water heater in residential properties is the storage tank system. They range from 20 to 80 gallons in capacity and are filled with whichever fuel source your home has — electricity, gas, oil, or propane.

The tank is heated in the reservoir and when you turn on the hot water tap, hot water is released from the top of the tank while cold water is filled at the bottom. This process of constantly heating up water uses a lot of energy and causes standby heat loss which increases utility bills significantly.

Although they may have an initial lower cost compared to tankless systems, they are not as efficient or cost-effective over time due to their high operating costs.

What is a Tankless water heater?

A tankless water heater, also known as an on-demand or instantaneous water heater, is a highly efficient way to heat water. Unlike traditional storage tank water heaters, a tankless water heater only heats up the amount of hot water needed for a particular task rather than constantly heating and reheating a large volume of stored hot water.

This makes them much more energy efficient as there is no standby heat loss. Tankless water heaters are available in three fuel sources – electricity, natural gas, or propane – and average 2 to 5 gallons per minute. Some models come with an intermittent ignition device rather than a standing pilot light to reduce wasted energy from heating stored water.

Additionally, tankless models require less space and have a lifespan of 10-15 years, making them an excellent long-term investment for any home.

What is a Gas-Powered Tankless Water Heaters

Gas-powered tankless water heaters are an efficient way to heat your home’s hot water. They provide an endless supply of hot water and only need to be turned on when you need it, saving energy and utility costs in the long run.

Tankless water heaters use a heat exchanger to quickly and efficiently heat cold water as it passes through a unit. This type of heater can be powered by either natural gas or propane, with installation costing between $1,000 to $1,500.

If your house is near a natural gas line, it should be simple for you to connect and use it; if not, then you will have to purchase and store propane on your own. Tankless water heaters are more expensive initially than storage tanks but their energy efficiency pays off over time in lower monthly utility bills.

They save space too since they don’t require a bulky storage tank like other types of hot water heating systems do. Gas-powered tankless water heaters are ideal for those who want an endless supply of hot water without having to worry about running out or sacrificing energy efficiency and space in their homes.

What is an Electric-Powered Tankless Water Heater

Electric tankless water heaters are more energy-efficient than conventional storage tank water heaters. This type of water heater is more efficient and cost-effective than its counterpart, saving homeowners money on their energy bills in the long run.

Electric tankless water heaters provide hot water on demand, meaning they only heat up when you turn on the tap. This eliminates standby heat loss, which refers to the energy lost while storing large amounts of heated water in a storage tank. Since electric-powered tankless systems don’t use any fuel sources like gas or propane, they are also much more eco-friendly.

In addition to being more energy efficient and cheaper to install than gas models, electric tankless water heaters can last up to 10-15 years with proper maintenance — much longer than traditional hot water tanks. The heating element in an electric tankless system is typically made from copper or stainless steel, making them incredibly durable and reliable.

For those looking for a cost-efficient and eco-friendly way to ensure hot running water in their homes, an electric-powered tankless water heater is a great choice.

How are “Traditional” Tank Storage Water Heaters Different?

The biggest difference between traditional storage-tank water heaters and newer tankless ones is that tankless versions don’t store hot water at all—they use a heat exchanger to rapidly heat cold incoming water as it passes through the unit.

This eliminates any wait time for hot water and reduces energy costs since you’re not keeping 40+ gallons of warm/hot water constantly heated in a storage tank.

Tankless vs. Storage Tank Water Heaters

When it comes to water heaters, deciding between tankless and storage tank models can be difficult. Both types have their advantages and disadvantages when it comes to hot water demand, energy efficiency, installation costs, and more.

If your hot water demand is low or if you don’t need a lot of hot water all at once, then a tankless system may be the best option for you. These systems are highly efficient as they only heat the water when needed.

Tankless systems also tend to last longer than storage tanks (up to 10-15 years), are relatively easy to install, and require minimal maintenance. However, the cost of installation is typically higher than with a storage tank system.

On the other hand, if your family uses a lot of hot water or needs it quickly, then a storage tank model is probably better for you. Although these systems have high energy costs due to standby heat loss from stored heated water, they offer fast delivery of large volumes of hot water in an instant. Storage tanks are also generally cheaper to install than tankless systems and require less maintenance over time.

Deciding between a tankless or storage tank water heater should consider your needs and budget. Whichever one you go with will provide reliable performance for many years down the road.

Installation cost

Installation costs for water heaters can vary widely, depending on the type of heater you choose and where you are located. Point-of-use tankless water heaters generally have the most cost-effective purchase and installation, compared to storage tank water heaters.

The national average to install a storage-tank water heater is around $400 to $1,000 while installing a whole-house tankless heater can cost an average of $2,500 or more. If you’re looking to save money on installation costs, try taking the DIY route with storage tank water heaters—just be sure that you know what you’re doing!

Tankless water heaters are more complicated and require professional installation in order to work correctly. With these tips in mind, you can find the right type of water heater for your home and budget without breaking the bank on installation costs.

Installation Restrictions

Tankless water heaters are the optimal choice for homeowners who have limited space in their homes, as they are far more compact than traditional storage tank water heaters. Storage tank water heaters require much larger areas to install, as they contain a large tank that needs to be placed on the floor or against a wall.

This means that you lose valuable square footage that may be used otherwise. Tankless models, however, can easily be installed on the wall and take up much less room than their tank counterparts, making them perfect for areas where space is restricted.

Not only do these models save space but they also save you money in utility bills and energy costs due to their efficient heating system and lack of standby heat loss from an overfilled storage tank.

Therefore, if you’re looking for a hot water heater with an efficient design and don’t want to sacrifice valuable square footage in your home, then a tankless model is the way to go!


When it comes to performance, storage tank water heaters and tankless water heaters are both capable of heating water on demand. However, the performance of a storage-tank water heater can be more reliable.

Tankless water heaters have a flow rate of up to 5 gallons per minute and electric tankless models require at least 30 amps to operate. This means several appliances running simultaneously could cause the unit to struggle to keep up with demand.

Storage tanks have the advantage of being able to keep large amounts of hot water stored and ready for use. If you choose the right capacity for your needs, you won’t need to worry about running out of hot water.

Tankless models tend to have a longer life span of 10-15 years compared to 6-10 years for storage tanks but they also come with higher initial cost and installation costs than their storage counterparts.

Ultimately, energy efficiency is a major factor when deciding which type of water heater is right for you. Both types can save energy if used properly but storage tanks are typically more energy efficient overall.

Energy efficiency

Tankless water heaters are quickly becoming the go-to choice for homeowners looking to reduce their energy costs. Compared to storage tank water heaters, a tankless water heater is up to 34% more efficient and can save you hundreds of dollars in utility bills each year.

Unlike a storage tank heater, a tankless heater does not have standby heat loss because it heats up water on demand when it’s needed. This means that there is no wasted energy from keeping hot water stored in a large tank all day long.

Instead, cold water is heated instantly when the hot water tap is turned on; and only the amount of gallons needed will be heated – rather than wasting energy heating an entire tank full of water.

The core of a tankless system lies in its heat exchanger, which uses either gas or electricity to warm up the cold incoming water as it passes through the unit. Electric models also feature a heating element for added efficiency.

Tankless systems are perfect for those who need high volumes of hot water at once, such as if you have multiple bathrooms or appliances that use hot water.

When it comes to energy efficiency, tankless water heaters are hard to beat! With no standby heat loss and incredibly efficient technology, they make an ideal choice for any homeowner looking to save money on their utility bills while still getting plenty of hot water on demand.

Life of the unit

Tankless water heaters have a much longer life expectancy than storage tank water heaters, making them the better choice for homeowners looking for an energy-efficient and reliable hot water solution. Tankless models are expected to last up to 20 years or more, while storage tanks usually only last 10-15 years.

In order to extend the life of a storage tank unit, it is important to replace its anode rods regularly; frequency depends on the type of heater and if there is hard or soft water in the home. With tankless units, this is not required, making them easier and less expensive to maintain over time.

Hot Water Usage

Hot water is one of the most important elements of any home. Whether it’s for bathing, cooking, or cleaning, a reliable and consistent source of hot water is paramount. Nowadays, tankless and storage tank water heaters provide homeowners with two options to achieve this goal.

Tankless water heaters provide an endless supply of hot water on demand with no waiting required. This is because the device instantly heats cold water as it enters the system; when you turn on a faucet or shower head, you are greeted with hot water immediately!

Storage tank systems store up a certain amount of hot water in an insulated container which can be used as soon as it is needed.

The downside here is that once that reserve has been depleted then there will be a wait for new hot water to become available again; however, this can be remedied by getting a larger model which will come at an additional expense both in installation and operating costs. On the plus side though all the stored hot water is always ready to use at once.

Both types of heaters have pros and cons that need to be weighed carefully before making your purchase decision in order to ensure your home remains comfortable with ample supplies of warm/hot water for many years to come!

Space Consumption

When it comes to choosing a water heater, space consumption is a primary consideration. Tankless water heaters are the clear winner when it comes to space-saving as they are much smaller than storage tank water heaters and require far fewer square meters. If you have limited space in your home, then a tankless water heater is definitely the way to go.

On the other hand, if you have enough room for a storage-tank water heater, then you can make an informed decision based on other factors such as energy efficiency and cost. However, keep in mind that while storage tanks may be more efficient than their tankless counterparts in some cases, they will require more space and also come with higher installation costs.

Which is Right for You in the Long-Run?

While tank water heaters provide an immediate installation with little to no maintenance, tankless water heaters have a higher initial cost but often make up for it in the long run with their energy efficiency.

Tankless systems use sophisticated technology to quickly and efficiently heat cold water as it passes through a heat exchanger. This process requires less energy than traditional storage tank systems and can result in lower utility bills.

Additionally, since there’s no need to store pre-heated hot water, they can provide an endless supply of hot water on demand. Although tankless systems may require more of an upfront investment, they are a great option if you’re looking to save money on your energy bill and have a heater that will last longer.

Pros and cons of tankless systems vs Storage tank systems.

Tankless water heaters have become increasingly popular for their potential to save money over time, provide energy efficiency and take up less space than traditional storage tank water heaters. Tankless water heaters are also known as demand-type or on-demand water heaters.

They don’t store hot water but instead instantly heat it as needed. This eliminates the standby heat loss associated with storage tank models.

Storage-tank systems are generally more affordable to purchase, however, over time their energy costs can be higher due to greater standby heat loss. In addition, they typically have a lifespan of 10–15 years, compared to 20–30 years for tankless systems.

When selecting between a tankless and storage tank system, it is important to consider your home’s hot water usage demands and flow rate requirements.

If your home requires a large amount of hot water at any given moment or has multiple bathrooms, a tankless system may be best suited for you due to its ability to rapidly deliver an unlimited supply of hot water while maintaining energy efficiency.

On the other hand, if you only require small amounts of hot water at a time, such as in smaller homes with one bathroom, a storage-tank system could be more cost-effective in both the short and long term due to lower installation costs and lower replacement costs over time.


Tankless water heaters and storage tank water heaters are both popular options when it comes to heating water. However, there are some key differences between the two types of systems. Tankless water heaters provide an endless supply of hot water on demand, while storage tank water heaters store a large amount of hot water in a tank that is heated periodically.

Tankless systems have higher initial costs but they can be more energy efficient and cost less to operate over time. They also require less space and may last up to 10-15 years longer than storage tank models. Storage tanks, however, have lower upfront costs and may be a better option for households with high hot water demands.

Ultimately, it’s important to consider the size of your household, how much hot water you use, and your budget when deciding which type of system is best for you.